Brokers experiencing longer turnaround times need to give their customers realistic expectations.
Many brokers and borrowers are finding that home loan applications are taking longer than usual and this is being put down to the increased uncertainty lenders are facing.
While brokers may be used to lenders taking a certain amount of time to approve loans, it could be they need to prepare for varying times.
Group sales manager at Liberty, John Mohnacheff, said brokers need to double check processing times before putting in an application.
He added, “With the banks being so closely scrutinised, their loan processes are under review causing deal turnaround times to be considerably longer than usual. Of course with greater scrutiny it takes more people and more time.”
Mohnacheff said that brokers need to make sure the expected turnaround times are made clear to their customers and if they want something sooner, it is up to the broker to find a lender with better times.
He said, “One thing that’s important is for the brokers to be aware that if the turnaround times are a little bit slower, they have to set the right expectations with the borrower. They have a choice of other lenders that may not be affected in the same ways as the major banks.
“Everybody is reviewing their files, but it’s a matter of scale. If you’re getting one thousand files a day and you’ve got to spend an extra fifteen minutes on each one the turnaround times really back up by days and weeks. But if you’re getting a hundred files a day, times fifteen minutes, turnaround times won’t be as impacted.”
Even without the Royal Commission, Mohnacheff said there are other factors that brokers should watch out for when it comes to turnaround times.
He said, “One of my pet peeves is rework. If you send in everything that’s required, when it hits our tables and we see a file that is complete, we jump on it. But if we have to stop because something’s missing, a clarifying email has to be sent and it could be a few more days of backwards and forwards before the deal is done.
“Complete the application form carefully and dutifully and ask the borrower all the questions, don’t second guess. Make sure when you’re sending the application through you have got all the documentation that is required on that lender’s checklist to streamline the process.”
Mohnacheff said Liberty wants to be able to say ‘yes’ to customers within 48 hours. He added, “Not everyone ticks the one box. Every situation is unique, so what we do when we assess a file is we look at the whole financial situation for the borrower so that if there is a solution, we are sure to find it.”
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