Fear, Royal commission, oversupply and APRA. But in summary it all comes down to the change in bank policy- when buyers find it harder to obtain a loan, it naturally kills off demand...the one left standing are the one with good borrowing power = Opportunistic market.  

 

 

Previously lenders were heavily focus on income ( Prior to Dec 2017). Fast forward 4-8 month; lender are now more focus on ( In order of importance)

 

1. Income - Dont get me wrong, income is still an important factor.

 

2. Personalized Living expense - your spending habits, pattern and cash flow.

 

3. Debt level - How much debt you currently hold. Current home loans will be assessed on its cash flow if the rate goes up 3% (min 7.25%) with Principle and interest repayment.

 

4. Personal debt - Afterpay, Zippay, Credit card limits, personal loans, Short term loans and interest free shopping loans.

 

 

5. The type of property you are buying and location - Is it located in a high dense area, is it off the plan, how many units are there in the complex, is it effected by noise ( Train, main road etc..)

 

6. Credit file - Having a clean and not so active credit file is the key to straight forward approval. Since July 2018 most banks moved to the new "comprehensive credit reporting" which is a new system which checks not only your credit but your debits accounts and your repayment history. Summary banks have a lot more data on your than ever before!

 

 

7. Deposit requirements- Min 5-8% for most owners and 8-10% for investors.

 

 

FUN FACT: Having an afterpay repayment of $100 per fortnight ( $400 purchase, 4 repayments) will reduce your home loan borrowing capacity by as much as $29,000- $55,000  depending on the lender ( All for a $400 purchase)

Having an $20,000 credit card limit - reduces your borrowing capacity by $80,000 to $110,000.