Submitting the intimate details of your personal and financial life to scrutiny when applying for any type of mortgage leaves many borrowers feeling understandably vulnerable.
And it seems to be the nature of the beast that, while some loan applications progress nicely through the internal mechanisms of the banks without a hitch, others start to unravel in the early days and then problem after problem follows.
This is not surprising given the amount of stages and analytical eyes an application is subjected to before settlement, with numerous professionals involved including brokers, bank officers, credit analysis teams, valuers, solicitors, real estate agents, accountants and/or financial advisors.
Rest assured though, there are ways and means to make this journey as painless as possible and with a bit of foresight and understanding as to how your loan request is processed, you can take pre-emptive action to alleviate any issues before they become potentially costly delays.
Of course I am going to suggest at the very outset that you consult a properly qualified professional broker, who has a client services team at hand to assist the smooth transition of properly completed paperwork between all parties, thereby maximising your control.
But in the meantime, these little insights will be enough to get you started whether you decide to apply directly through a bank or via a broker.
Leave no stone unturned
While the lender’s analysts will consult your credit history to get a clearer picture as to your capacity to service the loan and your character when it comes to managing debts, the majority of information they use to determine if you are a worthy candidate is contained right there in your application.
Hence, it is in your best interests to give them as much relevant information as possible. Do not try to hide any potential red flags, because these analysts are experts at uncovering them.
Instead, answer each query with clarity and if necessary, provide additional explanations about any discrepancies.
We often counsel our property investor clients, who might undertake the loan application process annually or bi-annually, to put all of their relevant documents together in a personal “finance pack”.
This ensures they have important paperwork at hand, including financial and bank statements, payslips, tax returns and so forth.
Be ready to review
Loan documents can often be sent back and forth between various parties for clarification around any issues that the lenders decide to query.
Here at Intuitive, we assist in this process with our dedicated client services team ensuring the ferrying of paperwork and any necessary revisions happen in a timely manner, so as to avoid potentially lengthy delays at settlement.
Be there for the lender
Not as a shoulder to cry on or a friend to confide in of course, but as a willing participant in the application assessment process. We are not suggesting you sit by the phone and wait for them to contact you, just in case.
But it’s advisable to be accessible. In other words, never plan an overseas holiday just prior to the scheduled settlement of your new property!
Stay in the know
Never be concerned about asking a foolish question. Usually, the only silly questions are the ones you fail to ask.
Seeking information on how and why your loan is being processed through various channels and where it is situated at any given time, is a good way to maintain control and reduce the anxiety of waiting.
Don’t be a valuation victim
One of the most stressful components of any loan application process over a property purchase is the valuation. It is the great unknown that can make or break your borrowing success.
You have the right (and you should most definitely exercise it) to order your own valuation on the property and submit it to the banks for consideration with your application.
They of course, will have their valuer assess the property too. But if their price comes in lower, you already have ammunition at the ready to legitimately request a review.
Just be sure to engage the services of a reputable valuer, and preferably one who sits on a number of lenders’ approved panels.
Given that the bank’s willingness to comply with your request for a loan can make all the difference to your ability to buy a property, be it your own home or investment, it’s important that you take the application process seriously and involve yourself, whether you choose to engage the services of a broker or not. Remember, this step is just as important as choosing the perfect property!