How do you get a finance application approved by the bank really quick?

I thought I would share some insights and learnings from the many finance applications I have made to banks, and in particular, what practical things can be done to speed things up? Bank processes would often frustrate me as slow and cumbersome. But then, I learnt few tricks that have made my life easier:

1. Turn around all requests in 24 hours.

Once you kick off a finance application, questions will invariably come back from the bank or broker: We need this or that document; This figure is not verified; Please provide further evidence, etc, etc. Not easy, but I now aim to turn these around in 24 hours. If you respond slowly, it just compounds the time it takes to get approval.

2. Don’t send back material in dribs and drabs.

If your bank or broker asked for x , y and z document, don’t provide x and y, and tell the bank, ‘Hey, z will come later’. This will just slow the application. If you are asked for things, don’t go back until you can provide 100% of it.

3. Use a good broker.

Made all the difference for me. Probably deserves a post in its own right.

4. Use good PDF software to organise documents.

I find providing paper copies of documents too slow and cumbersome. I PDF everything, and send things through electronically. Good PDF software makes it easier to combine multiple PDFs into the one complete document. Eg. If a bank statement is more than 30 days old, you can PDF the statement, and then put the online transaction listing immediately after it in the PDF bundle. Makes assessor’s job easier when it is all in the one place, in logical order.

5. Comply with the bank’s request precisely.

If the bank asks for a loan statement no more than 30 days old, don’t provide one 31 days old and say, ‘Oh come on, surely that should be ok’. Assessors seem to have little discretion, so don’t risk slowing the application but not being 100% compliant.

6. Tell the bank where to find figures in documents.

Don’t run the risk of the assessor not being able to find a figure that needs to be verified. If the relevant figure happens to be in a 50 page PDF document (say the loan contract), provide the page number whether the figure can be found (probably in the covering email). Make the bank staff’s job as easy as possible.

7. If the bank cannot find a figure in any document, derive it for them.

Let’s say the bank asks you for the remaining term on each of your outstanding loans, what do you do? This figure probably cannot be found on any document, and can only be calculated from the (i) settlement date and (ii) original loan term. So, put a simple spreadsheet together listing those 2 data points on each loan (column 1 and 2), and use a formulae (column 3) to derive remaining loan term. Don’t leave it to the bank staff to calculate figures, no matter how simple you think it is. And provide documents to support the each data input (also noting point 6 above).

8. Don’t get frustrated when the bank asks you questions about stuff you have already provided.

Very rarely will an application to go through without follow questions from the Bank. In responding, provide documents again if needed, rather than referring back to the previous bundle. Treat each request in a stand alone way.

9. Have your affairs in order, so follow-up requests don’t bog you down.

If you are borrowing in a company name for example, expect a request for tax returns, or a statement from accountant saying company is trading profitably. So have the company books up to date, tax returns completed, etc. so you are not left scrambling when these questions hit. Think ahead.

That’s my list. Interested in hearing from others.

 

Effectively do reverse due diligence on yourself. Gift wrap the pac,age of documents for the bank and think about what will make their life easier.

I do a summary spreadsheet of key facts and figures with cross references. Same for my tax accountant.

 

Good list - best one is to go to a lender that has quick turnarounds.

Turnarounds for lenders change week to week as different lenders have different promos. One week it may be 24 hours. The next it may be 10 days! This largely is the difference between quicker approvals and slower approvals.

On case by case individuals, theres often going to the right lender that makes things quicker (e.g. avoiding an insurer, etc).

 

10. Disclose everything. Nothing worse than a lender asking questions about credit that a client decided to keep quiet and hope no one asks.
11. Don't resign from your job in the time between meeting the broker and engaging them to commence an application.
12. Consider non- standard lenders. Some have great turnaround times or may be your only options.

 

Great points.

 

The industry definitely teaches you a lot of patience!

This happens ALL THE TIME.

Cheers

Jamie

 

Yes it does. Took me over 3 months to get my construction loan approved with CBA. I provided every document they asked for within a few hours but then there would be a 1-2 week period before they'd come back and ask for an additional document. This happened several times. Got there in the end but was a very, very painful process. With banks, always start the process as early as u possibly can. It will always take longer than u think!

 

It takes lots of deep breaths.

Construction loans are always fun

Cheers

Jamie

 

I'm about the apply for a construction loan.

Can you explain why construction loans take so long for approval?

 

They shouldn't generally, but the additional paperwork can be an issue, especially if the bank doesn't like the payment schedule or similar.

 

Slow because they often cant articulate what they want exactly upfront (until they check what you send) and each council works slightly differently. Stamped planed etc some councils just don't do anymore,.

 

13. Don't go on holiday to a remote area after having an offer accepted.

 

Mine was also a bit of a nightmare experience with CBA. They lost the original building contract I sent them so that didn't help. They also asked me to pay $2500 for valuations which I declined but it ended up wasting a lot of time going back and forth. They also said approval was conditional on me providing $500K of my own funds towards the construction which wasn't specified in the pre-approval and I didn't have $500K lying around. I ended up having the condition removed but again lots of back and forth...

 

Makes me feel better hearing there are plenty of others suffering as a result of CBA. So every time you submit a document there’s a different assessor assessing your application. Why can’t one assessor finish it from start to finish. Is this the same process for all banks?