You’re ready to buy a home or extend your loan and have started looking into a mortgage. Like most people, you might assume it’s a pretty straightforward process—find a lender, fill out an application, and get approved, right? Not quite.
The reality is that getting a mortgage in today’s heavily regulated lending environment is tough. Behind the scenes, we need one hell of a lot of information – stacks of paperwork, dozens of compliance rules, and intense scrutiny into every aspect of your finances. We analyse it to death.
Our success rate is good
When I talk to other brokers and people who work at banks, I see that not every mortgage broker does the work to the degree that we do with the level of analysis and effort. So, from the stats, we can see that our approval ratio is much higher than that of the others. For example, we know that 85% of the applications we send to Westpac Bank are approved with a similar approval ratio at the other banks. What happened to the other 15% I hear you ask? Well, we don’t win them all but what I can tell you is that the average approval ratio across the market, whether you go via a broker or you go to the bank yourself is a pretty dismal 60%.
The puzzle
When we’re piecing together your financial situation, we spend around 15 hours on the whole thing. Yep, 15 hours.
Even when it looks like something really simple, like a $40,000 loan top-up, it must go through the same rigorous process as a $1m mortgage, because the focus is on evaluating the overall risk, not just the loan amount.
The work involved goes far beyond just taking your application and sending it to the lenders. We have to paint a clear picture for them by gathering all the necessary paperwork. This includes pay slips, bank statements, contracts, and much more. These requirements must seem pedantic to you if not downright invasive at times, but we’re required to back the numbers up with evidence, so it’s like putting together a puzzle.
Once we’ve analysed it, we identify potential issues, discuss possible solutions with you, and get your written confirmation on proposed adjustments to improve your chances of approval. We do all that before the bank sees it because we are trying to position you for the outcome you want.
Our staff are geared this way too – Cam and Paula set your strategy but it’s actually Jo, Coralie and Kirsty who provide the computational horsepower.
Streamlining with technology
To help speed things up, we use technology that allows you to securely provide access to your online banking data for a one-time download of six months’ worth of bank statements from each bank account. This saves the hassle of manually collecting statements from every account.
The ‘aha’ moment
We’re not just a conduit for your paperwork. We pull it apart and then say to you, this is what you’re spending. Yep, this is what you’re doing, and if you were to continue to do that, your mortgage would be X, and that’s not enough for what you want to do. However, if we propose to the bank that you will trim some of your expenses this way, your mortgage will be Y.
Numbers don’t lie. We uncover financial leaks that people often overlook or avoid admitting to themselves. Seeing it all in black-and-white can be a wake-up call for getting spending under control.
Having your full financial situation laid out so transparently can be an eye-opening, if not confronting, experience. Many of my clients have an ‘aha’ moment of realising, ‘Wow, is that really what I’m doing with my money?’, and this creates the space for them to change and do better.
Our advantage
By doing detailed upfront analysis and documentation, we present a comprehensive, low-risk picture to lenders. Because we’ve put in all that work, the banks ask us fewer follow-up questions than they would otherwise. There are times when we go backwards and forwards when they need to clarify something. But basically, we’re usually over 80% there with all the information we have already collected from you.
Introducing our new team member
We’re excited to welcome Coralie, our new credit assessor, to our team. With her previous lending experience in banking, Coralie understands precisely what lenders need to see. One of the key benefits of having Coralie work at Hastie Mortgages is that she’s the equivalent of having someone from the bank’s lending assessment team working internally for us and for you. Welcome, Coralie! You can read about Coralie’s experience and skills in our next newsletter.
Looking ahead
The mortgage landscape is constantly evolving, with potential changes on the horizon that could impact the market, such as:
- Adjustments to the Credit Contracts and Consumer Finance Act (CCCFA).
- Relaxed LVR (loan-to-value ratio) rules to help more first-home buyers.
- The recent government change allowing interest deductibility again.
- A high level of new arrivals to New Zealand requiring housing.
While none of these factors alone will drastically shift the market, if they’re combined with decreasing interest rates, we could see a very active year for homeowners and buyers in 2025.
If you’re considering your mortgage options, click here to contact us today. Our team, including Coralie, will ensure your application presents the full picture to maximise your chances of approval.
