National real estate network @realty is urging homebuyers to exercise caution when applying for finance, following tough new measures in the wake of the Banking Royal Commission.
@realty director, JJ Taylor, said the recent crackdown by mortgage lenders means borrowers need to be careful of potential pitfalls, which may result in their application being declined.
Mr Taylor says a lack of education and awareness can result in borrowers unwittingly downgrading their credit rating or filing an application that gets rejected.
“There are so many obstacles for borrowers in the lending market, many of which they’re not aware of until it’s too late,” he said.
“Often these pitfalls occur simply due to the complication of navigating between mortgage lenders, real estate agents and solicitors.”
Unique to the business, @realty acts as a ‘one-stop-shop’ for borrowers, providing a finance service through a partnership with an independent team of finance experts, who work with the applicant and financial institution to find the most suitable home loan – at no cost to the applicant.
@realty Finance Lending Channel Manager, Raj Ladher, says one of the biggest issues buyers face is accidentally tainting their credit score by applying with too many lenders.
“Your credit score is your passport to credit, and multiple enquiries on your report could significantly reduce your score,” said Mr Ladher.
“@realty Finance doesn’t mark an applicant’s credit file when they make an enquiry and we thoroughly run through a client’s circumstances and requirements before working with a number of banks in order to find the most suitable loan .”
Mr Ladher said borrowers also need to be mindful of ‘false’ pre-approvals from lenders.
“Some lenders do not fully assess the pre-approval and it is merely system generated, which would have a higher fall over rate.”
“Lenders are also constantly changing their policies, which means some pre-approvals may fall into old criteria and become null and void,” he said.
Mr Ladher said obtaining a pre-approval means that the bank has assessed the individual but not the value of a property.
“To navigate this potential issue, we would recommend getting a fully assessed pre-approval and organise a bank valuation on the property as soon as you finalise the purchase price.”
Mr Ladher said @realty Finance tackles any credit issues by dealing with experienced, senior bankers.
“We are a direct to bank solution. A client comes to us and speaks with an experienced lending specialist,” he said.
“Based on this, the specialist will provide at least three options – however we have up to 16 lenders on our panel for more complicated cases.
“We only deal with experienced bankers who have worked through the ranks, some who also have their own delegated lending authority which means they can approve the loan once they have carried out their due-dilligence – speeding up the process considerably.
“Prior to introducing a banker to a client, we do a thorough check with the banker to ensure the client is suitable. However, should something ‘come out of the wash’ that we weren’t aware of, we can quickly re-package the deal and re-lodge with another bank.”