Borrowers could have better odds


The biggest changes to lending in Australia are being debated right now, and the winner could very well be first home buyers.

It’s all come about because the treasurer says lenders have become too conservative, and he wants them to loosen up. 

Today, under the current laws, lenders are required to conduct rigorous risk assessments when a buyer seeks a loan. These laws were, in short, a response to the global financial crisis. And effectively, those laws make the bank responsible for the decision to lend to you. These proposed new laws will put the ball in the borrower’s court.

Aspiring homeowners can have every bit of their spending analysed. Not that it is such a bad thing - we are talking about hundreds of thousands of dollars and it’s important you can handle the debt. But, the government is looking to make a change. What will it mean for you?

Making the borrower responsible = easier to get a loan.
Banks will still do their own assessment of borrowers but they won’t have to account for the intentions of the borrower and their capacity. Don't let that scare you though. As a broker, I work in your best interests and will help find a loan that works for your situation. Loan Market have access to over 60 lenders, so there are lots of options to consider.

You’ll be in charge of the information = you’re responsible.
Going forward, if the changes go ahead, lenders will be able to base their assessments on the info you choose to provide. This is where having me on your side will be crucial. I’ll assess your situation to ensure you’re confident with the amount you’re going to borrow so that you can borrow with confidence. After all, We don’t want you drawing in debt you can’t handle. 

Less scrutiny on your spending = streamlined assessment. 
The existing expectation of fine-tooth-comb-level scrutiny takes time and has proven to be a tedious obstacle on occasions. Does your lender really need to know about your morning coffee consumption and Netflix addiction? 

With the government seeking to simplify the credit process, borrowers will (in theory) get more timely access to credit with less of the back and forth on paperwork.

The earliest this will all come into effect is March next year. Questions? I bet. Give me a bell anytime, I’m available via phone, text or Zoom.




Disclaimer: This document has been created by Loan Market Pty Ltd (ABN 89 105 230 019, Australian Credit Licence number 390222). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter.You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs. Information included has been sourced from third parties and has not been independently verified. Accordingly, Loan Market Pty Ltd is not in any way responsible for nor provides any warranty express or implied as to its accuracy or relevance.