Banks profits are growing yet they still might say ‘No’
A recent report published in the Sydney Morning Herald* suggested that not only are interest rates likely to continue to rise, but it will be harder than ever for consumers to get a home loan, as some of the nation’s biggest home lenders are expected to slow residential lending growth and turn their attention to the commercial lending sector instead.
The report quotes Martin North, the managing consulting director of Fujitsu Australia and New Zealand, who predicts that, when considering a customer’s viability for a loan, the banks will scrutinise their circumstances more closely than in recent years, looking at factors such as income, savings history, credit rating and Loan to Value Ratio (LVR). North says “If you’re a first-time buyer who wants 95 per cent, without any savings history, you’re going to find it very difficult.”
This is an alarming prediction when considering that, in the wake of the global financial crisis, banks now hold more than a 90 per cent share of the mortgage market. What this basically means is that things are going to get tighter and the banks are picking and choosing who’ll they’ll help. Fortunately for you there are some real and credible alternatives to the banks, offering a broad spectrum of home loan products for just about anyone. Not only that but the rates on offer by some may come as a surprise with variable rates starting at just 6.55%, which is lower than the standard variable rate of the big four banks.**
We also understand that you may have experienced adverse financial circumstances from time to time; we are able to take these circumstances into account and, in most cases, can provide a finance solution that will suit their needs.
To find out more about our range of home loans, or if you would like to discuss your personal scenario with us, please contact us.
*Original article, ‘Banks turn loan shy,’ published in the Sydney Morning Herald, 21 April 2010.
**Source: Canstar Cannex rate comparison service as at 27 April 2010, on standard variable rates for owner-occupied mortgages.
I agree with your post above…I am one of the people who have faced this problem.