Browse Forums Home Finance 1 Apr 17, 2009 2:41 pm Hi members, just doing a quick poll if any of you (especially first home buyers) has suffered any disadvantage since the tightening of lending policy (for your home loan that was already submitted) and reversal of rate discounting (discounts off standard variable rates) policy in November 2008 and March 2009.
Examples of recent major changes by lenders are; *Removing of discounted (normal) rates as an option to first home Buyers with less than 10% deposit. *Reducing of professional package discounts by 0.2% *Not passing on RBA rate cuts to customers *Increasing Deposit Requirements for a home loan that was already pre-approved *Compulsorily requiring the deposit to be saved over a term even when you have more than 20% deposit *Restricting your borrowing capacity substantially when you re-apply (eg. when pre-approval expires) Re: Bank Changes on Interest Rates & Lending Policy 2Apr 17, 2009 2:51 pm It sounds like all of those examples are from one paticular bank.. I picked yes. Mainly for the reasons that we no longer recieve the discounted rate we were offered when applying for our loan. I'm also annoyed that not only do they not want to give the discount to us, they arnt passing on the full RBA cut. We were lucky enough not to get caught up in the tighter deposit requirements though. Building with PD - Regent 23 Cascades on Clyde Estate HomeOne Building Thread - PCI Completed - 28th August. Handover - 11th September. Re: Bank Changes on Interest Rates & Lending Policy 3Apr 17, 2009 2:58 pm I picked no but the only negative thing was that our bank only passed on a .1 discount after the last RBA rate cut. Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: Bank Changes on Interest Rates & Lending Policy 4Apr 17, 2009 3:00 pm erinleigh It sounds like all of those examples are from one paticular bank.. I picked yes. Mainly for the reasons that we no longer recieve the discounted rate we were offered when applying for our loan. I'm also annoyed that not only do they not want to give the discount to us, they arnt passing on the full RBA cut. We were lucky enough not to get caught up in the tighter deposit requirements though. No, I won't name them but there are many. Re: Bank Changes on Interest Rates & Lending Policy 5Apr 17, 2009 3:43 pm Hels I picked no but the only negative thing was that our bank only passed on a .1 discount after the last RBA rate cut. It's interesting Hels you don't consider that to be disadvantaging you. Re: Bank Changes on Interest Rates & Lending Policy 7Apr 17, 2009 4:07 pm erinleigh It sounds like all of those examples are from one paticular bank.. The examples are from just about every lender I can think of (points 1,3 and 5). OK you got me on point 2 (we've been discussing it) Point 4 is an example from a foreign owned bank (which affected one of my customers) I hope that clarifies. Re: Bank Changes on Interest Rates & Lending Policy 8Apr 17, 2009 5:41 pm thlo Hels I picked no but the only negative thing was that our bank only passed on a .1 discount after the last RBA rate cut. It's interesting Hels you don't consider that to be disadvantaging you. I voted no as well. Disadvantage is a term of relativity. I'd feel disadvantaged in relation to the interest rate cut only if I borrowed with the Nab. Re: Bank Changes on Interest Rates & Lending Policy 9Apr 18, 2009 8:20 am I went with the no vote also. We were probably fortunate that we had the application in the system before all the lending policy changes. Now that we have the lending docs everything that was discussed at the original meeting with the broker is in there eg rate discounts (package) and probably fortunate enough that we could still use our FOHG as a deposit and not have the need to have genuine savings as such. I feel sorry for anyone now that doesn't have the new requirements as it will be alot harder for them. http://buildingatfreeling.blogspot.com/ Building at Freeling Estate Adelaide MKII WE ARE NOW OFFICIALLY FIRST HOME OWNERS AND WE BUILT A NEW HOME FROM SCRATCH Re: Bank Changes on Interest Rates & Lending Policy 10Apr 18, 2009 3:18 pm craigandamy I went with the no vote also. We were probably fortunate that we had the application in the system before all the lending policy changes. Now that we have the lending docs everything that was discussed at the original meeting with the broker is in there eg rate discounts (package) and probably fortunate enough that we could still use our FOHG as a deposit and not have the need to have genuine savings as such. I feel sorry for anyone now that doesn't have the new requirements as it will be alot harder for them. That's why the poll is open ended. Just watch how it changes later as more and more home buyers are caught out. Just read this from Sydney Morning Herald; Jessica Irvine Economics Writer -Sydney Morning Herald Access denied: tougher lending rules Jessica Irvine Economics Writer April 18, 2009 NO-DEPOSIT home loans are officially dead and an increasing number of lenders are insisting borrowers produce "genuine savings" on top of the first-home owners grant to qualify for a loan. Amid concerns about rising joblessness and ravenous demand for loans from first-home buyers, lenders have been quietly emailing mortgage brokers to announce tougher criteria. Copies of this correspondence seen by the Herald show big lenders are tightening the screws in a number of ways: abolishing no-deposit loans; increasing minimum deposit requirements; reintroducing application fees; putting a freeze on pre-approvals for new loans if a property has not yet been found; and checking to see if borrowers could afford 8 per cent interest rates. A growing list of lenders require a minimum deposit of 10 per cent, including ANZ, Commonwealth Bank, AMP Bank, Citibank, HSBC and ING Direct. Westpac and NAB need only 5 per cent, but a Westpac spokesman said this was "under review". Lenders are also cracking down on buyers hoping to use the boosted first-home owners grant - worth up to $24,000 in NSW until June 30 - as their entire deposit. Most big lenders now require proof of "genuine savings" of about 3 or 5 per cent of the loan value, including ANZ, Commonwealth, Westpac, RAMS, Citibank and ING Direct. A list from ANZ tells brokers the following are "unacceptable" forms of saving: government grants, inheritance, gambling proceeds, bonuses and gifts. St George Bank was one of the last to abolish its No Deposit Home Loan on April 9, having advised brokers in an email: "St George … is an advocate for responsible lending and due to current market market conditions, the No Deposit Home Loan … is being withdrawn from sale." On March 23, Citibank sent an email to brokers advising it would no longer grant pre-approved loans to borrowers who had yet to find a property. It also reintroduced a $399 application fee on Basic Mortgages. On Tuesday AMP Bank increased its minimum deposit to 10 per cent, advising brokers this was "due to an unsettled economic climate and an increase in unemployment levels". Re: Bank Changes on Interest Rates & Lending Policy 11Apr 18, 2009 8:24 pm I would feel disadvantaged too if my bank didn't pass on any rate cut. Plus we just got a .7% discount that our branch got for us, even though we didn't borrow the required amount. I gotta be happy with that Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: Bank Changes on Interest Rates & Lending Policy 12Apr 19, 2009 5:39 pm I tell you what, if the CBA changes things, then I'm going to be right angry. I've already got pre-approval from them for the loan, but if they change some of the criteria retrospectively, then I'm going to be out of pocket for the deposit I've already paid to the builder for the soil and wind test at least, plus the plan fees. The deposit for the land we could get back on the finance clause at least. I have spent far too much of my time sorting stuff out for this damn house, I'll be buggered if I'm going to let it all slip away now. west sydney mortgage broker 13Apr 20, 2009 3:20 am digamma I tell you what, if the CBA changes things, then I'm going to be right angry. I've already got pre-approval from them for the loan, but if they change some of the criteria retrospectively, then I'm going to be out of pocket for the deposit I've already paid to the builder for the soil and wind test at least, plus the plan fees. The deposit for the land we could get back on the finance clause at least. I have spent far too much of my time sorting stuff out for this damn house, I'll be buggered if I'm going to let it all slip away now. I have been bringing these issue to the attention of fellow members for a while now and it seems the media started paying attention to the same issues and their impact on borrowers with the front page story on Saturday's Sydney Morning Herald. There are certain conditions on pre approvals which may give justification for subjecting your original application to new and harsher policy, therefore living you out in the cold. I hope you're not put into that position digamma. I have certainly seen some of my clients' pre approved applications face this treatment by lenders recently. It is frustrating because we then have to do the same application again with a new lender if the pre approved loan is rendered impossible due to the bank changes. Re: Losing Out due to Bank Lending Policy Changes? 15May 28, 2009 1:47 pm Let's hope not! That would put first home buyers out of the market for years. Re: Losing Out due to Bank Lending Policy Changes? 16May 28, 2009 7:07 pm I have also voted no - I would not have gone ahead with such a project if I did not have my own finances (savings) to support my application. The grant is a bonus, but certainly my loan did not depend on it. I think the only aspect of the poll that would effect me - as per everybody maybe?- would be not passing on the entire RBA cuts. JL home loan advice 17Jun 02, 2009 4:07 pm I don't think borrowers have fully grasped the major lending policy changes yet. I am still constantly getting No Deposit home loan inquiries. Re: Losing Out due to Bank Lending Policy Changes? 18Jun 03, 2009 5:54 pm Hi Thlo - we are not first home buyers but will be borrowing 95% for construction which we were pre-approved for last September (we lost over $50k on our last house - hence the low deposit). As we already have a 95% mortgage with CBA, I was concerned with the changes to deposit amounts. My mortgage broker says that we should be ok and that we will still be able to borrow 95%. What do you think? Your comments will be greatly appreciated (my mortgage broker is relatively dim ). sydney mortgage broker 19Jun 04, 2009 1:35 am Elzbeth Hi Thlo - we are not first home buyers but will be borrowing 95% for construction which we were pre-approved for last September (we lost over $50k on our last house - hence the low deposit). As we already have a 95% mortgage with CBA, I was concerned with the changes to deposit amounts. My mortgage broker says that we should be ok and that we will still be able to borrow 95%. What do you think? Your comments will be greatly appreciated (my mortgage broker is relatively dim ). From my experience, they honour pre approvals even when policy changes (I can't say the same for many other lenders) if your financial circumstances don't change and rates don't go up etc. etc. Current policy allows maximum 95% for existing CBA customers who hold a CBA Consumer Finance Product - for at least 6 months with good conduct. Eligibility for a home loan depends on many variables and an experienced mortgage broker can pre-qualify you after going through your circumstances. As a mortgage broker, I can only say if you should be OK with 95% after a consultation but on the face of it the fact that you are a current loan customer with them should ease your concern. Re: Losing Out due to Bank Lending Policy Changes? 20Jun 04, 2009 7:40 am Thanks thlo, your reassurance is certainly helpful. We have remained on the same income and continued to making savings contribution. The interest rate has obviously dropped considerably since last September, so that isn't an issue. Let's hope we can just get this contract processed before the policy changes again! Now its just the getting thhrough the valuation! Good luck everyone! I engaged my builder in December last year and we’ve been working on preliminary drawings for last couple of months. I got a call from the salesperson this morning… 0 571 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11933 4 14302 |