“Crack down on investor lending.” We see this a lot in the news. These crackdowns are often the result of regulatory pressure on lenders. But what does it really mean for people who want an investment loan?
What it means for the average investor
Recent lender changes to investment loans are to do with how lenders calculate your income and expenses. If you’re an investor, you’re probably use to having to prove that you can afford your mortgage repayments. You’d also expect to have to prove your income and expenses.
Now however, some lenders are asking for more. These lenders are now requiring that you prove that you can afford to pay a buffer, plus your actual repayments.
Imagine you have an investment loan with a 4.5% interest rate. With these new changes, many lenders want you to prove you can afford a 7.5% interest rate.
As you can imagine, this really reduces your borrowing capacity. Many people don’t know if they can still refinance or get a new investment property.
So what are my options if I need an investment loan?
While these changes are concerning, there’s no need to panic just yet. If you want an investment loan, there are options available.
With a panel over 30 lenders, Bee Finance Savvy has access to lenders who have simpler rules. These lenders calculate your borrowing capacity using a little more common sense. When borrowing 80% or less, they’ll assess your ability to make monthly repayments based on the real interest rate you’re paying, with no buffer.
So if you want to refinance an investment loan, or you’re an investor looking to make new purchase, call us!
You can call our Sutherland Shire broker Desiree, on 1300 140 554 or 0455 131 937. You can also email her at firstname.lastname@example.org . Desiree will provide you with a free consult to discuss your situation and your options.
At Bee Finance Savvy, we never put in an application unless we’re confident it will be successful. This avoids our customers getting unnecessary marks on their credit file. Too many credit file marks can damage your chance of approval.
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