The mortgage market is pretty challenging at the moment. So much is changing on a weekly basis \u2013 interest rate discounts, credit policy and service platforms and processes. I estimate it probably takes us twice as much work to establish a loan than it did 12 to 18 months ago.<\/p>\n
Take 2 minutes to read the short update below. This update will be particularly useful if you expect to change existing or apply for new loans in the next year or so.<\/p>\n
Interest rate discounts and price competition <\/em><\/strong><\/p>\n Interest rate discounts are changing regularly as the banks fight for market share \u2013 particularly for owner-occupier loans. The banks have been warned to reduce the amount of investment lending and avoid interest only repayments on home loans. As such, they discount less aggressively for these type of loans. As a result, some lenders now offer four different interest rates depending on whether a loan is a home or investment loan and whether the repayments are P&I or interest only.<\/p>\n It\u2019s difficult for some borrowers to understand why a loan\u2019s interest rate discount is different simply because the repayments are structured differently \u2013 but that\u2019s the way it is at the moment. It seems a bit unfair on the face of it \u2013 and I would argue that whoever\u2019s decided to take this approach didn\u2019t consider the client experience. In the scheme of things, it\u2019s not that big a deal as I\u2019d expect that interest rate discounts will vary over time. We\u2019ll review your discounts every 12 months and make sure they are competitive.<\/p>\n Credit policy and borrowing capacity <\/em><\/strong><\/p>\n Lenders have made some major changes over the last 12 months to the way they calculate a borrower’s capacity. This has reduced most people\u2019s maximum borrowing capacity quite significantly \u2013 some clients’ borrowing capacities have halved. In addition, lenders have changed maximum loan to value ratios \u2013 particularly for investors and for particular locations where there have been (or will be) a lot of new apartment stock on the market. The checks that lenders are undertaking now, and the amount of questions they are asking, has also increased significantly. There\u2019s no solution to this other than being prepared.<\/p>\n In short, applying for a new mortgage can be a more arduous and time consuming process compared to 12 to 18 months ago. It is important to match a client with the lender that will suit them best \u2013 even more so in a dynamic credit environment like this one. Virtually all of the applications we work on are still approved \u2013 it\u2019s just the process takes more time and effort on our behalf. But that\u2019s what we are here for.<\/p>\n Service levels, delays and errors<\/em><\/strong><\/p>\n The banking industry has never been renowned for delivering great customer service. The consistency<\/em> of service is one of the things they really struggle with and this is what makes it difficult (frustrating) dealing with them. Also, empowering bank staff to resolve issues and\/or make client-centric decisions on the spot is something that\u2019s becoming a lot less common too.<\/p>\n For some reason the level of service provided by the banks in probably the last 6 months has deteriorated significantly in my opinion. I\u2019m uncertain as to what has caused this but perhaps they are struggling with the all the changes that have been occurring. I estimate that my team spends 30% or more of their day just trying to fix bank errors for clients. Wrong fees, incorrect loans repaid, not issuing credit cards correctly, making false representations with respect to previously approved discounts, wrong interest rates, stalling tactics and delays, broken promises, offsets not attached correctly and the list goes on.<\/p>\n I can\u2019t recall a time in the past 14 years where the service provided by the banks has been worse than it is today. Everything moves in cycles so I\u2019m sure it will eventually improve. But for now, be warned\u2026 maintain low service expectations and rest assured that when a problem does arise, that we\u2019ll jump straight onto it and resolve it for you. We\u2019ll always fight hard on your behalf.<\/p>\n Outsource this pain and be prepared <\/em><\/strong><\/p>\n So much can potentially go wrong when it comes to selecting a bank in today\u2019s market. How do you know if you have the best interest rate discount, have you chosen a lender that\u2019s going to understand your requirements and approve what you want and then what happens if (when) errors occur? The last thing you want to do is spend hours on the phone explaining your problem to four different people!<\/p>\n I believe that now more than ever (in this environment) we offer a significantly more valuable service to our clients. Not only do we save a lot of time and frustration but we get the opportunity to apply our skill, knowledge and experience to ensure that our clients\u2019 needs are met. It\u2019s not always a perfectly smooth experience but we get there in the end. We always put our clients best interest first and diligently and tenaciously work away until the client\u2019s needs are fulfilled. We work for you, not the banks.<\/p>\n My advice is if you are contemplating refinancing or establishing a new loan in the next 12 months, lets discuss your plans sooner rather than later to give us plenty of time to organise everything and give us the best chance of avoiding any \u201cissues\u201d.<\/p>\n <\/p>\n ","protected":false},"excerpt":{"rendered":" The mortgage market is pretty challenging at the moment. So much is changing on a weekly basis \u2013 interest rate discounts, credit policy and service platforms and processes. I estimate…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"__cvm_playback_settings":[],"__cvm_video_id":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[142],"tags":[],"yoast_head":"\n