Finance is a wild ride at the moment, with lenders making changes to policies daily, so keeping up is a constant battle. So to give you a short course, here are some interesting developments:
1. Due to changes made by ASIC, the Australian Securities and Investments Commission, banks can now debit funds from a savings account of yours if the funds were unauthorised, illegal, or fraudulent. (Source: ING.com.au) So that is a game changer for the fraudsters!! And that may mean you have a better chance of having funds returned if they are stolen from your account.
But this should also be a warning to people to keep funds spread across several accounts, as I wouldn’t want to have my money frozen while the bank sorts out if my money was fraudulent. One option is to consider having an additional account with some of your savings, just in case this were to occur. So multiple offset accounts might be an option to solve this problem. Call us if you need help setting this up.
2. Several lenders are removing or reducing the cash rebates, which frankly is a welcome change, as I would rather they gave you a better interest rate all round than hand out cash for nothing, which encourages churning and moving lenders for the sake of it.
3. Fixed rates on many home loans are now dropping; we are seeing rates around mid 5’s% for three years fixed. This is a very different scene than we were looking at even a couple of months ago and I wonder if this suggests rates may not be rising too much further. I don’t have a crystal ball, but I do know that banks generally do not lose on fixed rates.
4. Changes in lending policy are also coming thick and fast. Some are now accepting 90% of the rental income, whereas prior, many would utilise only 80% or less.
Some lenders are now accepting commissions, overtime, and other bonuses at 100%, whereas previously only emergency services personnel would be accepted for 100% in servicing. These are obvious changes to help drive business, and if the loan amount you were previously servicing was reduced due to these factors, call us for a re-assessment as things may well have improved for you.
5. More lenders are accepting high-density units and lending up to 80% loan-to-value ratio whereas previously they would only lend at 70% or even 60% and some have even reduced the minimum square metres they will accept which is welcome as there are a lot of very small places out there needing a loan.
Check out my video this week with our client Maureen Pound, who runs an amazing business called Global Teams, which helps place virtual assistants with Aussie businesses. She is explaining how we helped her get a low-doc loan, which is often an easier option for business owners.
We have also just launched our First Home Buyer ScoreApp. If you are interested in buying your first home, take our quiz below to see if you’re ready to take this big step.
As always, if we can be of any assistance and you would like a one-on-one consultation for any loan type, please reach out and book a time here.