Good News for Home Loan Applications!
Everyone knows banks and lenders have a criteria that prospective clients must pass before being granted a loan or mortgage, but what not many of us know is when this criteria changes and what that can mean for future applicants or some of us who have been knocked back in the past.
While they still require you to submit your spending history, income, savings plan and all the usual personal information, borrowing could become a little easier after the Australian Prudential Regulation Authority (APRA) announced it would immediately relax the restrictions on the ‘Stress Test’ for future applicants.
The ‘Stress Test’ is the application assessment banks and lenders use to see if in any unlikely events you will still be capable of repaying your mortgage, and this test has always been set at 7% or even 7.25% interest rate a much higher percentage of interest rate than the one you are applying for now.
While this reduces the risk involved by the bank or lender, being denied is not the results we want to hear when trying to reach our own slice of the Great Australian Dream by owning our home.
With this positive change to the criteria, the ‘Stress Test’ level has been dropped and now means lenders and banks can set their own assessment percentage and it could be as little as just 2.5% above the actual interest rate.
This means loans will be more serviceable right from the start and if you have been denied a loan on these grounds previously it is definitely worth another shot now.
This could be the break you have been waiting for to achieve your own home owning dreams!
If you would like a confidential chat with our trusted Mortgage Broker, just give me a call or send an email to organise this.