Many are under the misconception that lenders are getting a little more liberal when it comes to assessing loan applications.
And understandably when one in particular is spending a fair amount of money to get that message across, but from my experience with that particular lender, it is more a branding exercise than a genuine softening of credit policy.
Another lender only just this week made a change to their policy that requires a 1% margin to be factored into the lending rate when accessing the application. Not only are they already factoring in a healthy budget surplus now they are going to be even more stringent.
Yes in this week’s Blog there is an element of venting however I do feel it is justified as I don’t like seeing anyone toying with people’s emotions and as we all know, people buy with their hearts.
Have I crossed to the other side to join the doom and gloom merchants, not likely?
Isn’t it fair that the lenders tighten their lending criteria so as to avoid fall out. My reply to that isn’t fraught with sarcasm but rather fact. They should have done so three years ago when massive price increases swept through New Zealand like a bush fire rather than fanning the blaze by relaxing credit policies which in turn saw many fall victim to the fires.
Sometimes I struggle to understand the minds of some. Sure I realise the brain doesn’t give instant feedback. For some it may take a split second, for others a second or two, and for others they may ponder for a day or so. But three years, that really is delayed reaction.
So, were to from here? Simple really, for many it will be business as usual but for some maybe a tightening of the belt before moving forward and really we have no other alternative, the sooner everyone realises fantasies should remain fantasies and deal with it and start living in the here and now all will be better off.
A survey was done across the ditch that showed 20% of the population in Australia would not be able to afford a mortgage should interest rates increase. A very pessimistic statement I thought. Guess it’s because good news doesn’t sell. I would have thought 80% which is the majority rather than the minority would be good news. But hey, what do we call traffic lights, three colours to choose from and we pick the red and call them stop lights, why not go lights.
As I write this Blog I received an email that reads;
“ASB cuts floating rate to historical low...”
Then five minutes later another from ASB saying all fixed rates have increased! More on that later in the week after the OCR review.
Lenders have an abundance of money to lend to those that don’t require it but if you are hoping to purchase a property with less than 20% deposit, it is possible [ BUT ] you will need to cross the t’s and dot the i’s and prove beyond doubt why you are worthy.
Brian Dalley is highly experienced in dealing with banks as well as independent home loan lenders. He can cut out the stress and get the best deal for his client. Would you like that to be you? Email brian@propertyprofit.co.nz for free advice on your particular situation then sit back and relax.
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