Today’s Lending Environment

AS your local Ballarat Mortgage broker, I am continually being asked about todays lending environment. Questions such as, “Is it hard to get a home loan these days?” and, “Are home loans taking longer to get approved?”

Lenders are scrutinising home loan applications more than ever before – paying particular attention to applicant living expenses, which means that some home loan applications are now taking longer to progress from application through to settlement. A loan that may have taken a few days to approve in the past can now take as long as six weeks. Lenders are going through a home loan applicant’s account statements, credit card statements and living expenses with a fine-tooth comb, looking for any expenses they consider a risk. So why is this happening?

In the past, borrowers may have been placed into home loans or financial contracts that may not have been suitable for their circumstances, which put some of them in financial hardship. Lenders are legally required to meet the standards set down in the National Credit Code. This legislation is aimed at protecting borrowers from being placed into unsuitable loans.

The performance of lenders in particular in meeting these parameters has come under close scrutiny of late; this has led to lenders tightening their lending criteria, to better comply with their responsible lending obligation.

These changes have been put in place to protect Australian borrowers from undue hardship. One area that has come under the spotlight is living expenses. Lenders are very concerned about not only what you earn but how you are spending. They want to know what lifestyle you are living and how borrowing money will impact that lifestyle.

It is now more important than ever before to seek financial advice before applying for a home loan. A qualified mortgage broker and financial adviser can help you assess where you stand financially and what your borrowing power is. Your local broker can help you secure pre-approval on a home loan so you know what property you can afford to buy.

At Mortgage Choice we can help you submit a successful home loan application and realise your property ownership goals. From purchasing your first home or investment property to refinancing an existing loan, we can help you secure a competitive home loan that is suited to your unique financial goals and needs.