The Royal Commission interim findings have had an effect on Home Loan approvals. The traditional use of Household spending benchmarks to determine an applicants ability to service a proposed loan has been brought into question. Many lender’s have either tightened up their verification systems or are in the process of doing so. This has resulted in more information being required from applicant’s to determine serviceability.
Many lender’s are also taking a lot longer to approve loans because of the extra care being taken in assessing expenses of a borrower.
We are also receiving application’s from people putting offers in on properties where a previous buyer had been rejected for finance. One of our customers put an offer in on a property at 5% under the price it had sold for a month earlier. The previous sale fell over on finance because the buyer could not get their finance approved within 4 weeks.
There was a seven day finance clause in our customers sale contract and they were very worried the loan would not go through. We put the loan to a major bank and were advised it would take 10 business days for them to even open the file. Fortunately we were able to get the loan approved with a non bank lender at a very attractive rate.
Result a happy customer able to take advantage of a falling market and the assessment slowdown at many lenders.