5 Tips to Increase First-Touch Approvals

Compliance blog 03

Often mortgage brokers can get lost in the metrics of leads and settlements, but what happens in between these two metrics is more important than ever.

With lending policies becoming more complex, now is the perfect time to review and improve your loan application efficiency. In this article Erminia D'Oca, Senior Compliance Manager, shares tips to increase the likelihood of a first-touch loan approval.

1. Credit Enquiries and Undisclosed Liability Checks

We’ve found many applications are returned by assessors wanting to clarify the outcome of credit enquiries.
With access to upfront credit bureaus such as Illion, this is an easy tip to start implementing in your loan process if you haven’t already done so. Providing commentary on the outcome of credit enquiries (especially those within the last 12 months) will go a long way to preventing your client’s application from being delayed.

Find out how to offer your client credit checks.

2. Lender Appetite Beyond Policy

Before submitting your client’s application there are a couple of things you can do.

  1. Research and have a real-time understanding of credit appetites across your lender panel that goes beyond policy documents.
  2. Lenders are dynamic in their approach to applying policy so knowing how to research and having your finger on the pulse is crucial.
  3. Checking in with your BDM pre-submission to see if they are ‘open for business’ or asking for their gut feel on a scenario is an effective strategy that saves you and your client’s time and avoids costly delays and rework.
  4. If there are policy exceptions required, it is advisable to get the support of the lender BDM, ideally in writing.

3. Review Documentation, Including Bank Statements

Requesting documentation is only part of the process; reviewing them is equally important. Follow these tips:

  • Pay close attention to bank statements and look for inconsistencies between the client's living expense estimates and the actual figures.
  • Be vigilant in identifying potential undisclosed liabilities.
  • Train your administrative staff to review statements and flag any discrepancies or red flags for further discussion with clients.
  • If any buy now pay later debts are evident, inquire whether they are ongoing. If your client confirms that these debts are paid, or there are no limits applicable ask for evidence of closure or a statement before you submit the application.
  • Maintain records of conversations, assessments and evidence in Mercury Nexus.

4. Detailed Submission Notes

Detailed submission notes play a crucial role in ensuring assessors have a comprehensive understanding of the application.

In addition to comments made in the Apply Online submission, prepare a detailed loan submission cover sheet. This cover sheet should provide a comprehensive overview of the application and explain how you mitigated any discrepancies.

5. Review Processes and Use a Checklist

Regularly review your processes to align with current lending and regulatory requirements.

Use the tasks function in Mercury Nexus as that covers both your licensee and lender requirements. Using these as checklist ensures that all necessary items are completed before lodging the file, reducing the need for rework.

By implementing these tips, you can significantly improve the efficiency of your loan submission process and increase the likelihood of first-touch approvals. It's crucial to consider the potential risks involved, such as missed deadlines, reputational damage, and increased costs for rework.

Take proactive measures to avoid these risks and deliver high-quality submissions. Stay up to date with lender requirements, maintain open communication with your BDM, and ensure accuracy and transparency in your submission documents. By doing so, you'll enhance your reputation and maintain a competitive edge.

Erminia D'Oca, Senior Compliance Manager

Want to hear more from our lender partners on one-touch approvals? We recently hosted a webinar, watch it here.