Many of us have found ourselves in the thick of financially challenging times right now. From consecutive rising interest rates to cost of living pressures, the average Australian is likely to be checking their expenses and tightening their purse strings. For homeowners, that also typically means conducting a home loan health check to see if their mortgage is still serving their best interests or if they could be saving money with a different loan or lender.
Refinancing is a clever way for borrowers to stick out the difficult times while hanging on to their property. It can often mean saving as much as 0.7% in a typical home loan.
So why don’t more homeowners take advantage of this savings? Refinancing often carries an undesirable reputation for being a complicated, time-consuming process. The perceived difficulties turn many Australians off exploring refinancing as a financial strategy.
Fortunately, this is no longer the case thanks to the introduction of comprehensive credit reporting. This data service makes the refinancing process quicker and easier, meaning borrowers can be in a better financial position with much less hassle.
This new system of comprehensive credit reporting aims to provide Australian lenders with a more complete picture of each borrower’s financial situation. Put in place by the federal government, its goal is to help lenders make better informed decisions about who they lend money to, and how much. So now when you apply for a home loan or refinancing, the lender will look at this more complete credit report. This helps them decide if you’ll be in a good position to pay off the debt.
One of the major differences in the new comprehensive credit reporting system is that previously only ‘bad’ credit behaviour was shown. However, now all of your ‘good’ behaviour is included too. For example, your regular repayments on your current home loan will also show in your credit report.
This is great news for borrowers because it helps lenders to see that you can manage debt well. So rather than just reviewing bad financial behaviours, they can also take into account good financial behaviours as well.
Comprehensive credit reporting requires lenders to share certain information with each other. This includes information on loan amounts and repayments. By sharing information we’re able to help paint a more complete picture of your credit behaviour.
This shared information simplifies and speeds up the credit assessment process when applying for a new loan or refinancing. Rather than you having to fill in complicated and time-intensive paperwork each time you apply for a loan, this will be passed along by the lenders themselves, saving everyone time and hassle.
This is particularly pertinent during these difficult economic times when refinancing would be a beneficial move for many borrowers. Comprehensive credit reporting takes the tediousness out of refinancing for borrowers. As mortgage brokers we now have lots of data. This means we can deliver high tech, low touch processes that require less effort from you as a customer.
New technology and systems are being innovated every day. For example, we use illion BankStatements, an automated and free service that allows you to quickly submit bank statements to our team and your loan providers. And it is extremely secure. Nothing is stored by illion, so there’s no risk of data leaks. And the process is used by hundreds of companies in Australia and New Zealand. But by using it we can simplify and speed up the loan application process for you.
This is just one of the many ways we are working hard to ensure that you have the right products to suit your unique needs. And the new comprehensive credit reporting helps us to accomplish that!
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