How to get a home loan post-royal commission

Feb. 14, 2019 - PRLog -- MEDIA RELEASE
Experts reveal how to get a home loan post-royal commission

The events of the last 12-24 months have conspired to make it extremely challenging for Australians who are keen to buy property. From the APRA-led credit slowdown, which forced lenders to limit the number of investors and interest-only loans on their books to the Royal Commission, which obliterated the banks over their irresponsible lending practices and a nationwide slow-down in property price growth, a number of factors have made it harder to get a home loan now compared to a few years ago.

Tighter lending criteria and longer processing times are making it difficult for even the most vanilla borrowers to secure finance – culminating in what some in the industry are calling "the near prime mortgage crisis".

With the recommendations from the banking royal commission hot off the press, the latest issue of Your Investment Property takes a deep dive into what homebuyers can do to get a loan in the current environment.

"The royal commission called out the banking industry for its lax practices, such as its failure to thoroughly check living expenses. It's now harder for borrowers to get a loan as lenders require them to list every single expense," says Your Investment Property editor Sarah Megginson.

"You need to present the best possible case regarding your ability to service a new loan, which is why we've spoken to the experts to get their tips on how to boost your serviceability."

Your Investment Property's tips on getting loan approval include:

·        Be prepared to look beyond the big four – while the big banks have tightened their loan application criteria, making it harder to access lending in the current mortgage market, smaller institutions and non-bank lenders can often be more flexible

·        Talk to a broker – A reputable broker will help you find the best rates and most suitable loan products on the market and may be able to guide you to products you were not aware of

·        Prepare early – The increased burden on banks to get it right when assessing applications means many lenders are asking for extra information, which can also affect application processing times.

"It is a really confusing time for investors and there are so many unknowns, but one thing that history does tell us is that good quality property always rises in value, so don't let the current market confusion deter you from taking action," says Megginson.

The complete guide on how to get a loan in 2019 is available in the new issue of Your Investment Property magazine. Also in this issue, we profile a property investor who has survived plenty of ups and downs, including the GFC, to amass a portfolio worth over $9m; we walk you through the process of investing interstate; and reveal how to conduct your own DIY building and pest inspection when you find the right property. This and more in the March issue of Your Investment Property magazine, on sale from 14 February at leading newsagents and Coles supermarkets nationwide or available online at http://shop.keymedia.com.au/.