RC to make it harder to get mortgage: Finch Financial
The irony of the Royal Commission is that it will make life so much harder for the Australian consumer when they want to get a mortgage, according to independently owned mortgage broking and financial planning group, Finch Financial.
As a result of what it dubbed an “expensive corporate kick in the pants for the Australia's financial services industry,” Finch said there have been immediate, and in some cases quite substantial, changes to mortgage lending policies among the 34 lenders it reviews.
Finch said some of the new rules for borrowers included the need to always get approval in principle from a lender before making an offer when buying a property.
“This is critical as lending policies have become a lot tighter over the last two months,” the firm said in a statement.
Also, if a person is self-employed or a contractor they will need at least two years’ worth of tax returns before tier one lenders would consider lending to them, Finch said.
The firm also said that even if a borrower is a PAYG salary/wage earner, lenders would examine their expenses in a lot more detail than previously.
Lenders are also stress testing loans by using interest rates of over 7 per cent to confirm affordability, Finch said.
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