Non-bank lender TechLend has rolled out a new technology that can assess bridge loans applications and provide pre-approval within an hour.
TechLend's technology utilises property data and values to make a quick assessment of bridge loan applications and provide conditional approvals within an hour of submission.
How TechLend can provide fast pre-approval
TechLend co-founder and chief executive Aaron Bassin (pictured) said borrowers will only need to fill out a five-minute online application, which will go through an eligibility calculation for instant pre-approval.
"What makes our technology so effective is that the proprietary algorithms we use have been built on modern frameworks unlike the banks that are tweaking legacy systems," he told Your Mortgage.
"Our algorithms sort through credit reports, bank statements and heavily focus on property data which allows us to determine with strong certainty whether an applicant is suitable for a bridging loan."
"You could literally apply for pre-approval on bridging finance on your way to a house inspection or auction and be able to bid with certainty once you get the green light from us."
TechLend recently clocked $100m in bridge loan applications.
A bridge loan is a short-term loan option typically used by home sellers to "bridge" the gap between having to pay for a new deal and getting the proceeds from the sale of their existing property.
Reducing the stress in applying for mortgage
Mr Bassin said the pre-approval technology for bridge loans aims to reduce the stress of the mortgage application process, particularly for owners and investors who have limited time.
"Our product caters to a wide range of customers from business owners and those who are self-employed, to retirees looking to downsize," he said.
Mr Bassin believes that there is currently a gap in the market for bridge loans and this new technology will help address this challenge.
"Slashing times and offering superior customer service gives people peace of mind so they can walk into an auction or meet an agent with confidence knowing the finances are already sorted for them," he said.
"As older generations looking to retire, move out of the cities, or move to more comfortable housing arrangements we'd also expect to see our customer base grow substantially over the coming years."
Move to non-banks
While the recent changes in serviceability rules does not impact non-bank lenders, Mr Bassin believes it could potentially move borrowers away from traditional lenders.
"Fintechs are able to be more competitive offering better outcomes for customers and customer service that banks simply can't," he said.
"With the introduction of further regulations, I could see this migration to fintechs and non-bank lenders accelerate, but only time will tell."