Are you entitled to a mortgage?

With a 'good income', savings and no credit card, Renee's bank still knocked her back

Macrobusiness:

 

I'm not sure what the purpose is of mentioning the guy that got declined because he was spending $250/fortnight on takeaway lunch. That shows quite poor money management to me ($25 per lunch) unless he was on a very large income which I doubt - we spend that per fortnight on all food and supermarket items for two adults including an order through Harris Farm which can be above-average in price.

 

What story

"she thought she was in a strong position to refinance her loans"

Having a disposable income doesn't automatically mean you qualify

We all have different idea's of what "we can afford" !

After all, it is still the banks money

(As for the second person spending $250 a fortnight on take away, same as Renee, no actual details in the story)

This is just another example of peoples "entitled" attitudes
I say give her the loan, so we can do a story in 12 months on HOW I LOST EVERYTHING THANKS TO THE BANK, because they shouldn't have lent me the money !!!!

 

And then she will sue the bank for irresponsible lending.

 

The genuine question of "when does personal responsibility end and bank responsibility take over?" really needs to be asked here.

 

I would argue that a bank's only real role to to make a much profit as possible for their shareholders within the constraints of regulation. It's more likely the regulation that stops the banks lending to her, rather than the bank's sense of fiduciary duty.

 

You're not entitled to a mortgage, but should certainly be entitled to access a refinance regardless of shifting lending standard goal posts. If people can't refinance to a better deal elsewhere then there is no competition in the mortgage industry. Nothing to stop banks gouging existing customers.

 

I'd agree. The power to grant mortgages lies with the banks but there's a conflict of interest whereby the mortgagors can't refinance to lower rates/better product so the bank can keep them on a higher rate. This isn't in the interest of the customer nor is it a Firteen consequence of the tightening of qualification conditions.

 

My take from the ABC article is that Renee had a bank loan. She asked them to refinance it.

Why would she want to refinance if she was on a good deal, she would be wanting a better deal for herself. Naturally they said no, why would they want to put her into a new loan with better conditions for the borrower than the loan she was currently in.

 

... and we will have another RC .

 

Due to lending tightening and people becoming trapped it means competition for refinance business is heating up.
We are already seeing some record low rates of 3.5s and increasing cash backs.

I know this doesn’t help those that are trapped but it does create opportunities for those that are not. So their are winners and losers in the situation.

 

Winners: recent immigrants who brought loads of cash from overseas
Losers: local first time buyers who have worked for say 5-10 years and thought they had saved a decent down payment, so want to take advantage of the market downturn, but unfortunately turned down by the banks, watching in frustration as new immigrants snapping up deals.

 

Yes because clearance rates of sub 50% suggest immigrants are snapping up every property...

And FHB actually have not taken a huge hit to servicing. The recent downturn in market has played-out considerably favorable for FHB so unsure what your referring to specifically.

 

Do you know where the overseas immigrants bring their money from? THEY EARN IT AND SAVE IT!!

If someone is complaining that despite earning in Australian dollars and working from an early age, they can’t save for a deposit because an immigrant earning in Rupee at 10 times lower wages who also had to pay for his university education outcompeted them, they are approaching this from an attitude of extreme entitlement based on nothing else but blaming others for poor financial skills.

May be 1% of all immigrants bring money from inheritance or family sources but this ratio would be way higher for locals.

 

Don't worry the buck always ends with the shareholder's picking up the tab..

CBA shareholders footing most of bank's $1.4b customer compensation bill

 

That is what happens when you are s business owner.

 

This was always a concern of mine, and hence why I brought before the conclusion of the royal commision.(the place I brought was a bargain - places have to fall other 15% before the price I paid and market value align)

All I thought was how long before someone that had 20% deposit, a decent job, and supporting a stay at home wife and 2 young children not be able to obtain a loan, and especially as a sole applicant.

 

If you saved for 5/10% and are ready to buy in this market?

Whats wrong Banks are more than happy to give FHOB buyers good size mortgages many i know in this position are buying now with banks being very generous i would have thought.


If you cant get a mortgage now. you dont make enough and never did or didnt save enough. Neither are really banks fault.

 

That may be your experience, but many would-be FHB around me say that:
1) Property prices for the suburbs they want to buy haven't fallen much really, despite what the headlines would suggest (we know how unreliable and utterly useless the median price is).
2) due to tightening lending standards they need much higher income or bigger savings to get a loan.

So, although the competition is certainly less fierce than 2-3 years ago, with their current income and savings they still cannot buy in areas where they want to live. With stagnant wage growth, either prices will have to fall much further or lending standards be loosened before they can get the home they want.