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Resimac offers home loan applicants an alternative to expenses scrutiny

Contributor:
Fuseworks Media
Fuseworks Media

Auckland - 18 January 2021 - Leading non-bank mortgage provider Resimac has responded to the industry-wide bottleneck in bank pre-approvals by offering a 'fast lane' for eligible broker customers.

For Prime applicants who come via the adviser/broker channel with a strong debt servicing ratio, Resimac can provide faster pre-approvals where they have satisfied all other eligibility criteria. This is enabled thanks to Resimac's innovative use of benchmarking to assess their expenses.

As a result of changes to the Credit Contracts and Consumer Finance Act (CCCFA) in early December, all lenders are now required to take reasonable steps to evaluate a loan applicant's expenses. While many lenders have implemented this by forensically inspecting an applicant's past expenses - adding significant time and hassle to the assessment process - Resimac is the one of the few lenders using benchmarking to assess an eligible applicant's debt servicing position, facilitating a quicker assessment.

Luke Jackson, General Manager New Zealand, said that for the most part, the CCCFA changes have resulted in lenders becoming overly cautious, scrutinising every applicant's spending habits in detail.

"There are unfortunate and unintended consequence of the changes to the CCCFA. Industry feedback we've seen thus far indicate that it's made it harder and more time-consuming for applicants to apply for a home loan. We've also heard stories of pre-approvals being cancelled, applicants being approved for substantially lower amounts and many people who would have been approved before December now being declined for their home loans.

"For those with a strong debt servicing position, nit-picking over how many coffees they have per week or pulling them up for having too many Cab Savs over Christmas is not a position we're interested in taking.

"Our priority is to comply with these new regulations without adding unnecessary hurdles for our customers. The benchmarking model we've implemented enables us to provide better customer outcomes in a climate where it's becoming increasingly difficult to buy a house," he said.

For Resimac Prime applicants who fit the criteria for benchmarking, advisers will not be required to provide 90 days of bank statements if they wish to take advantage of the faster pre-approval option.

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