The Changing Loan Market
0 Comments Published by Michael Nitschke on Friday, May 15, 2009 at 7:25 PM.
Recently I have had some great discussions with some key local finance people about the changing landscape for obtaining finance approvals in Australia. It is amazing that over the last 18 months we have seen such a radical paradigm shift in lending criteria.
I personally like the way the changes have headed - 100% lending and in some cases 107% to include fees and charges on top of the property purchase price - were never going to be sustainable. I love the fact that now borrowers are forced to demonstrate genuine savings, ie not a "gift" from mum and dad of 5% deposit plus fees.
It means it will re-educate young first home buyers and investors also the importance of saving money and creating a safe and secure financial foundation to build from. Whilst I understand very well the leverage of using OPM (other people's money, ie the banks) to invest with as opposed to your own, it is still important to create that financial foundation so that when the economic landscape changes we are able to have a "fall back" position.
For some great info and insights on the finance market in Australia check out http://loansense.com.au/blog/homeloan/lvr/ - Australia Mortage and Loan information - a great website for some easy to understand tips.
Cheers folks
I personally like the way the changes have headed - 100% lending and in some cases 107% to include fees and charges on top of the property purchase price - were never going to be sustainable. I love the fact that now borrowers are forced to demonstrate genuine savings, ie not a "gift" from mum and dad of 5% deposit plus fees.
It means it will re-educate young first home buyers and investors also the importance of saving money and creating a safe and secure financial foundation to build from. Whilst I understand very well the leverage of using OPM (other people's money, ie the banks) to invest with as opposed to your own, it is still important to create that financial foundation so that when the economic landscape changes we are able to have a "fall back" position.
For some great info and insights on the finance market in Australia check out http://loansense.com.au/blog/homeloan/lvr/ - Australia Mortage and Loan information - a great website for some easy to understand tips.
Cheers folks
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