Lender Policy Changes During Lockdown 2020

Discussion in 'Loans & Mortgage Brokers' started by Property Twins, 6th Apr, 2020.

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  1. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

    Joined:
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    We're going to progressively see lenders coming out with policy changes around not just the industry of employment (e.g. tourism, hospitality, aviation)...

    Borrowing Capacity - with Over Time / Bonuses / Allowances
    But also around how they take overtime, bonuses, allowances. Policy to be officially released (and only discussed with one of the bank BDM's) suggests the lender(s) will be shading overtime, bonuses, allowances a FURTHER 20%.

    So if you have $20k in overtime, this was shaded to $16k for servicebility purposes. Expect this to be shaded further down and $12.8k being used for servicibility assessments.

    It makes sense - in many industries (barring the front line workers) there will be lesser overtime and potentially less-er bonuses.

    So borrowing is about to get TIGHTER again for some.

    Also what remains to be seen is how banks will take the JobKeeper payments (unlikely to take this for serviceability).

    Lender Risk Policies & Living Expenses
    Initial feedback suggests that the banks are STILL reviewing their risk policies and if they will adjust living expenses where "discretionary" spend was high and is now gone...

    Lenders Mortgage Insurance
    QBE have already suggested they have put an embargo on not insuring loans with those in the greatly affected industries..

    Yet to see how the bigger banks will react to this - where there is internal Delegated Underwriting Authority)

    Will be good to track these changes and how various lenders are reacting.

    Expect these to be in line with lender appetite and their exposure to certain LVR's, professions etc.
     
    Karlos1234 likes this.