In this article in the Sydney Morning Herald we read the story of one young woman who first obtained a Home loan six years ago, today the process is very different.
Changes in legislation and the National Credit Consumer Protection Act have tightened lending requirements and focus on providing a loan that is not “unsuitable’ for the borrower. In the past an applicant could ‘guesstimate” their expenses and affordability and there were no checks made to see the accuracy of this information.
The requirements now for ‘monthly expenses’ include analysis of 3 months of bank transaction statements to calculate the actual spend on all categories, including Transport, Household expenses, Groceries, Entertainment and Eating out etc. Explanations are required for one off purchases and also for cash withdrawals at atms. If you’d like to raise a red flag!!! then Easybet, Sportsbet accounts and Zippay, Zip money and overdrawn accounts will be assessed as to their impact on your ability to service the loan. Got a credit card? New regulations from ASIC to start in January 2019 will mean that you need to show affordability to pay the credit card debit off within 3 years – no hopping from one interest free credit card to another!
There are so many different impacts on your assessment for a home loan that mortgage brokers are proving even more important now. We are able to go through your situation and find the appropriate lender that has the ‘appetite’ for your situation. The focus does not need to be on the traditional main stream lender as there are many options. Dont forget that each application that is submitted impacts on your Credit File, so you want to be well prepared to reduce the chance of a decline.
So, most importantly, come and see us before you would like to apply so we can assist you in preparing to get the best possible options. #askmehow arobins@toucanfinance.com 0412291226
