Is this the game changer for prequalifying buyers?
Home loan consultants are reported to be “over the moon” about a new online, prequalifying tool that speeds up home loan applications.
While prequalifications are the buzz word in banking circles to try to eliminate bond declines after deeds of sale are presented to them, many banks and mortgage originators already offer such a service.
So how then does this new online tool differ? Its creator, Meyer de Waal, says it not only prequalifies the client but “streamlines the entire home loan application process for the banks themselves”.
My Bond Fitness is an online portal where prospective home buyers can see if they are first credit-worthy before enquiring about the home loan amount they qualify for. Here, the aspiring home buyer can upload his bank statements, employment contract and other supporting documents as well as link his bank account statements to the system. Once on My Bond Fitness, the applicant’s profile and complete supporting documents can be sent directly to bond originators when an offer to purchase is signed.
“That’s the first and last time the applicant has to upload any documents,” says de Waal, noting that the system updates income and expenditure information every three months.
The practicing attorney, who is funding the venture with his own resources, is offering the software to banks, mortgage originators and the real estate industry to help clients obtain a fast and accurate home loan estimate “within five minutes”. This before the deed of sale and home loan application are submitted to higher echelons in the banking system.
“We studied the industry and found that currently all home loan prequalifications are done through a long, drawn out administrative process,” says de Waal. “Some lending institutions do have a web-based application form but the process behind the prequalification estimate is still a manual process to obtain supporting documents. These delays are further impacted by the chance that the applicant provides incomplete or incorrect information, which could ultimately lead to the loan being declined or approval delayed.
“Working with Limitless, a leader in software and bank integration technology, My Bond Fitness developed an accurate and secure online process that enables an aspiring home buyer to obtain a fast and accurate home loan estimate. Limitless has designed a functionality that is light years ahead of any prequalification home loan estimate as it makes use of real-time credit bureau data, obtained from Compuscan, to begin the credit check process.
“Taking things a step further, the application extracts the last 90 days of transactional activity from selected bank accounts, identifies regular and fixed expenses like debt repayments and debit orders, and identifies and categorises day-to-day expenses. All this is done through Limitless’ partnership with Yodlee, a secure integration system that talks directly to the customer’s bank with all the normal security protocols of a typical online banking interaction.”
Consumers can rest assured the credit check is a “soft” impression and therefore doesn’t negatively impact on the client’s credit scoring.
Comments one estate agent and a former private banker: “It sounds like an interesting product and it will be interesting to see how it works in reality. I imagine it will be useful for applicants who are salary employed and have a very basic bank statement, if I understand it correctly.
“My one concern is that the banks are still going to request the applicable financial information such as pay slips, bank statements, lease agreements, proof of bonuses, commission statements or tax returns. So while it will assist you upfront to prequalify, you are still going to have to go through the process with the banks.”
De Waal says this is not the case at all.
“We are aware that the applicant only receives an estimate of an approval – even a bank will also [only] qualify the ‘approval’ as an estimate as the final check and approval will be done only once a home loan is approved.
“Our system allows and then (after receipt of the estimate) requests the customer to upload his important documents onto the system. It is refreshed and updated on a regular basis, which is useful when the buyer takes a long time to find the right property. The full set of supporting documents is then submitted to the bank via a mortgage originator through an API integration as a full home loan pack.”
Jason Shaw, national sales executive for Pam Golding Properties, thinks “any development of technology to help speed up the process of prequalifying clients is to be welcomed by the industry”.
“Through our association with Ooba we have noted that 80% of our clients who go through the prequalification process with us will receive a loan for the prequalified amount through one of the four major banks,” he says. “I would be interested to see how the online tool fares in this regard and the ‘intelligence’ that this software has in order to do the required work.”
My Bond Fitness recently concluded a deal with a niche bank, which also includes qualifying prospective buyers for FLISP applications.