It’s not enough to be able to easily repay a loan. It’s not enough to pay on time. It’s not enough to have a high net worth. And, it’s not enough to have a position of respect within the community. For a smooth approval process, it’s all about your transparency and ability to document any and all aspects of your finances. That’s the only way to satisfy the lenders’ need to create a ‘Perfect Loan File’, according to Mark Greene in a recent article in Forbes. The meltdown in the real estate market in the U.S. was/is, of course, much worse than here, but the attitude of the banks is the same. If they can’t tick every box on their credit matrix on the first pass, the approval of our application will be slow at best.
So, the way forward is to accept the often redundant documentation requests, remembering that when we were kids, one of our parents’ favourite replies to “Why?” was “Because I said so.”
So, what’s the perfect loan? Well, it’s one that (a) pays back the lender and (b) pays back the lender on time. But, underwriting the perfect loan is not the goal that lenders aspire to today.
The real goal is the Perfect Loan File.