October 1, 2018
Impacts to borrowers
Going directly to your bank for a home loan is not always wise. In the wake of the Royal Commission, banks have tightened policies and built even more ‘buffers’ into borrowing calculations. Some of these buffers refer to interest rates, living expenses, debt vs income, investment loans and the amount of deposit required.
In effect this means that if you were eligible to borrow a certain amount of money to buy a house 12 months ago, it may not be the case now. Refinancing a current loan to another lender is also affected by these buffers.
Currently over 53 per cent of home loans are done through a mortgage broker and this figure is growing rapidly.
The reason for this is that a mortgage broker can take these buffers into account to determine your borrowing capacity and recommend only the banks that will be best suited to you – it’s important to note that the bank that you have been loyal to may not necessarily be on that list.
A mortgage broker will also know how to present your application to the bank for a favourable outcome.