Mortgages aren’t for the faint-hearted. The days of banks approving mortgages at lightning-speed are gone, and the market is more complex.
The additional LVR restrictions brought in late last year means banks are having to take greater responsibility for who they lend to and how much – making them more cautious about saying yes.
It’s even more important that buyers make good decisions. We’ve seen people make major financial commitments, like going unconditional on an offer, based only on verbal assurance from their bank. Banks have then declined these applications once all the information is put in front of them. The stressed buyers at the last minute have had to provide further information or valuations to get across the line.
Self-employed people need to be more prepared, and keep up-to-date financial records if they want to secure a mortgage through the bank, and avoid using a non-bank lender with usually higher interest rates.
Applying for or renewing your mortgage with your bank can throw up some unexpected issues – most people think their existing bank is the best option, but they can end up spending a lot of time and getting nowhere. Banks can vary greatly on unadvertised rates, credit criteria and how much they lend you. Some, at any given time, may not have high LVR lending available to give you.
Consider seeking impartial advice from a mortgage adviser or broker. It’s their job to know all the possible pitfalls, each bank's strengths, and each bank's weaknesses. They also know what’s really happening in the market, the lending criteria and what products are available to suit you. It also doesn’t hurt to have some help when it comes to negotiating favourable terms.
While today's market might be more complex, the same basic rules apply if you’re a buyer – do your homework, get in the best position possible, and talk to the experts.
Contact us to help you navigate the mortgage market.