Advisers say the current processing time for pre-approvals is between five and 10 days.
So, Kiwibank’s move got at least one adviser excited, Kerikeri-based Sarah Curtis writing on LinkedIn that this is “a new option that is going to change the game.”
Financial Advice New Zealand chief executive Nick Hakes says the feedback he’s had from his members is that they view this as a positive step, although he notes that all the lenders have been reducing their turnaround times since late last year.
“They’ve had the opportunity to catch up over the Summer break,” Hakes says, but adds “clearly more can be done to deliver good consumer outcomes.”
Hakes suggests the lender should be looking at the barriers that have been pushing out turnaround times.
The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) country manager Leigh Hodgetts says all lenders had stopped providing pre-approvals completely ahead of Christmas because the turnaround times were so slow, though she regards them as “nice to have rather than an essential offer.”
“First-home buyers will definitely benefit from a pre-approval as the market heats up and auctions become the preferred way to sell homes,” Hodgetts says.
She thinks pre-approvals should take no more than five days and notes that they’re particularly useful for brokers dealing with first-home buyers because it gives them confidence about the price they can afford to pay.
Of the four major banks, only Westpac was specific about its turnaround times for advisers seeking pre-approvals, claiming its current times are three to four days.
It says it will provide pre-approvals for all customers with loan-to-valuation ratios of less than 80% of a property’s value.
“We’re working hard to support both first-home buyers and existing homeowners with highly competitive rates and expert advice and guidance,” a Westpac spokesman says.
BNZ says its turnaround time is 24 hours, “once we have received all required information and completed our responsible lending checks” for loans originated by its inhouse “home loan partners,” but didn’t say what its turnaround times with external advisers are.
ANZ NZ says only that “turnaround times for mortgage applications can vary depending on the type of application, complexity, and overall volume.”
ASB had a similar response but it added that it is continuing to invest “in additional roles to help support the increased demand we’re seeing for our home loans and our turnaround time has improved this year.”
Bruce Patten at Loan Market, one of the first adviser to gain access to Kiwibank about 10 years ago, says he doesn’t have an issue with turnaround times generally and attributes that to “time in the business and the relationships we have with the banks.”
“I have seen the fast pre-approval, but it does come with some limitations so it won't be for everyone, and the problem is they will get inundated with applications and they are likely to blow out on their 48 hour SLA (service level agreement,” Patten says.
A Kiwibank spokesman says his bank is planning to honour its pledge
“We continue to invest in our adviser channel by onboarding new team members, enhancing systems and processes, and developing new solutions to improve the experience for advisers and customers,” he says.
The fast pre-approvals pledge was the result of feedback from advisers, he says.
Kiwibank is also “creating a digital solution that allows advisers to submit loan applications directly from their customer relationship management (CRM) system to Kiwibank's decision engine,” he says.
“These ongoing changes aim to make the loan process easier and quicker so customers can focus on finding their dream home.”
