The Australian banking environment has changed substantially over recent years. There has been an unarguable tightening in credit, which became even more restrictive following the Banking Royal Commission, along with a potentially related slowdown of housing lending during 2019.
There is no doubt that Banks and other Lenders within the Australian home loan market have tightened their lending standards over the last 12 months. This tightening is having a significant impact on the borrowing capacity of many Australians looking to obtain a Home Loan.
However the good news is that with some focus and financial management you can still present a strong case on your borrowing capacity to the Banks.
Whether you’re after lower repayments or want to tap into the equity sitting in your home, refinancing can offer a world of benefits. Here are some things to be aware of so that you don’t find yourself hooked into a bad deal. Continue reading Refinancing traps to avoid!
Over recent months it has been very noticeable that banks have been increasing interest rates and tightening credit policy for interest only loans, regardless of whether they are for Investment or Owner Occupation.
In mid 2015 we highlighted through this Blog that Banks were tightening credit policy in regards to investment lending and that had resulted in tightening of lending criteria.
This was initially due to communications from APRA to all Approved Deposit-taking Institutions (ADI’s) about expectations of a range of measures to reinforce sound residential mortgage lending practices. An ADI is basically a bank, credit union or building society. APRA’s expectation was that ADI’s maintain growth in investment lending portfolios to below 10%. Those communications quickly lead to Bank’s: Continue reading Investment Loans – Banks tighten loan criteria
As a general statement Australians tend to be lethargic in reviewing their Home Loan once it has settled. It generally takes another ‘trigger’ event, such as changing homes or renovating before we consider if there is a better loan option available.
Does this mean that many Australians are paying more interest on their home loans than they need to? I would say in many cases this is definitely the case.
So lets consider a hypothetical couple called Bill & Beth.
Mortgage Brokers (also often referred to as Finance Brokers, Mortgage Planners or Credit Advisers) act as an intermediary between lenders and borrowers to negotiate loan facilities.
Over the last 10 – 15 years the usage of Mortgage Brokers in Australia has increased consistently and it is now estimated that approximately 1 in every 2 new home loans in Australia is sourced through a Mortgage Broker.
So why do so many borrowers utilise a Broker rather than going to their local Bank? Some of the benefits and reasons include: