Tighter credit availability makes it harder for home buyers to get loans – mortgage survey

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Mortgage broker and real estate investment mentor Luica Xiao summed up bank lending to first-time buyers, especially those with less than 20% deposit, as “quite difficult.”

The level of “uncommitted monthly income” (the amount of money left after deducting all expenses) has increased at all banks, she said.

For example, a bank’s requirements for uncommitted income have been reduced from $ 300 per month to $ 750 per month.

In accordance with the phasing out of the ability to offset interest charges against income from October 1 (applies to investment properties purchased before March 27), for investor borrowers, the valuation of rental income has been reduced to 60% in some cases, Xiao said. This meant a “reduction in borrowing power” for “investors, including” mum and dad “investors.

In a statement on Oct. 22, banking ombudsman Nicola Sladden said upcoming changes to the CCCFA help protect consumers from unaffordable debt.

Those wishing for a loan are advised to allow time for banking discussions (e.g. before an auction date), to be patient throughout the appraisal process and to collect recent information (income, debts and expenses). It is also advisable that they be clear about the reason and the amount of the loan.

“If you’re looking for accommodation, get there early and ask the bank what you need to do to prepare,” Sladden said.

Tony Alexander Mortgage Advisors gathered 60 responses from mortgage advisors across the country and are an early indication of market activity. The full October Mortgage Professionals Survey can be read here.

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