Despite all the recent talk about the impact of tighter lending regulations on the property market, we’ve seen a few different indications recently that some of the Banks have been ‘thinking outside the square’ in order to remain competitive.
One sign of the competitive pressures can be seen in the way several leading Banks have introduced discounts on their introductory ‘honeymoon’ rates. In recent weeks Westpac, the Commonwealth and Suncorp have reduced introductory rates with the clear aim of attracting more business.
However, one move that really caught our eye came from one of the regional lenders. Heritage Bank, which is based in country Queensland but has branches across Australia, has unveiled a new service which should appeal to quite a few buyers…they are offering an expedited home loan approval system which can provide loan approvals within as little as 24 hours in some circumstances!
Known as the ‘Fast Track’ option, this new approval process requires borrowers to submit their application through an independent Mortgage Broker, and to provide all the correct documentation at the time of applying. Apparently, the bank has been testing the concept for several months and approved more than 10% of the total applications received from brokers within the 24-hour period, with the fastest approval taking only an hour and a half!
It is worth noting that in order for a borrower to use the Fast Track system, their application must be a fairly straight forward one. This includes being an Australian resident and citizen, having held the one job for more than a year, requiring a loan of less than 80% of the value of the property, and having a clean credit history.
Whilst rapid loan approvals may not be of interest to every borrower, the willingness of the Banks to try new ideas to attract new business certainly seems like a positive trend for most borrowers. We will watch with interest.
In the meantime, if you are thinking about housing finance as part of a plan to sell and move in the future, don’t forget to read through our FREE booklet, Fatal Real Estate Traps Exposed. You’ll find lots of tips on ways to avoid several expensive mistakes when selling.
