FACT AND FICTION – LENDING

1. Pre-approvals appear on your credit file. Historically, they did not show success/fail (and became a negative indicator). Today, success is shown. Multiple successful pre-approvals are unlikely to effect borrowing

2. All negative applications effect borrowing

3. Applications for borrowing show the reason for the inquiry on the credit file

4. Applying for a pre-approval includes bank statements, 100 points of ID, income and asset details, and evidence of savings in return for an estimated borrowing limit to purchase a property

5. pre-approval is only an indication that a lender is willing to loan you an amount of money for a property purchase based on its assessment of your financial position. The lender is not obligated to formally approve the loan application.

6. Most lenders prefer that you have one or two enquiries in a six-month period. Any more than this may be grounds to reject your home loan application

7. credit enquiries remain on your file for five years from the date you lodged the enquiry.

TOUGH LENDING CONTINUES TO IMPACT MARKET

– Capital cities down, regional up
– Lending still tough, banks still seeking more clients under APRA’s rules
– Variable likely to go up across all lenders

AMP, Bank of Queensland, IMB and Auswide, Suncorp, ME Bank and Pepper Group all made changes to the variable rates earlier this week.

Macquarie is making changes, customers will see rises from 13 July.

Its likely the big four will follow later this week.

Despite the above, all major banks are ‘seeking’ business more than ever under the tough APRA rules.

CoreLogic research director Tim Lawless, ‘”Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018, despite APRA’s 10 per cent investment speed limit being lifted this month.”

Australian dwelling values fell for the ninth consecutive month in June, taking national dwelling values 1.3% below their September 2017 peak.

National dwelling values remain 32.4% higher than five years ago.

The largest decline amongst the capitals over the June quarter was in Melbourne, with dwelling values down 1.4%, followed by Sydney (-0.9%), Darwin (-0.8%) and Perth (-0.7%).

Capital city decline was partially offset by a 0.6% rise in values across the combined regional markets.

Takeaways
1. its becoming a buyers market for both finance and homes
2. serviceability is more important than ever, lending conditions do not look like they will become ‘easier’

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