The majority of recent media reporting around home lending has focussed on the tightening of lending criteria, with a particular focus on applicants’ living expenses and how they impact on how much someone might be able to borrow.
This week the Commonwealth Bank announced that they would be requesting much more detail from applicants around their monthly spending habits, and then comparing those figures with their bank statements, which follows on from similar moves by both Westpac & ANZ earlier in the year.
Earlier this week we spoke with Mikael Liddy from Fresh Home Loans about this recent news. Read on for Mikaels update.
While these measures might indicate that it is becoming harder to borrow money to buy a home, the changes are more a case of the banks adjusting their actions to meet the same standards that a good mortgage broker should operate to on a daily basis. As a broker, you are being entrusted to deliver one of the most important moments in someone’s life, the purchase of a home, and so have a responsibility to do everything to make sure that dream doesn’t turn in to a nightmare of unaffordable repayments & financial stress.
Our approach at Fresh Home Loans has always been to have a detailed conversation with clients about their living expenses when establishing their borrowing power, and if at first glance their statements don’t support those estimates, in the majority of cases that can be explained to a lender by pointing out one-off or discretionary expenses. It’s this approach that over the past few months has helped a number of clients achieve their dream of buying a home, even after being told no by their own bank.
