Fully Assessed Pre-Approvals
Fully Assessed Pre-Approvals are looked at by an assessor and are reliable, hence, we have a strong preference for obtaining these over system-based approvals. Unfortunately our industry is moving away from them (they say due to low conversion rates).
System based approvals are fast and purely a result of lender-based algorithms. They have not been looked at to clear any ‘grey areas’ your deal may have. Often this means issues can arise when you lodge your addendum which can impact getting unconditional approval. It is much better to go through any ‘credit grey areas’ before your clients put purchase offers in.
Lenders fall into one of four categories in how they approach pre-approvals
- GONE – They have stopped offering them
- SLOW – They offer them, but they are put at the bottom of the pile, meaning you could be waiting 2-4 weeks for your decision, and, in the case of CBA, if you have missed anything in your lodgement – BANG, it’s declined!
- OK – a small number of lenders (generally smaller ones) are still doing fully assessed pre-apps with fast turnarounds.
- CONFLICTED – some lenders are even offering slow pre-approvals through brokers and fast ones via their direct channels
Here are 6 tips…
- Recommend Fully Assessed Pre-Approvals – we urge you to recommend fully assessed pre-approvals to your clients. It can be a core part of WHY you choose a lender and you can note that in your SOCA.
- Choose your lender wisely – know which lenders do fully-assessed pre-approvals
- Check SLA’s – the turnaround times for fully assessed pre-approvals can change dramatically from week to week, so check before you recommend, as non-communication of long turnaround times can KILL your client relationships
- Confirm with BDM – if you are in doubt, check with your BDM as to whether they are fully assessing applications and SLA’s
- Exceptions – if the lender you REALLY want to recommend is not offering FAPs then see if your BDM has any tricks or hints to make it happen. There is a strong chance they will do their best to help you.
- Reward the lender – if you have received a Fully Assessed Pre-approval for your client, reward the lender by taking the client back there for the unconditional.