Weekly Wrap - Friday 7th August
National MFAA Excellence Award: Lauren’s Double Awards Win!
First and foremost, we want to celebrate with everyone that Lauren picked up two industry-wide national awards last night: the Newcomer Award, and the Young Professional Award. We've never had those sorts of results in our business. We're incredibly proud as a team of what Lauren has achieved, as I am personally as a business owner.
Bank time frames
Some banks at the moment might be at 21 business days to pick up your application, while others almost have a guarantee to pick it up within four hours. How does that happen?
There's a number of variables around policy changes in particular. For example, one of the majors and a couple of banks have pulled out of self-employed clients, who must have a 20% deposit. Now when that's the case, and you've got other banks that are happy to go to 95%, you've got to think where is that volume going?
Some other banks currently aren't accepting pre-approvals above 90%, meaning you need a 10% deposit. So if you've got a 5% deposit, you're at 95% lending, there are banks that won't do these pre-approvals. And again, there are other banks that will go to 95%. So we're going to talk about where that flow is being pushed to.
To be fair to them, it's not that some banks have just dropped the ball, they're literally receiving record volumes of applications at the moment. It's our role to understand that and know, if you come to us having signed a contract with a 14-days finance, that there's a group of banks that may well be off the table. The best rate isn't always the best option.
And we'll always be working in your best interest.
Another reason for delays is that a lot of the banks use offshore teams to support them and have done so for a long time. But for example, Manila has gone back into lockdown for now, affecting the teams and their ability to be able to move those applications through.
Many banks are bringing a lot of these services back onshore, but combined with policy changes, cash backs or really attractive interest rates, they are seeing a higher volume of applications than they normally would.
If you're applying to a bank, you may qualify for five banks, but there might only be two that can achieve what you need to do in the time frame you need to do it. And these are all really important factors.
The benefit of working with a broker is that you have a chance to understand these ever-changing factors. Ideally, you should talk to your broker prior to signing a contract, so you know that you can meet the timeframe that's attached to it.
This is a relevant topic at the moment due to Covid-19. Traditionally, we would be looking at the last two financial years. There now are extra layers of verification to comply with responsible lending. The banks are going to want to see 2020 figures; they are going to want to understand your financials.
As your broker, we work out your profile. What's important? What do your financials look like? Have you taken the cash boost? Do you have 2020 drafts?
As a self-employed person, if you're looking to borrow money in the next 12 to 24 months, those financials are really crucial. Our advice is to always get your drafts prepared and make sure we get eyes on them first, so it gives us the ability to change or tweak it and work with your accountant and with you. It's all about achieving the best possible outcome. So the more prepared we are and the earlier we get to see that, the more we can help.
Lockdown in Victoria
All our Victorian friends and family are in our thoughts. We understand the position you are in, and our heart and prayers go out to you, to be able to get through these next six weeks. And we know it's going to be incredibly disruptive and tough both in business and at home. So a big shout out from myself and the team.
By all means, have Zooms, catch up while having a virtual beer or a wine. Whatever you like, but stay safe. We know as a country that we'll get through this period. So we're really looking forward to popping out at the end of this and being able to share a beer, a hug, a handshake and high fives. But until then, stay safe, everyone, and we'll see you next week.