Craig's tip of the month

Z3A0973

Posted 5 days ago by Craig Pope

Don't be distracted by the headlines

A major bank made the news in January for relaxing their lending criteria for first home buyers—meaning more borrowers with a 10 percent deposit could be eligible for a mortgage.

While it appears to be encouraging news for first-home buyers, in reality there has only been a small shift in the amount of new lending available for people with a 10 percent deposit. Banks can now allocate 15 percent of their total lending ability to these applicants—up from 10 per cent. This means 1.5 in every 10 mortgage applications instead of 1 out of every 10.

Lending thresholds are set by the Reserve Bank, and banks are typically conservative and work hard to be well within these limits.

Our advice to first-home buyers remains the same:

  1. Save as much as you can,
  2. Do all of the necessary homework before applying for a loan, and 
  3. Be aware pre-approvals are tricky to obtain, and the final sign off on a loan can depend on the condition and state of the house in question.

 

HomeStart Grants and Welcome Home Loans are still available and a really good option for first home buyers.

Working with a trusted mortgage adviser can help you quickly get past any roadblocks and put you in the best position possible. If buying a house is on your wish list this year, talk to us today on 0800 000 517.

Hey, it seems you"re using a browser that is a little past its time and our website might not be able to perform as it should. If you’d like to have the best experience on our website, you can easily find out about updating your browser here

dismiss this message