If you need a home loan, you need an originator
The banks have lowered their deposit requirements in most house price categories over the past few months, and they are approving a higher percentage of homeloan applications, but that does not mean that they have thrown caution to the wind.
Shaun Rademeyer, CEO of BetterBond Home Loans, says they are looking even more closely at the credit histories and financial capabilities of potential borrowers, with the result that more than half of all homeloan approvals are only achieved now after the application has been submitted two or three times, possibly to different financial institutions, compared to 49 per cent that required multiple submissions a year ago.
In other words, he says, while higher property sales volumes and increasing prices are giving the banks more confidence about lending into the real estate market, they are still dubious about the state of most consumers’ household finances.
“And on top of this, the loan criteria of the various banks are often quite different from one another, and can also change quite frequently, as can their deposit requirements and the interest rates they charge on homeloans, a scenario that makes it extremely difficult, if not impossible, for individual consumers to decide where they might get the best response to their homeloan application.”
In the past year, 19 per cent of the approvals achieved by BetterBond have been for applications that were initially declined by the borrower’s own bank, but were then submitted to other lenders and “rescued”. A year ago, this percentage was 16.5 per cent.
All of which underlines, says Rademeyer, the need for homeloan applicants to enlist the help of a reputable and successful mortgage originator that can provide a comparison of the various borrowing options on offer at any particular time, and will motivate their applications individually and submit them to several different banks if necessary.
