Do you know what lenders are looking for in a prospective client’s application? Photo: phototechno.
When Arman Yazarloo first met the person who would soon become a new client, they had simply come seeking clarity on a puzzle.
“They wanted a loan for an investment property, and had always intended to go to their own bank,” he says. “Having already secured one home loan from that bank, they were a known entity and the math all added up … but there was a hitch.”
The bank’s customer service team reviewed the sums and everything looked great for a fuss-free loan but, come crunch time, the lender’s assessment officer couldn’t approve the application for the requested loan amount, or confirm what loan amount they could make available.
Mystified, the client followed a Google review to Arman at Clarity Home Loans, who revealed it was a snafu on the bank’s end.
“There’s a lot of very specialised knowledge surrounding home loans,” Arman says. ”It’s possible that day, when my client’s loan was rejected, they had simply spoken to someone who didn’t have the right knowledge or experience.”
Two months later, the client settled on a property with a loan from their bank, organised through Clarity Home Loans. The loan, granted by the same bank, was for an even higher amount than originally proposed, allowing the client to keep more of their savings in an offset for a rainy day. The broker’s services hadn’t cost them a dime.
Stories like this are not uncommon, but they do highlight the benefits of seeking a second opinion and using a broker.
Arman says he has seen loan applications mistakenly rejected for several reasons.
“Oftentimes, people go to their own banks out of loyalty but are faced with personnel who may not have a handle on the lending landscape the way a broker does,” he says.
“Whether it’s borrowing capacity, deposit amounts or not understanding they can use equity, there are lots of reasons for banks to say no. That’s when people come to us. Getting to the root of our client’s specific goals, and presenting them with the most suitable choices is what we do.”
In Arman’s client’s case, once the misplaced barrier was broken down, their existing bank turned out to be the best option. But Arman says this is far from a given.
That’s because banks can only work within the parameters of their own policies. Invariably, they’ll have existing clients whose product, borrowing capacity and speed of transaction needs are outside of what the bank offers.
“That limits their flexibility, but there’s nothing they can do, so clients are having their applications rejected or bending their goals to fit the bank,” Arman says.
“A broker can listen to the client’s needs, understand where they fit in the panel of lenders we have and offer them a few options so they can make an informed decision.”
Arman Yazarloo says it’s worthwhile getting a second opinion from a broker if your home loan application is rejected. Photo: Clarity Home Loans.
Whether it’s for a new loan or refinancing, this often unlocks better conditions.
“For some clients, saving tens, even hundreds of thousands over the life of the loan is the priority. For others, their strategy requires more borrowing capacity. Others still might prioritise speed of transaction,” Arman says.
“Intimate knowledge of the lending landscape helps us pick up on lesser-known considerations that can make all the difference to a client.”
Arman uses the example of living expenses, for which every bank has requirements – and they can have a major impact on a person’s borrowing capacity.
Clarity can capture all their clients’ pertinent data in one sitting and run it against numerous lenders to understand how their living expenses impact their borrowing capacities with different banks.
“Private health insurance is one good example. Purchasing a property with a body corporate is another. Rates, utilities and more … Some banks actually commit these expenses outside your normal living expenses, others include it,” Arman says.
“Just one of these factors can impact your borrowing capacity by tens of thousands of dollars.”
Aside from identifying the right lender, brokers also know what lenders are looking for in a client’s application, and can ensure everything relevant is included in an application and presented in the correct format for their lender’s systems, resulting in a smooth transaction.
This can be particularly useful for time-sensitive transactions.
“Because of the sheer volumes of loans we put through on a monthly basis, and the reputation we’ve built with banks, we’re in a position to negotiate interest rates and turnaround times, and escalate issues to place our clients right on top,” Arman says.
Putting his “civilian hat” on, he adds that apart from the many benefits of tapping into the knowledge of a person immersed day-to-day in the lending landscape, there’s one major thing borrowers should know.
“A lot of people don’t understand that 99 per cent of brokers don’t charge clients. Appointments are obligation-free, so it doesn’t cost them anything to sit and talk about their circumstances, and it could end up saving them big,” he says. “I’d call that a no-brainer.”
For more information, visit Clarity Home Loans.
