You're spot on if you think the goalposts keep moving when it comes to getting a home loan. Here is a breakdown of some of the recent changes.
Lenders have been shifting interest rates and varying their lending policies with increasing regularity in recent months. To make matters worse, the changes are not consistent across the board, making it even harder to tell what’s what. The result is arguably more confusion than ever in a market where it’s already difficult to compare apples with apples.
Take interest rates, for example. You don’t have to look far to find a bank that has shifted its interest rates outside of the official Reserve Bank cash rate movements.
What’s more, banks all too often have different interest rates for different products in different market segments. It’s confusing and makes it difficult to weigh up one against the other.
When it comes to lending policies, one of the most visible changes is the amount of deposit that’s now required. Deposit requirement amounts for owner-occupier homes still vary from lender to lender, but remains one of the easier things to spot when you’re comparing one with another. However, there have also been some major changes recently to investment lending, with many lenders altering the products they offer. We’ve not seen the likes of these changes for many years, with differing interest rates and differences in the amount of deposit an investor is required to provide causing confusion in the market.
Regardless of the type of loan, there are other policy changes that can be much more difficult to evaluate. That’s because they are often implemented by lenders changing their automated credit-scoring models. These models essentially offer a computer-based loan assessment process that takes into account multiple variables.
The result? It’s extremely difficult to tell at face value whether your circumstances still fit the bill. Not only that, but the ‘invisible’ policy change can affect your borrowing capacity quite dramatically, not just your eligibility for the loan.
The upshot is that today, more than ever, a mortgage broker can be your best friend in the hunt for the right home loan. Think of your broker as your secret weapon to help you cut through all the clutter and noise that exists in the market at the moment. With the support of a mortgage broker you can accurately compare loans according to their features and benefits, as well as the interest rates on offer and the amount you can you borrow.
The figures speak for themselves, with more than 50 per cent of people seeking a home loan using the services of a mortgage broker. I fully expect the number to keep growing, especially given the ever-changing lending environment at the moment.
When the market is tricky to navigate, turning to a mortgage broker for help can give you access to options you may well not have had the time, inclination or contacts to investigate. Whether you’re an eager first home buyer, seasoned purchaser or a savvy investor, they’ll help you cut to the chase, finding a home loan that is perfect for your individual circumstances.
While there’s every chance lenders will keep moving the goalposts, at least for the time being, would-be home buyers and investors shouldn't be concerned. Now, more than ever, there are plenty of opportunities to set yourself up with a fantastic home loan product. With a mortgage broker on board to do the searching and assessing for you, you can be sure you’re tracking down every last benefit and making sure your home loan is the perfect fit for you and your circumstances.
Don Crellin is the Managing Director of Resolve Finance, an award-winning mortgage brokerage and leader in the home finance field. Resolve Finance is part of the Alcock Brown-Neaves (ABN) Group and, on average, help over 200 homebuyers into their home each month; financing over 23,000 homes since establishment in 1997.
Don brings a wealth of knowledge and experience to the company having over 25 years in the mortgage industry, spanning across Australia and New Zealand.