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  • Posted on : 5 Sep 2018

The Dot Monthly
4th Edition

Hope everyone has had an enjoyable couple of weeks since the last blog. This edition pays particular attention to why home loan Approvals are falling. Given the scrutiny faced around the finance industry by the Royal commission and APRA tightening the belt on lending, this was inevitable.

The things that are being brought to attention are:

1. Investment loans in the regulators sights and Approvals are dwindling.
Credit policies have tightened alluding to a lower level of approvals compared to last year. APRA have recently lifted the volume restrictions for investment lending however, they haven’t removed the volume restrictions for interest-only lending, which is a favourite structure for investors.

2. Lending criteria changes and restrictions.
The royal commission has seen the banks take a proactive approach to constrict their lending policies even further. With so much attention on this, credit policies have changed drastically in hope the banks do not get pulled up by the commission for any wrong doing or misconduct.

3. Online lenders and comparison sites are peppered with inexperienced lending advisors.
The growth of the online lending market is downplaying just how difficult it is to get a home loan approval without the right advice and experience behind the consumer. These quick, inexperienced options are targeting first home buyers by proclaiming to be an ‘easy’ solution, but the reality is, most of these online companies blatantly recruit lending “experts” with no previous lending or finance experience. The outcome may well result in a higher number of declined applications.

4. Borrower’s living expenses under more scrutiny.
Banks are demanding much more information to prove and justify monthly living expenses. Gone are the days where a family of 4 were paying $1000 to live! This is a good initiative as it empowers both the bank and the borrower to pay close attention to a realistic measure of monthly household expenditure. with credit history and data becoming more widely available, borrowers need to consider how their bank statements reflect their true living expenses.

What has Dot been up to this Month?
Continuing with our momentum, we have established our ongoing marketing campaign – the 15 year itch. It’s all about the feeling of having your loan paid off in 15 years or less. Just take a moment to envision that! What a feeling, the excitement to know that your next mortgage repayment will be going towards an extended holiday or a new recreational purchase…. GOOD Times indeed!
There will be more on this as we continue with our monthly blogs. You can access our Ebook on the website under the 15 year itch.

As always, we hope you enjoyed reading the blog and should you have any questions, please feel free to email Connecting@dotfinancial.com.au or you can call us on 1300 000 DOT (368).

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