In a recent article by Charbel Kadib in Mortgage Business titled “Investors bear brunt of Loyalty Tax” According to the Reserve Bank of Australia’s (RBA) latest Lenders Interest Rates data, existing variable rate home loan customers were charged an interest rate over 30 bps higher than new customers over the month of December. Drawing on the research, RBA governor Phillip Lowe encouraged long term mortgage-holders to review their interest rate and refinance to a better deal to capitalise on the competitive dynamic in the market. [1] Looking at the differences found with…

Why do people get turned down for loans? Bank’s home loan lending rules can change Having your loan turned down by your bank can be a reflection of their current credit policy, which can change based on shifts in market conditions. This means when you may have had no issues getting a home loan from your bank in better economic times, but you might be turned down today because it’s a tougher financial climate. Boxes not being ticked They look for regular income – so being self-employed can be an…

All the major banks have a standard set of rules they use to decide if a loan application is acceptable, or not. A ‘non-conforming’ home loan is simply a term used for home loans designed for people that don’t fit those rules. Loans like these can also be called ‘specialist’ or ‘alternative’ loans (alt doc). Non-conforming may not be a common term, but you might be surprised how many Australians have been declined for a home loan because they fall into this category, and why. For example, people who are:…

An alt documentation loan (alt doc) or a low documentation loan (low doc) are mortgages that can be taken out using different sorts of paperwork to the kind needed for a full documentation (full doc) loan. Self-employed borrowers, who can find it difficult to provide standard documentation as proof of their income, often use these sorts of alternative loans. The low down on alt doc loans Once upon a time, a ‘low doc’ loan was just that: a mortgage that could be taken out using less documents to get it….

When you are thinking about your first home, finding out you should be thinking about saving for a 20 per cent deposit can seem really overwhelming. The good news is that for some of the big non-bank lenders like Pepper Money, a minimum deposit required on some products can be as little as five percent of the purchase price of the property, but it’s always a good idea to have a deposit of 20 per cent or more if possible. So let’s look at how to get there. First work…