The speed of lending approvals is becoming a significant issue as mortgage brokers and our clients seek an increasingly faster turnaround of applications.
Homes have been selling so quickly that banks and other lenders are struggling to keep pace, often disappointing buyers who might have missed a property because they could not access finance sufficiently quickly.
Agents are reporting that an increasing number of sale contracts no longer include clauses that protect the buyer if finance approval is not forthcoming – a sign of a seller’s market.
The mortgage sector’s response has seen banks tune their technology to reduce the time it takes to issue a loan without compromising fiduciary responsibilities, believing this is the best way to win clients from their competitors. Some commentators have called this a “fintech arms race”.
Predictions of property market exuberance dissipating have become louder for the new year.
International money markets are putting pressure on rates, and APRA (Australian Prudential Regulation Authority) recently ordered lenders to apply a 3% buffer – up from 2.5% – to ensure clients can handle future interest rate increases.
It’s more sensible than ever to line up your finances before beginning your property search. Of course, pre-approvals must be followed by a bank valuation of the property you wish to buy before confirmation of the loan.
With so many moving parts to the mortgage scene right now, it will pay to seek professional advice from a broker to find the loan that meets your needs.
This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.