Temporary Suspension of Preapproval Applications
What is changing?
Effective from Wednesday 6th November, 2019 Preapproval Loan applications will no longer be accepted until further notice, except for the following circumstances:
- Construction portion of a land purchase and build loan
- Refinance with associated preapproval for new purchase
- Existing Auswide Customers
Auswide Bank is extremely committed to helping everyday Australians achieve home ownership. We do understand the importance and value for a customer to be able to enter into the property market with the confidence our fully assessed preapproved loans provide.
However, we are also conscious of our obligation to our brokers that place their confidence in us to deliver the right customer experience to their clients who have committed to purchases and/or need to refinance their current facilities to achieve their financial objectives.
Why has this decision been made?
A recent change to our Consumer Credit Policy extended the validity of our fully assessed preapproval applications from 30 days to 90 days. This has resulted in the volume of these applications more than doubling, with no sign of slowing particularly in the higher LVR space.
Providing a fully assessed preapproval that includes Mortgage Insurer's assessment has been a niche offering for Auswide Bank, however it requires the same amount of processing time as an application seeking full approval.
In line with the rest of industry our conversion rate on fully assessed preapproval applications is less than 15%.
The increased volume of preapproval applications has now impacted on our ability to maintain our SLA's for our purchase and refinance applications and we have made the hard decision to temporarily suspend Preapproval applications, with some exceptions. This will allow us to return our SLAs to normal in the shortest possible time.
We expect to be able to restore the acceptance of preapproval applications in the near future as we understand the importance of them for our potential customers.
The Bank will continue to keep you updated as we restore our SLA's and will advise when we can begin accepting preapprovals again.
What does this mean for loans in progress?
- Preapproval applications that are in the system that are not related to a land purchase/construction application or a refinance/purchase application have been placed into a lower priority queue and will continue to be worked. If the applicant enters into a Contract to purchase please advise our LOS team immediately, so that the file can be reallocated as a Purchase.
- Preapproval applications that are in the system where the preapproved loan relates to a land purchase and construction application or a refinance/purchase application will remain in the normal workflow queue.
If you require any further information, please visit www.auswidebrokers.com.au