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June to August 2019 Loan Market updates

By: lionel0 comments

In the last couple of months, we have seen major changes post election results

  • Two recent interest rate cuts – bringing the RBA cash rate down to 1%
  • Further possibly of at least another rate cut this year
  • Assessment rate changes by APRA, borrowing capacity increases by 10-15% on average
  • Lender’s interest rates are historically low
  • Market confidence has picked up post election
  • Stock supply for existing dwellings are lower in Sydney and Melbourne, higher auction clearance rate
  • More first home buyers are out in the market and the resurgence of investors
  • Home value on dwelling are up again last month for Sydney, Melbourne and Brisbane CoreLogic Home Property Value Index – Monthly Indices

THE MAGIC QUESTION

Many clients ask me over the last few months – HAS LENDING BECOME EASIER.

THE ANSWER IS NO!
Rates are historically low, however lenders are requesting more compliance than before. Living expenses have also been adjusted to reflect the current market with several lenders. The assessment of applications are still at a micro level, down to the details on bank statements and employer confirmations
We expect this phenomenon to be around for a period of time

See below:
Several lenders, including NAB and Westpac, have informed brokers of their obligations to assist in meeting their obligations under the new code, which includes the provision of additional documentation to ensure clients are fully aware of the ramifications of the choices they make throughout the home loan application process. 

Lenders turnaround time

In August and September this year, many lenders have increased application volumes and hence turnaround time has increased, if you are thinking of a pre-approval or an urgent settlement, it will be good to do it in advance to prevent any delays. Do not be confused by system generated pre-approvals with those having to be assessed by a case manager/credit officer as this will mean a higher chance on the accuracy on your final formal approval. Please ask me if you have any questions on the loan process.

 

 

The Macquarie Perspective
This month, we hear from Justin Fabo, Macquarie’s Senior Economist, about the pick-up in activity in Australia’s property market and the economic factors behind it.

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Happy Mooncake Festival Today to all my clients, associates and friends

May you have a great reunion with family and love ones

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