With the Royal Commission taking it’s toll on the overall lending confidence in Australia, as Mortgage Brokers we have faced further scrutiny to ensure income and expenses are factored as part of the loan application. However, common sense often doesn’t prevail and can cause delays. Here is a recent example of a the type of scrutiny customers are facing where discretion should be applied:
“There was a client at my desk… he’s got a really good income, but he’s a deliberate conscious saver. He lives off the grid; he’s got solar power; he’s got a water tank, permaculture garden; he home-schools his kids, cycles to work. He really deliberately spends so very little money. He owns his home outright and he wants to buy multiple investment properties. Because he’s got such a strong income, the living expenses that will be arbitrarily applied to him under the new lending standards means he will run out of capacity before he is able to achieve his aims.”
While the final banking royal commission report proved to be a significant blow to the broking industry, with commissioner Kenneth Hayne’s recommendation to ban lender-paid commissions presenting a threat to the livelihood of brokers, the silver lining is that customers are increasingly turning to brokers like us for guidance. The majority of the customer leads that we received were better placed with non-major lenders as a result of what has occurred. We need to keep the competition there and brokers are critical to ensuring that it remains a level playing field for lenders and customers win.
As brokers when you decide on buying a home we ensure that your financial health is in check. Taking out a loan is a huge financial commitment, making it necessary for you to secure your finances first. This is one of the first things mortgage brokers can help you with. The added benefit of coming directly to a broker is it improves your chances of getting your home-loan application approved.