There has been so much talk in the media about the recent Royal Commission and what is happening with borrowing money right now. The most frequently asked question that I get is “Have the banks cracked down on lending”.
Well the answer is no they haven’t cracked down on lending money, the policies that bring them to a decision to lend money, i.e. provide credit, have not changed dramatically over the last 12 months. If your financial position (your income and equity) was good enough to get you a loan last year, it is still good enough to get you a loan this year. That’s not to say the loan application process has not got harder, it has. What has changed and what the lenders are focusing on is making sure that you, as a borrower, are fully aware of your current living expenditure and obligations to ensure you can afford a new loan commitment. From now on every time you apply for a loan you will need to provide a comprehensive break down of what your costs are in relation to what you spend on groceries, electricity, gas, telephone, education, vehicle running, house & car insurance, health insurance, life insurance, entertainment, just to name a few. In many cases you will need to provide your account statements to confirm your spending. Added to that are the changes in credit reporting that means so much more of your loan activity is shared amongst lenders, making it extremely important that your full loan commitments are disclosed as well. With the advent of Afterpay, Zip Pay, interest free credit, etc. things that you might not think of as a traditional loan, your loan application can come unstuck and have your loan declined.
Now more than ever the role of a Mortgage Broker has become crucial. We make sure that we get you fully organised and present your application with the best chance of getting your loan approved first time with the best loan option that best suits your needs.
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Neil McCahon is a Director at Mulcahy & Co Lending and can be contacted on 0412 860 223 or firstname.lastname@example.org For more information about Mulcahy & Co Lending, click here to visit their web page.