Changes in the air - ANZ, Westpac et al

Discussion in 'Loans & Mortgage Brokers' started by Corey Batt, 17th Mar, 2016.

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  1. Watson1

    Watson1 Well-Known Member

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    I think ANZ are very good except for pricing.
     
  2. tobe

    tobe Well-Known Member

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    They did reduce their buffer from 2.75 to 2.25, which will offset the reduction in rental income to an extent.
    The real bugger is them now only using 80% of PAYG income other than base income. Using 100% of ot, comm bonuses and allowances was one of their best niches lately.
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    ANZ are my favourite lender for early on clients. They are great with quick vals and acessing equity. Not so good on rates or serviceability at the multiple property stage though.
     
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  4. Corey Batt

    Corey Batt Well-Known Member

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    Their val and equity policy is indeed fantastic - coupled with a few other niches (1 yr financials for self employed clients in LMI, contract of sale vals etc), they filled a good niche to help investors out.
     
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  5. big max

    big max Well-Known Member

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    Presumably if you put down a greater deposit with equity it would still help you with this ratio as the total loan amount would be smaller?
     
  6. Corey Batt

    Corey Batt Well-Known Member

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    Unless the 'equity' is cash - it's still being borrowed, so the same net result.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    If you've got a larger cash deposit, yes you borrow less money.

    If you're borrowing from equity to provide the money, the net result is the same. You're simply borrowing more from the left hand (existing property with equity) and less from the right hand (new purchase).
     
  8. Omnidragon

    Omnidragon Well-Known Member

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    Good policy
     
  9. Azazel

    Azazel Well-Known Member

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  10. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Actually Westpac's servicing has become better and word is they are making further changes to their servicing as their numbers are taking a battering #bringbackdaznegativegearing
     
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  11. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    The problem with the scaled living costs is they are putting in the gross rental income into the mix and not deducting the interest costs. So a married couple on average incomes with a few neutrally geared properties end up in a higher income band than they actually are. Just like APRA want I suppose.

    I they want to take a lower % of rent I am OK with that as long as they also they take neg gearing which was always the reason why they took a high% and don't forget those that self manage
     
  12. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    also read APRA in the press saying they are still not happy with how 2 of the lenders are treating existing debts. If the 2 big ones change this to P&I 7.25% pa over 25 years its going to get tight!!
     
  13. D&J

    D&J Well-Known Member

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    Do you have a link Marty?
     
  14. legallyblonde

    legallyblonde Well-Known Member

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    Damn banks making assumptions. I know they need to be conservative but I feel that they should use someones ACTUAL expenses to measure their outgoings and not make up numbers.
     
  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The trouble with this is how to do you verify actual expenses.
     
  16. D.T.

    D.T. Specialist Property Manager Business Member

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    Bank statements
     
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  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This won't really work because people can get around it by using cash and spending other people's money (parents, spouse etc).
     
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  18. tobe

    tobe Well-Known Member

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    credit card statements and cash receipts.

    I should've trained to be a forensic accountant.
     
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  19. tobe

    tobe Well-Known Member

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    Like genuine savings, people will get coached as to how their finances need to look, and it'll help weed out some people who aren't able to get organised. What it won't help is LIFE.

    Seen many people 3 years into their home loans who also have significant savings? Most people spend what they earn. Most people pay their debts first and spend the rest. APRA is going to find it hard to change that, and LMI providers and lenders are better at modelling who will and wont default and skip town.
     
  20. Kesse

    Kesse Well-Known Member

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    A simplistic but easy way to figure out what actual living expenses are is to see what the savings or cash reserves is going up by each month.

    Example being household income of $10k per month and savings going up by an average of $2k per month. Minus any loan repayments and the remaining figure is the monthly living expenses.

    To add, discretionary spending will get caught up in that but that's what the banks want to see - that the affordability is there before the approval is given rather than the promise that they'll get less take away, stop smoking or spend less if the loan is approved.

    On the flip side though, this is generally what people do. Like Tobe said, they prioritise and pay the loan and other commitments first then spend the rest. Chicken and egg.
     
    Last edited: 21st Mar, 2016