While other lenders grapple with long lead times and awkward approval processes, fintech Nano has launched a new home loan where loan approval is granted on the spot. What’s the catch?
The new home loan is offered by Nano, which is “not a traditional lender,” co-founder Andrew Walker told Finder.
“It’s a financial technology company that uses advanced data and innovative digital technologies to provide consumers with better financial services,†he explains.
Nano’s first home loan product comes with a very competitive variable interest rate of 2.19%. Importantly, its streamlined online mortgage process promises application approvals in minutes – not weeks or months, with some lenders currently mired in arrears – delivering a fully digital, paperless experience.
“Nano digitally approves mortgage loan applications in minutes, not months… We use cutting edge technology to assess applicants’ financial transaction history data to build a risk profile and assess risk. ability to manage a home loan. [immediately]”confirms Walker.
“This means that unlike traditional lenders, Nano doesn’t require applicants to fill out lengthy application forms, upload payslips, or provide 12-month statements. Nano offers an intuitive, intelligent digital experience. “
It almost sounds too good to be true. In a booming real estate market environment, where loans take anywhere from days to months to process, I asked myself: how do they pull off such a feat?
How to get immediate approval for a home loan
Traditionally, borrowers wait anywhere from a few days to a few months for the bank to process their documents and provide conditional mortgage approval.
Nano avoids this awkward process by introducing a handful of criteria that applicants must meet. Essentially, this means that this loan is only available to the least risky clients in the market.
“In this initial phase, Nano begins by refinancing home loans to savvy, low-risk, digitally engaged clients,†said Walker, who co-founded Nano with fellow Big Four bank executive Chris Lumby.
“Product offerings and eligibility criteria will expand in the future, but current criteria mean applicants must have an LVR of 75% or less, and a minimum household income of $ 150,000 or more,” with at least $ 100,000 from a Pay As You Go (PAYG) source. “
In summary, this means that you need the following to qualify:
- An existing home loan. This mortgage is only available for refinancing, rather than for new customers. This is likely because refinancers have a proven credit history and demonstrate that they can take on the financial responsibilities of managing a mortgage loan.
- A loan-to-value ratio (LVR) not exceeding 75%. Your LVR reflects the share of the property you own compared to the amount of your debt. On a $ 800,000 property, an LVR of 75% means you have a loan of $ 600,000 (75%) and equity of $ 200,000 (25%).
- PAYG income. If you are self-employed or working as a contractor, you will need to purchase this property with someone else who earns a regular income of at least $ 100,000, with a full time job. This is because full-time employment is considered to be more stable than subcontracting or self-employment.
- A clean credit history. It goes without saying that in order to be approved for this type of low risk loan, you must have a clean credit history.
There are a few hurdles to jump through, but if you meet the criteria, you may qualify for a home loan that you can apply for through your smartphone, get immediate approval, and pay a low ongoing interest rate.
“Nano has removed the high loan servicing costs that come with outdated processes and legacy systems used by other lenders, and we’re passing them directly on to the customer through our low, competitive rates,†Walker told Finder.
“The loan comes with a clearing sub-account, which is linked to a Nano Visa debit card and the Nano app that customers can use to spend, pay and put money aside, all This account is tied to the customer’s home loan and helps reduce interest charged by ‘offsetting’ the outstanding loan balance with the amount in your clearing account, allowing customers to better manage their money. “
Potential borrowers can sign up for Priority Nano Access before full launch.
You do not meet the criteria for the new Nano Housing Loan? Check out other cheap home loans with ultra-low interest rates, for refinancing and home buyers – including great deals for those with a low deposit.
