Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Banks likely to tighten mortgage lending even further

mortgageapplication x mortgageapplication x
Francesca Krakue 4 minute read

Mortgage brokers believe more banks will tighten their lending criteria this year and say that one policy area will become a key focus for lenders.

Several brokers have told The Adviser they believe the banks will continue to tighten their lending criteria throughout 2016.

“We predict that assessment rates will increase and there will be a spotlight on customer declared living expenses,” George Samios of Madd Loans said.

“We also believe LVRs will start to reduce for high density units in metropolitan cities around Australia, as there are concerns of oversupply and under-demand for these properties.” 

Advertisement
Advertisement

Investors Choice Mortgages’ Jane Slack-Smith agrees that banks will be paying closer attention to applicants living expenses.

“Soon we will see attention switch to owner-occupiers, kicking off with justification on interest-only loans,” Ms Slack-Smith said.

“With out-of-cycle rate rises expected in 2016, the lenders are sending a very clear message that the good old days are gone.”

However, one broker says that by tightening lending criteria, banks are failing to understand the changing nature of employment. Steve Milligan of Launch Finance Mandurah told The Adviser that the lenders “can’t seem to grasp” the shift for employers to hire staff on a casual basis.

“This is a reality of employment today. These days, more and more employers are electing to employ their staff this way,” Mr Milligan said.

PROMOTED CONTENT


Meanwhile, Mortgage Express Tracey Pye pointed out that in making such policy changes, banks are “testing the waters”.

“Should their market share wane, they will again make the changes to get back on board,” she said.

Smartline’s Cathy Anderson sees this trend as an opportunity for brokers.

“I think that mortgage brokers will be able to add more value than ever to the process of obtaining a loan,” Ms Anderson said.

“I see it as a key part of my role to constantly monitor the changing environment to understand and explain what it might mean for my clients.”

Mr Samios agrees that such changes, if implemented, will make mortgage brokers “more attractive for customers”.

[Related: Award-winning broker warns investors as challenges loom]

Banks likely to tighten mortgage lending even further
mortgageapplication x
TheAdviser logo

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

mortgageapplication x

 

more from the adviser
merger puzzle Joust launches broker-borrower matching service

The online home loan auction platform has launched a new matching...

uptick graph Prospa boosted by business sentiment rise

Prospa managed a personal best of $182.7 million in loan originat...

Peter White Brokers must vaccinate: FBAA

The Finance Brokers Association of Australia has urged brokers to...