How Hard is it to get loans today

I know very broad question

However, I would really like to hear from MB and investors who have been trying to source finance.

APRA had not helped with servicing criteria changing, but now covid

As a developer its very difficult, I am actually having to use cash, however on completion I can pull cash out.

 

I’m finding it tedious with the wait times. It’s been nearly 8 weeks and still waiting for ANZ to approve $350k construction loan for an investment property. Builder is ready to go, but stuck until ANZ do their thing. Then have to see how long ANZ takes to produce docs. And this is through a broker.

 

We are writing more loans than ever so it can't be too hard

 

I am full doc, PAYG, LVR 50%, no covid impact, the big4 banks were fighting for my business.

but they will say no to my proposal to buy a retail show, even it is cheaper than a studio in Sydney, and it is 1/3 of my IP capacity.

so banks are every selective these days, in terms of the collateral and the borrower.

 

I can only speak for myself.
They are very strict - DTI of 7 - Big 4 banks just cut you off at your knee cap.
Doesn't matter my LVR 50% which is fine.
Means I had to finance it cash.

 

Self employed very hard imo atm as turnover drops will wash through financials for next 2-3 years! Im expecting a lot more variance in how SE's are assessed in 2021 and 2022 when they are looking back at 2020 and 2021's. Might see the rebirth of some sort of hybrid low / alt docs loans via mainstream lenders.

 

If you meet the various metrics lenders have in place, it's no problem. If you're outside of those metrics it's incredibly difficult.

Most of the policy changes have raised the bar on the amount of verification required. A lot of these policy changes will likely be unwound at some future point, but I also thing there's going to be a few things that will never go away.

The only real good news is that the third tier lenders are realising there's a lot of people being left outside the policies of the first and second tier lenders. They're starting to get very competitive in this space. Today under the right conditions, Pepper Money has lower rates than some Big 4 products and they'll lend significantly more with less fuss.

 

Really... wow... FHB market??

 

No, prob had 1 FHB that I can think of

 

MOst brokers I have spoken to have definitely seen numbers in loans drop, particularly in Melbourne. Myself included. So kudos to you

 

We are with Terry. Had to take on 2 Brokers on in our Broking Division to keep pace with the demand.

I accept of course the Homebuilding boost has certainly helped but most of the broking business we do is in Qld so unlike Vic not badly effected.

Cheers


Richard

 

Finance isn't harder per se...but the process to apply for it has become much more pedantic. The requirements around interrogation and verification of living expenses have become much much stricter. The requirements around compliance and best interest duties for brokers have become much stricter . Processing times are taking longer as a result of everyone from the broker to the credit teams looking at everything with extreme scrutiny . COVID has slowed things even further with some lenders overseas operations affected. But even pre COVID, scrutiny of living expenses, blood type, favourite meal, hobby and colour ( joking obviously) had become fairly extreme. But ultimately, for borrowers with the right supporting documents and who pass credit scoring and servicing tests and favourite food tests etc etc, there are plenty of options readily available, at lowest rates ever . For those who have weaker paperwork, take less care with their credit score and manage their money poorly, not so much.

 

The reality is the lending environment is as difficult as ever. Every year criteria changes but there are a multitude of layovers now with COVID policy and it all varies from lender to lender.

As a result I was not at all surprised to see that loans originated by brokers for the quarter to June 2020 were a record high of 57%.

Those in simple / straightforward financial positions are more likely to be able to navigate the environment easier but even still there are a huge variation of basic policies e.g. some lenders shading bonus/OT to 60% vs. others shading to 80% which you wouldn't be across without having your finger on the pulse.

 

or 0% for bonus @ suncorp. So silly for some professions like banking

 

I am applying for finance, once a settlement is done.

The bank is very very happy to lend.

1) Valuers are too slow, they are balming COVID - 2020 virus (just kidding)

Construction finance is not hard as well.

I am going to take full advantage of the cheap money thrown at me.