So how will lenders view me now?
Rising property prices and pressure from banking industry regulators are making most major lenders review how they assess borrowers.
The interest rate and credit policy areas of all lenders vary greatly. More than ever, it's vital to link with a lending specialist who can assess your position across a range of lenders. This helps you maximise your options, and also helps you access the right lending product.
Recent changes that may affect you
- All lenders now apply higher living expenses to their affordability assessments which may affect your borrowing capacity. Some lenders increase your living expenses in line with increased income levels.
- Most lenders now look at your total liabilities and apply loadings to some outside debts (mainly existing mortgages) when assessing your borrowing capacity. This may reduce your capacity with some lenders. There are also lenders who have removed negative gearing benefits.
- High lending to valuation ratio (LVR) loans have very strict assessment criteria. Some lenders have significantly reduced the limit they will lend. Your credit history, employment and overall position are now assessed in even greater detail.
- Some lenders have reduced their maximum LVR limits in NSW.
What about investors?
- Regulators want lenders to reduce the amount of investor loans being approved. In response to this, interest rate discounts for investors are being removed by most lenders. In some good news, though, a number of lenders are now trying to approve more owner occupied loans so there are still some great offers available for buyers and refinancers.
- Borrowing capacity for investors with multiple property holdings may be reduced with some lenders.
Should I be concerned?
No - but it pays to be smart and link with a lending professional who works for you, and has access to multiple options. LJ Hooker Home Loans is a network of property lending specialists who are available to our premium investor clients. Talk to your property manager about linking with one of our local specialists today.
Visit ljhookerhomeloans.com.au to find out more.