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Technology seems to change everything.
An approval of a home loan used to require a lot paperwork and tedious processes.
“The average approval time in Australia is around 22 days. I don’t know if you’d call that quick – we certainly don’t,” Chief Executive Anthony Baum said.
“I question whether that’s acceptable in the modern world, where we can do most things instantaneously at a time that suits us.”
Tic:Toc’s online system took three years to develop, but digitises every step of a process that use to involve human beings.
It automates the application process and approves it faster than other online applications.
“Over 80 percent of Australians who are looking to either refinance or get a home loan start the search online,” Mr Baum said.
“We just enable fulfilment through an online process.”
The system instantly estimates the current or future value of your property in just 22 seconds.
It verifies your identity before determining how much you can borrow.
If everything is in order, it approves your loan. It may send you loan documents for signature within an hour, depending on where you live.
Tic:Toc explains this by stating that it saves on interest rates and fees and is passed along.
Experts in tech believe that this is an excellent example of the rapid change in finance.
“Whereas someone had to come to your home to value it, that’s now an online database,” technology expert Trevor Long said.
“Whereas before you had to fill out forms, that’s now all online.
“The information that’s available on the internet and databases now means that these kinds of things are very possible and will be the way of the future.”
But, at a time when the regulator is cracking down on risky lending practices, this system won’t suit the complicated borrower.
The best way to make it work for you is to be organized and have all your financial and personal information.
Tic:Toc’s loans are underwritten by a bank and it says it follows the same responsible lending practices all lenders should adhere to.
Traditional brokers claim that the mortgage market has become more complicated than ever.
John Flavell, Chief Executive at Mortgage Choice warns that what might seem to work for a borrower today may not last over time.
“You can get some great information from websites but it’s that human interaction, the relationship and having somebody working for you consistently to make sure your needs are being met as they change, is where the value is,” he said.
Speed, he says, isn’t everything when the stakes are so high.
“Whilst a product might look less expensive today, it might not necessarily meet your needs into the future,” Mr Flavell said.
“So, the difference between information and knowledge is vast and the cost to consumers can be most significant.”
Mr Long said while there’s more of this to come to finance and lots of other sectors, banking is most vulnerable.
“The big banks need to look closely at this and realise they are being undercut here,” he said.
“They are being disrupted in the biggest possible way because this is the basis of their big business.
“There’s a generation of people who are very happy to hand over the information that’s being asked for here – very personal and private information – knowing that it’s going towards an outcome, in this case a home loan.
“There also a generation of people who are looking at it going, you know what, the price is cheaper. I want it and I want it now.”
Tic.Toc only allows for major cities because it is necessary to obtain accurate online valuations. They started offering loans today.
Consumers should seek their own advice before making major financial decisions.