Home buyers say getting loan approval is like winning things or scoring first kiss

Lending rates and prices may be down but home buyers claim being granted loan approval still feels like a win, comparing the feeling to a wide range of surprising events.

Lee Burney and Fleur Maxwell-Garrett said the loan application process was daunting. Picture: Justin Lloyd

Home buyer hopefuls have described the feeling of getting a loan after a tortuous ­approval process as like ­winning a grand final or kissing a crush for the first time.

A new survey has found some buyers also likened the experience to winning a raffle or knocking home early from work on a Friday.

Buyers’ elation at getting approval has come amid an ongoing squeeze on credit, where regulators are still putting pressure on banks to impose tighter lending standards.

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And the credit crunch has continued despite the Reserve Bank of Australia adjusting the cash rate earlier this month to the lowest level since Robert Menzies was prime minister in the 1960s.

Waiting to get approval for a loan has become a tense wait for property buyers in this environment.

More than half the Aussies surveyed said the process of applying for a loan was stressful and close to two in five described it as “overwhelming”, according to the St George Bank research.

Those feelings of anxiety increased the longer the buyers had to wait to get approval.

About 95 per cent of those who had to wait at least seven weeks to get the green light on a mortgage said the long wait made them anxious and impatient.

St George Bank’s general manager for retail banking Ross Miller.

St George general manager Ross Miller said the wait times could be nerve-racking because buyers usually had a lot riding on their loan applications.

“Buying a home is often the biggest purchase someone will make,” he said. “Prior to even applying and waiting for approval, Aussies have often had to curb their budget, build up a deposit … so (getting approval) deserves to be celebrated.”

Paddington residents Lee Burney and Fleur Maxwell-Garrett have been seeking out their first home over the past year and said the loan application process was daunting.

“You never get a real sense of how much you can borrow, everyone is giving you a different number before you start,” Ms Maxwell-Garrett said.

Buyers often supply insufficient paperwork when applying for a home loan.

Knowing eagle-eyed banks were under pressure to scrutinise every detail of their spending habits meant they were nervous about applying, she added.

“We didn’t want the bank to look at our finances and say we spend too much so we scaled back on going out for breakfast, travelling, Uber eats and more.”

Mr Burney said it was stressful knowing a failed bid to get a loan could affect future applications, which prompted them to withdraw an earlier application made in a hurry.

“There was a property going to auction and I’d just started a new job, so I could only show two pay slips, which our broker told us wasn’t enough,” Mr Burney said.

Home seekers who could get their finances in order, particularly first home buyers, had an opportunity to capitalise on lower prices and improving lending rates, Mr Miller said.

He suggested home seekers speak to experts to get a clear understanding of how much they could borrow prior to starting their search, while also learning the ins and outs of the approvals process.

Originally published as Home buyers say getting loan approval is like winning things or scoring first kiss