Why Home Loan Turnaround Times Are About to Blow Out Further
One of the biggest mortgage challenges that bubbled up during COVID-19 was the blowout in banks’ turn-around times. While most lenders were previously able to process and approve loans in several days to a couple of weeks, many of their processing times blew out to weeks and weeks – and for some banks, the turnaround time stretched on for months.
That bad news? These challenges are set to continue. With so many banks’ putting an end to pre-approvals, it’s putting extra pressure on other lenders, who can’t keep up with the demand.
As mortgage brokers, we do our best to help our clients navigate these choppy times, but it can be really volatile. We put a home loan deal forward to a bank recently and after submitting, this particular bank stopped taking applications, because they are at capacity in terms of being able to process loans.
Even though we submitted the deal before they announced this temporary cut off, they have refused to assess the deal. This is obviously really frustrating for the borrower, but it also makes us look really unprofessional in front of our client.
Add to this the fact that many banks have support staff based in India, in the grips of a harrowing COVID-19 outbreak, and it’s causing extra delays and dramas across the industry.
Frequently Asked Questions
Why are home loan turnaround times expected to increase further?
The home loan turnaround times are expected to increase further due to the ongoing impacts of the COVID-19 pandemic, increased loan applications, and the extensive verification processes lenders are implementing to ensure borrowers can service their loans.
How has the COVID-19 pandemic affected home loan processing times?
The COVID-19 pandemic has led to a surge in home loan applications due to low-interest rates, causing a backlog in processing. Additionally, lenders are exercising more caution, implementing extensive verification processes to assess borrowers' ability to service loans, contributing to longer turnaround times.
What are lenders focusing on during the home loan application process?
Lenders are focusing on extensive verification processes to assess borrowers' financial stability and ability to service loans. They are scrutinizing income, expenses, employment stability, and existing debts to ensure that borrowers can manage repayments even if circumstances change.
How can prospective homebuyers prepare for longer home loan turnaround times?
Prospective homebuyers can prepare by maintaining a stable employment history, having a clear understanding of their financial situation, reducing existing debts, and ensuring all required documentation is accurate and readily available to avoid any delays in the application process.
Are there any strategies to expedite the home loan application process?
Yes, having a clear understanding of your financial situation, maintaining a stable employment history, reducing existing debts, and ensuring all required documentation is accurate and readily available can help in expediting the home loan application process. Additionally, working with experienced mortgage brokers like Zippy Financial can provide guidance and support throughout the application process.
How does Zippy Financial assist clients in navigating through extended home loan turnaround times?
Zippy Financial assists clients by providing expert advice and guidance throughout the home loan application process. They help clients understand their financial situation, prepare necessary documentation, and liaise with lenders to ensure a smooth and efficient application process, mitigating the impacts of extended turnaround times.
We are dealing with an environment that is constantly changing, and if we, who are in the industry are finding it confusing and challenging, I can only imagine how borrowers feel! If you are concerned about your home loan, need advice or you are having trouble working out your next steps, we are on hand to help as much as possible. Contact our team of experienced brokers today on 1300 855 022 for a chat about how we can help you move forward.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.