When I meet with a new client and get a new loan application underway, I’m often asked the same question: Why does applying for a loan require so much paperwork?
I understand the frustration – people are really time-poor. But the fact is, going directly to your bank for a loan won’t make the process any easier, as they require the exact same documentation your mortgage broker requires. That’s why we ask for these documents – they are the same documents the banks require us to provide!
As your broker, all of this information also serves a second purpose: they help me to gain a clearer idea of your situation, so I can ensure you can really afford the repayments on the loan we arrange for you.
As finance professionals, responsible lending is one of the cornerstones of our business. We don’t want our clients to be placed into financial hardship because of a loan we have organised for them, and if we don’t have all the information upfront, it’s difficult for us to recommend the right product for you to suit your circumstances. It can then be costly for us to undo all this work and find you a new loan.
It’s also important that you disclose any relevant information to us upfront, so we can go ahead with this in mind. If the bank happens to find out something about your financial situation that we weren’t aware of, this can not only prevent your loan being approved, but it can also have a detrimental impact on your ability to get finance in the future.
This could have serious implications for you down the track, so it’s really important that you are completely honest with us. Sometimes, there may even be an issue in your finances or your situation that you’re not aware of, but that we can use our expertise to navigate. For example, if you’re self-employed or you have a high amount of tax deductions, this could impact your borrowing power, but as experienced brokers, we can find lenders who are most suited to your specific situation. Therefore, our goal is to ensure there are no surprises – for you or for us!
That said, I do understand that timing can be key. Clients are often concerned about having their loan approved as quickly as possible, so they can snap up the property they’ve been dreaming of. This is another reason why providing us with your paperwork and information upfront is key: if we don’t have all the required information ready to go, this can delay the approval process.
We understand that it can seem really overwhelming and time consuming to locate and gather all these documents, so here are a couple of strategies that we’ve learnt can help:
Divide and conquer – If you’re borrowing as a couple or in joint names, delegate tasks to each person. While one liaises with the accountant to track down tax returns, the other can locate bank statements and payslips.
Block out time – Set aside a block of time with no distractions, where your primary goal is to locate all of the paperwork you need. It shouldn’t take more than an hour or two, and will be much easier than chipping away at the list over a week or two.
By taking the time to collect all the relevant documents and provide your broker with this information, we can expedite your loan approval, and make sure we’re not recommending a product that doesn’t suit your circumstances. If that happens, and we then need to untangle you from a big financial mess, it can be difficult and costly to do so, and neither broker nor client wants that to happen!
Ultimately, by getting all of your information upfront, from your tax returns to your bank statements, we are armed with all the information we need to work towards creating a strong financial foundation for you. When you arrange your finance through Classic Finance, you’re dealing with a broker who truly wants to make sure they are setting you up with the best possible product for your future. That’s why we have so many repeat clients, who keep coming back to us over the years as their circumstances change.