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Tips for dealing with lenders over Christmas

Adrian Sheahan
December 12, 2017

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By Adrian Sheahan

December is peak hour for banks and lenders and despite their best efforts every year, property buyers and sellers alike often miss their Christmas deadline and with solicitors taking time off over Christmas and New Year, that can delay the property settlement by weeks.  Banks and lenders put on extra staff to cope with the December rush but inevitably, settlement processes slow down because of the Christmas bottleneck.  

So what can you do to make sure that your application or property sale goes through smoothly?  The simple answer is, be prepared and make it easy for the lender who is dealing with your transaction.  That applies all year around though, not just Christmas, so here’s a few tips to help you get a good outcome from your lender.

Applying for new finance

Primarily lenders are concerned with your ability to repay the loan you are seeking and what security you can provide for the loan.  To meet their documentation requirements, have the following items ready:

Income and expenses

If you are employed on a PAYG basis, have your last two payslips and employers payment summaries. 

If you are self employed, have your last two years personal and business tax returns available.  If you don’t have them handy, get your accountant to email you a copy

Rent income.  Supply a copy of the rent statement from the property manager, the lease or the two most recent rent receipts.

On the expense side, lenders will quiz you on living expenses and existing loans so have a budget prepared and bring along the most recent statements for all of your loans and credit cards.

Loan security  

If you are purchasing a property, provide the contract of sale and a copy of the receipt for your deposit.  

If you are using an existing property as security, supply a copy of the most recent rates notice for that property.

Objectives  

Finally, have an idea of what you are trying to achieve and how you want the bank to assist.  A good lender will try and find a pathway to the outcomes you are seeking and if you have made it easy by supplying the information they need, the process can be quite smooth.

Selling your property

When you have sold a property a lender holds as security, they need to prepare a discharge of mortgage, organise settlement etc. 

They often employ solicitors to act for them and the whole process can take up to 4 weeks so if you don’t tell them immediately upon sale of your property, you run the risk that your tardiness may delay settlement.  You can ask for the matter to be attended to quickly, but at times like Christmas when they are flooded with requests, that is sometimes just not possible.

To minimise this risk, as soon as your property sells, provide the lender with a copy of the contract of sale, your solicitor’s details and sign the lenders discharge authority. 

Make sure you take care to provide full and accurate details.  If you have a personal manager or contact person with your lender, ask them to lodge it for you and keep an eye on its progress.  There is also no harm in your solicitor checking with the bank once the request is lodged to make sure all is in place.

Loan refinance

For the new lender, these matters are a priority but for the lender you are swapping from, property sales and purchases are more important so don’t expect them to fall over themselves to complete the refinance.   My main tip if you are considering a refinance is to speak with your existing lender first and see if they can satisfy your concerns. 

They may be able to provide what you are seeking, eliminating the need for the refinance in the first place.  If they can’t, you will have at least removed the step where they should try to retain your business.   Once you have decided to go down the refinance path, complete a discharge authority for your existing lender and lodge it with them as soon as possible. 

You can ask the new lender to do that for you but preferably, once you have made the decision and have the approval for the new loan, lodge the request so the old lender can attend to their process whilst you are completing the mortgage documentation for the new loan.  That can save you weeks.

No matter what you are doing, my number one tip for saving time in any dealing with lenders is to call them and establish what they require to action your request. 

Make a list of what they need and then satisfy that list to the letter. I recently had the pleasure of listening to a successful developer speak and his advice when dealing with governments, councils and banks was not to fight them, get what they want and work with them. 

The time savings are enormous.  If they request a letter from your accountant, get it for them, if they ask for two current pay slips, don’t provide one from two years ago. 

The easier it is for them, the sooner your settlement will happen. 

Published: Wednesday, December 13, 2017


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