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The major bank has announced a number of changes to its submission standards for loan applications in a bid to “achieve unconditional approval at first touch”.
NAB has informed brokers that as of Friday, 19 June, documents required for the formal assessment of a loan application will became “mandatory” upon initial lodgement.
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Documents required include:
- Evidence of a borrower’s income (in addition to PAYG, rental income and self-employed income). If an income type is selected as part of the applicant’s financial position, you must provide evidence of this income.
- Verification of rental income for applications that include an investment property, if gross rental income is greater than $0.
NAB will also require submissions to contain the following supporting documentation, where applicable:
- a Guarantor Suitability Assessment form
- a Trust Deed form
- a First Home Owners Grant application form
- documentation of funds to complete for purchasers if the loan-to-value ratio (LVR) is between 80 to 90 per cent
- evidence of genuine savings of at least 5 per cent of the purchase price for loans with an LVR over 90 per cent
- building and construction plans and a Fixed Price Building Contract for loans with construction purposes
NAB has claimed that the changes are designed to reduce turnaround times and enable more applications to “achieve unconditional approval at first touch”.
According to Momentum Intelligence’s latest Broker Pulse research, NAB’s turnaround times have increased from an average of just over 12 business days in April to 14 business days in May.
This has coincided with a fall in the share of brokers submitting mortgage applications to the big four bank, down from 29 per cent to 25 per cent over the same period.
Accordingly, NAB’s net promoter score slipped deeper into negative territory, falling from -30.9 in April to -48.1 in May.
NAB isn’t the only big four bank to amend its application process in a response to a blowout in turnaround times.
Earlier this month, ANZ overhauled its process by onboarding and reallocating 150 staff to its assessment team and prioritising “time-sensitive” loan applications.
ANZ has publicly acknowledged the deterioration in turnaround times, which increased from an average of 10 business days in April to an average of 22 business days in May.
[Related: NAB, Westpac lose broke business]
