Depending on your home loan needs and property purchase goals, we have the solution for you!
If you are seeking a loan for:
- your first home
- an investment property loan
- upsizing or downsizing
- looking to refinance for a better rate
- need to extract equity for personal or construction use
- consolidate debt or apply for a construction loan
Fordable can assist with these finance requirements.
What if my circumstances are unique?
There are a range of lenders with different policy and different niches. For example, the big four banks are quite flexible with policy but may not have the most competitive rates. The second tier lenders have tighter policy but offer more competitive rates. Then you have your third tier specialist lenders who will take on much more risk and charge higher rates for that service.
Understanding your circumstances and situation will assist the Mortgage Broker find the most suitable lender whose policy will accept your application. It's important to realise that low interest rates are not always available for every application as the personal circumstances of the applicants will dictate which lender products are suitable.
What’s happening with interest rates?
Currently, the market for owner occupier home loans with principal and interest rates are generally lower than other interest rates for other loan purposes (e.g. investment loans). In general, principal and interest rates are better than interest only rates and owner occupied rates are better than investment rates.
The variance on interest rates across the different products is partly due to the Royal Commission in 2018 where the regulators (APRA and ASIC) played a huge role in the rapidly changing finance environment. One large influence the regulators had was they determined the property market growth rate needed to slow down and the total national debt was too high. So they placed restrictions on lenders interest only portion of their total loans to reduce investors buying and to reduce the principle component of loans. To achieve this, some lenders had to stop all interest only home loans and some lenders increased the interest rate to deter applications. This is a very simplistic high level overview of what's happening with the Royal Commission.
In addition to the changes which came about from the Royal Commission, the borrowing capacity for applicants tightened with the lenders increasing buffers around servicing, policy, living expenses and assessment rates.
Regardless of the above, it hasn’t stopped people from successfully applying for home loans, if anything it’s improved the process as responsible lending practices are the highest priority which means loans are approved for people who can afford it.
Has applying for a home loan changed?
The home loan application process itself hasn’t changed much however lenders now assess applications more stringently. They are pulling apart bank statements and credit card transactions to ensure due diligence on all transactions occurs as part of their audit practices.
If you are thinking of buying a property, then it’s essential you get the best guidance from a Mortgage Broker about the current market and best practice for the process. For example, we recommend that buyers seek pre-approval for finance before they start to negotiate on a property. Seems logical to most however we see a lot of people coming to us who have negotiated on a property, had an offer accepted and do not have finance approved. What does this mean? The broker normally has very little time to work on an application, the lender is pushed to assess and approve an application (currently impossible to get lenders to hurry up), the client is stressed after realising they may not get the finance they require before cooling off expires and it all becomes a big headache. For more information about the pre-approval process, click here.
Once you find the property you want to buy, knowing the best way to negotiate and the process to follow for the purchase is going to ensure you have the best outcome possible. We have buyers agents who can represent you and do all the negotiations, or represent you at auction.
With your pre-approval in place, if you successfully negotiate or purchase the property at auction, you will need to get a property valuation done and generally a few other requirements before the lender will confirm formal (or unconditional) approval.
This is the general process of applying for finance for all residential home loans whether it be a loan for an investment property or owner occupied property. Refinance loans are a little more simple as you do not have the buying process involved, however the application process is the same.
To submit an enquiry and discuss your finance needs with our team, please complete our contact us form and a representative will be in contact with you shortly.Apply for Property Finance