Christmas Home Loan Cut Off Times

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In a rush to get home loan and investment loan paper work processed before Christmas, lenders have set specific dates for submission.

Below I have provided a list of estimated cut off dates before the 23rd December deadline. This summary of what lenders are doing  and you should check with your lender or broker to find out specific dates from your lender

Home Loan Approvals: 5th December

First Home Buyers Grants (FHOG): 9th December

Settlements: 12th December

Drawdowns: 12th December

External Refinances: 5th December

Loan Variations: 16th December

Discharges: 28th November

After these dates there is a great possibility that your home loan requests will not be processed before Christmas. So be mindful of these dates and contact your lender or broker now to ensure that your application is not delayed.

If you have any questions about home, investment or commercial loans, please feel free to contact us.

To view and compare current home loan and investment loans click the link below.

If you are looking for a commercial loan or looking for a better deal please visit our commercial loans website.

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CBA – Commonwealth Bank Increase Interest Rates by 0.15%

 

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Following Westpacs 0.20% move to increase variable interest rates the Commonwealth Bank has today announced an increase in its variable home loan rates by 0.15%pa (15 basis points), citing that they are  partially offsetting costs associated with recent changes to capital requirements. Their Fixed rates and business lending rates remain unchanged.

For home loan customers, the standard variable rate for owner occupied loans will increase to 5.60% per annum and the standard variable rate will rise for investment home loans to 5.87% per annum. These changes will become effective on Friday, 20 November 2015.

The change is just under a month away so those considering new finance within this time should take into account the interest rate change.

There are many deals out there and you can compare home loans and compare investment loans at our home loan comparison pages.

If you need help with your home, investment or commercial finances we have professional mortgage advisors Australia wide that offer free mortgage help by simply contacting us.

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Property Investment Loans – New Regulations Shake Up Lending

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In the last months we have seen lenders tightening up their lending to property investors for both existing and new customers.

The Australian Prudential Regulation Authority (APRA ) recently moved to tighten lending criteria for property investment loans, many lenders are forced to reduce their lending risks.

 Why?
The reason for the stricter lending criteria is that APRA set a benchmark of 10% maximum growth for residential investment mortgages. The big banks were beginning to exceed this benchmark level and APRA had to take action.

By taking these measures, APRA is attempting to make the property market conditions safer for consumers. Rapid growth in property investment lending can be perceived as risky as investors may be placing ‘all their eggs in one basket’ rather than having investment diversification.

Lending criteria to reduce growth varies from lender to lender but we have seen changes across the board from banks to non banks. Some have already implemented the changes while others will be applying them soon in the coming months.

What do the changes mean for investors?
While banks and other non bank lenders have announced varying policies here is an overview of some of the measures that have been put in place for both new and current borrowers:

Stricter criteria to approve investor loans
This includes excluding certain properties for investment purposes. For example, not lending in certain postcodes or types of properties that are deemed high risk. Rural properties and high density apartments are prime examples.

Increased Interest Rates for Investment Loans
We have seen an increase in investment loan interest rates from the major banks and non-banks. This means that banks are no longer offering discounts for investment loans as they previously did and packaged.

Lenders are also penalising borrowers with “interest only” loans but will offer a discount for property investment loans that are paid with “principle and interest” repayments.

Deposits raised up to 20%
Lenders have also increased the required deposit. Previously, property investors could borrow up to 95% of the property’s value but some lenders require a 20% deposit where they can only borrow up to 80% of the property’s value.

Some lenders are not allowing investors with a current investment property to use the existing equity in that property to leverage for further investments where the LVR falls outside the 80% LVR benchmark – effectively forcing them to refinance.

Rental Income For Servicing Decrease
Lenders have reduced the amount of rental income taken into consideration when assessing an applicant’s income. Some have also taken out the negative gearing component in the assessment. This means that property investors will need to show other income outside their property investments to obtain a loan if servicing the loan is tight.

What do the changes mean for owner occupier buyers?
Predictions are that the owner occupier market will increase as a result of tightened criteria for property investment loans. Many lenders have recently announced a raft of changes to new owner occupier loans including lower interest rates, cash back offers and the waiving of annual fees.

Where to From Here?
While these changes affect banks and non-banks in different ways there are discounts that still can be found.

You can compare property investment loans at our mortgage comparison pages.

If you are looking for a home loan deals for owner occupied properties go to our compare home loans page.

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How Mortgage Brokers Can Help…

More than ever mortgage brokers can significantly save you time finding a home or investment loan due to the new  regulatory requirements.

The new legislation requires that all lenders and brokers assess an applicant before they can recommend products. Often this requires supporting documentation that includes;  tax returns, pay slips, identification, other loan statements such as car, personal and home loans and other forms of documentation. Also, if there are two applicants then both have to be present at the interview.

If you were to shop around for a mortgage then this process can be very time consuming. Using a mortgage broker can take one lot of documentation, one interview and compare your requirements to hundreds of loans. It is really that simple.

Most brokers have at least up to 30 lenders to choose from that include the major banks, second tier banks as well as non bank lenders. Therefore, you are likely to get one of the most competitive loan solutions based on your finance needs.

If you are interested in speaking to a licensed and experienced mortgage broker in your local area please submit a mortgage quote.

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Mortgage Brokers Help Save Finding a Loan with New Credit Laws

The new National Consumer Credit Protection Act  (NCCP) makes it harder for borrowers to compare loans.

Recent law changes to the mortgage industry require mortgage brokers and lenders to qualify a client before recommending a mortgage product. This requires more documentation and checks than ever before seen in the industry. It  can be exhausting and time consuming for the consumer to submitsupporting documentation to each lender before they can recommend a home or investment loan.

 This means  that the consumer will settle on one lender  or comparing  a few lenders due to the frustration of submitting documentation to a lender before they can recommend a product. This could cost the consumer by missing out  on a loan  product that could save them thousands of dollars over the life of the loan.

mortgage broker can help save time by allowing the borrower to submit one set of supporting documentation and recommend various products from multiple lenders that are suitable.

Most mortgage brokers have at least 10 lenders they can choose from and they should have access to all the major banks.  Ask your broker what lenders they have access to and  make sure they are accredited with the major banks.

If you are looking for a mortgage broker in your local area please contact Smart Search Finance by submitting a mortgage quote.

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Current Lender Specials

Below are current specials offered by various lenders.

Commonwealth Bank – 3 Year Rate Saver – $0 loan service fee for new borrowing

Homeloans – $0 upfront for their Premium Full Doc Loan

St George Basic Variable – Low rate at 4.99%, no up front and ongoing fees for new customers only.

Westpac – .20% discount on all fixed rates under Premier Advanatge Package. Nil upfront fee for Flexi First Option Home Loan for first home buyers.

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