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Lending delays - why do they happen

16/11/2015

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Some home loan approvals can be processed in days, others take weeks. Why the delay?

Don’t be tempted to blame your mortgage broker because rarely they are the ones causing the hold-up. Usually it is either a delay by the lender or incomplete client paperwork that causes the blowout.

Some lenders fund loans faster than others, and an increase in the number of loans can slow down a lender's usual processing time. The time of year also has a part to play – expect delays the closer you get to Christmas, as well as around Easter and the end of the financial year.

You can help move along the mortgage approval process by pulling together the necessary documents before you apply for a loan. Missing documents and inconsistent information on the paperwork are common reasons for delays.

The more complex the loan, the longer it takes for lenders to review. This is why many clients value the help of a mortgage broker – to assist with the time-consuming task of getting loan documents ready for approval.

Another important benefit of dealing with a mortgage broker is that we often know which lenders are experiencing processing delays, which means that if you need fast home loan approval we can usually recommend a lender that is more likely to provide approval within the necessary time frame.

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RBA Rate Announcement  - Nov 2015 - No change - Cash rate 2.0%

4/11/2015

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Statement by Glenn Stevens, Governor: Monetary Policy DecisionAt its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.
The global economy is expanding at a moderate pace, with some further softening in conditions in the Asian region, continuing US growth and a recovery in Europe. Key commodity prices are much lower than a year ago, in part reflecting increased supply, including from Australia. Australia's terms of trade are falling.
The Federal Reserve is expected to start increasing its policy rate over the period ahead, but some other major central banks are continuing to ease monetary policy. Volatility in financial markets has abated somewhat for the moment. While credit costs for some emerging market countries remain higher than a year ago, global financial conditions overall remain very accommodative.
In Australia, the available information suggests that moderate expansion in the economy continues. While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions over the past year. This has been accompanied by somewhat stronger growth in employment and a steady rate of unemployment.
Inflation is low and should remain so, with the economy likely to have a degree of spare capacity for some time yet. Inflation is forecast to be consistent with the target over the next one to two years, but a little lower than earlier expected.
In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending. While the recent changes to some lending rates for housing will reduce this support slightly, overall conditions are still quite accommodative. Credit growth has increased a little over recent months, with growth in lending to investors in the housing market easing slightly while that for owner-occupiers appears to be picking up. Dwelling prices continue to rise in Melbourne and Sydney, though the pace of growth has moderated of late. Growth in dwelling prices has remained mostly subdued in other cities. Supervisory measures are helping to contain risks that may arise from the housing market.
In other asset markets, prices for commercial property have been supported by lower long-term interest rates, while equity prices have moved in parallel with developments in global markets. The Australian dollar is adjusting to the significant declines in key commodity prices.
At today's meeting the Board judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate at this meeting. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. The Board will continue to assess the outlook, and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.

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