Christopher Joye: You should be long housing right now, but beware regulatory risks; Aussie house price growth is accelerating, 8% annualised rate, way above wages growth
Another good month for AFG without FTB's. Other states were also very strong for investors.
------------------------ Hi peter,
Interesting data - thanks for posting.
A question for you.
Do you think FHB's are struggling to get into the market because the banks have become tougher on credit? The reason I ask is a friend of mine is trying to refinance their house ATM, and is finding it very difficult. They only have a 20% LVR, but the bank wants 3 years of tax returns, financial projections and a very detailed stament of financial position.
The Bank (NAB) basically said to him, "LVR's do not matter - APRA want cash cover". NAB is doing their credit work on +8% interest rates and making assesments only on the basis you can meet all financial payaments assuming you are out of work for 12 months.
Do you think FHB's are struggling to get into the market because the banks have become tougher on credit? The reason I ask is a friend of mine is trying to refinance their house ATM, and is finding it very difficult. They only have a 20% LVR, but the bank wants 3 years of tax returns, financial projections and a very detailed stament of financial position.
The Bank (NAB) basically said to him, "LVR's do not matter - APRA want cash cover". NAB is doing their credit work on +8% interest rates and making assesments only on the basis you can meet all financial payaments assuming you are out of work for 12 months.
What are you hearing?
Both my brother and I had loan applications go through NAB in March without anything like this. I was only changing from variable to fixed, but my brother also had an increase in the credit extended. My brother is a lawyer and law firms in general are struggling quite badly in Brisbane at the moment, so I would have expected his application would have received scrutiny. Maybe this is a new thing?
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Do you think FHB's are struggling to get into the market because the banks have become tougher on credit?
Lenders are strict with high LVR loans, but not so much with anything under 80%, but it does have to service.
Quote:
The reason I ask is a friend of mine is trying to refinance their house ATM, and is finding it very difficult. They only have a 20% LVR, but the bank wants 3 years of tax returns, financial projections and a very detailed stament of financial position.
That sounds as though he is self employed - that gets harder. Tell him that the ANZ only requires the last years financial statements (12 months up to 30/06/2012 will do at the moment) but if that doesn't do it for him he may need to use a low doc facility.
Quote:
The Bank (NAB) basically said to him, "LVR's do not matter - APRA want cash cover". NAB is doing their credit work on +8% interest rates and making assesments only on the basis you can meet all financial payaments assuming you are out of work for 12 months.
Sort of - all loans must service in the consumer channel, asset lending is pretty much gone except for business people who are looking for startup finance or expansion. He may have to look outside the consumer channel if he is self employed. For anyone who is on wages they are very much constrained by the need to prove capacity to service the loan.
APRA has stated that banks must prove that the loan can be serviced, and there are several small variations in method and interpretation of that direction. Sometimes those small differences count in a big way.
Quote:
What are you hearing?
It's actually getting slightly easier, but by no means easy. Any loan that has merit has a good chance. I suspect your friend is going to the wrong channel for his scenario. As I mentioned before, my guess is that he is self employed and doesn't have his 2011 and 2012 tax figures that prove his capacity to service. There is also a possibility that he hasn't told you some home truths that might affect his chances.
PM me the scenario and I'll tell you where to steer him.
Any expressed market opinion is my own and is not to be taken as financial advice
It's actually getting slightly easier, but by no means easy. Any loan that has merit has a good chance. I suspect your friend is going to the wrong channel for his scenario. As I mentioned before, my guess is that he is self employed and doesn't have his 2011 and 2012 tax figures that prove his capacity to service. There is also a possibility that he hasn't told you some home truths that might affect his chances.
PM me the scenario and I'll tell you where to steer him.
Thanks Peter.
He is a Barrister - so I guess he does fall into the "self employed" catagory. FWIW, I think he will get his new facility. I thought it could explain why investors are dominating the market ATM.
It's actually getting slightly easier, but by no means easy. Any loan that has merit has a good chance. I suspect your friend is going to the wrong channel for his scenario. As I mentioned before, my guess is that he is self employed and doesn't have his 2011 and 2012 tax figures that prove his capacity to service. There is also a possibility that he hasn't told you some home truths that might affect his chances.
PM me the scenario and I'll tell you where to steer him.
Thanks Peter.
He is a Barrister - so I guess he does fall into the "self employed" catagory. FWIW, I think he will get his new facility. I thought it could explain why investors are dominating the market ATM.
Yes he is self employed. A number of Barristers and Lawyers have been struggling financially lately. A number of them have run foul of the ATO and banks generally hate financing ATO debts - banks view failure to provide for taxation as poor management - but Citibank will look at it.
Any expressed market opinion is my own and is not to be taken as financial advice
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