Cutting out pre-approval from the home loan process

  • By Zilla Efrat

Digital home loan lender Nano says it is disrupting the Australian mortgage market by providing home buyers and property investors with fast upfront full approval, not pre-approval.

“Our record time for full approval is sub 10 minutes, making it the fastest loan approval in Australia, if not in the world,” says Andrew Walker, co-founder and CEO of Nano.

Nano’s proprietary automated decision engine checks each borrower’s credit history, serviceability, and identity, and completes a digital property valuation.

This overcomes several problems for home buyers.

According to Nano’s research, over 70 per cent of would-be home buyers said their lender took over a week to approve their home loan, while one in five stated it took over three weeks.

The research also found that one in five Australian homeowners actually missed out on a property due to a delay in the financing, sometimes even more than once. 

Walker says: “Traditional lenders’ slow approval times add an unnecessary layer of anxiety to an already complex process. When you combine this with a fast-moving property market, it makes an already stressful process even more daunting.

“If we compare home loan approval times to the median days’ properties spend in market, 20 per cent to 30 per cent of borrowers are at risk of missing out.

“Unnecessary paperwork and manual credit-underwriting slow things down, and it’s at this point that home buyers start to feel the stress and anxiety that comes with waiting for their loan to be approved.”

Nano’s product enables approved home buyers to borrow up to $2.5 million or 80 per cent of the valuation with terms out to 30 years at a loan rate from just 2.24 per cent per annum.

According to Nano’s research, 94 per cent of Australian borrowers believe pre-approval gave them the confidence that their loan would be approved faster. 

However, despite having pre-approval, one in five missed out on a property due to a delay in securing financing and for one in 10 that happened more than once.