School holidays were last week and the office was exceedingly quiet. It is funny I notice even those without kids seem to take school holidays as a time to wind down. It is almost a time when everyone has a holiday. I can’t quite figure it out but maybe the reason is that most of the clients are actually away so work slows. If that is the case then isn’t this a good time to snag a great buy in the property market. This must especially be the case if equity in a property purchase has just been increased to 40%? Maybe over the next week as people slowly get back from holiday the market will again get busy. As mentioned above it is imperative with the complex lending environment at present that clients are educated on what they need to be doing to get their finances in order when purchasing. Our Mortgage Express brokers are very good and we should be encouraging every client to use them. Below is an update from Anthony Woolcott from Mortgage Express; ‘As requested by the Reserve Bank – in the spirit of the proposals, we’re seeing the banks start to implement the LVR changes already even though they don’t take effect till 1st September. So far we’ve seen a number of banks advise that their maximum LVR for investment properties is 60% effective immediately – and we expect the others to follow suit. Existing approvals are being honoured.. but won’t be rolled over (use it or lose it!). Owner-occupied lending – the LVR threshold remains at 80% LVR. However, the banks can’t write as many of them now. So we expect they will ration them accordingly…..and getting an over 80% loan will get a little harder again. The good news – non-bank lenders are not bound by these restrictions. I’ve just got an approval home today from Liberty Finance for an investor loan at 80% LVR that the banks wouldn’t touch. 30 year term and Floating rate 5.59% - that’s about as good as the advertised rates at the banks! We’ve now got a few long-term lenders in the non-bank space. Generally happy to lend to 80% for investors…. but also will look at other loans behind them (even maybe vendor finance). Fixed rates not as sharp as the banks….but they’re not too bad all the same. Also got one home last week for owner-occupiers at 85%. Lender was happy to use all the clients overtime in the application (which main banks won’t do for over 80% LVR’s) and were happy for the clients to borrow some money from another finance company towards their deposit (a big no-no for the banks!). The non-bank lenders generally don’t have branches and shop-fronts. So a little plug for the mortgage advisers with access to non-bank lenders - and importantly experience in working with them! At the moment they’re a good option for investors wanting to borrow over 60% LVR. Sounds complicated so anyone thinking of buying or selling for that matter should be talking to one of either Anthony Woolcott or Sarah Langley at Mortgage Express. Leave a Reply. |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Archives
September 2020
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