Some recent softening on home loan criteria is good news for buyers
In addition to low interest rates there is some additional good news for home buyers says Mortgage Express CEO Andrew L’Almont.
“Encouragingly, particularly for first-home buyers, lenders are starting to soften their stance on the criteria needed to get a home loan,” he says.
“In fact two of the major banks and a second-tier lender have in recent days announced that they are now prepared to lend up to 95% loan-to-value ratio to first-home buyers and others with good, stable employment and unimpaired credit history."
“This is an opportunity that has not been available for the last two years,” he says.
Home loan affordability criteria has also been softened according to Mr L’Almont, with house prices being either stable or marginally cheaper than previously and interest rates looking likely to remain low for a while yet based on the Reserve Bank’s Official Cash Rate forecasts.
This suits a marketplace that has seen a considerable shift from homeowners fixing their rates to staying flexible on a floating rate, Mr L’Almonts says.
“People are getting more educated about what's available to them and not just fixing because the bank said so,” he says, “as evidenced by Reserve Bank data which shows the value of mortgages on floating rates looks set to reach its highest level since the bank’s records began."
“Despite the availability of attractive two-year fixed rates in September there was $67 billion of mortgage debt on floating rates, compared to $37 billion a year ago - an 81% increase on 12 months ago and a 220% jump since September 2008!”
Mr. L’Almont says he thinks there has never been a better time to buy property.
“With more money in everyone’s pocket courtesy of the tax cuts in October, easing lending criteria and what many are saying is a ‘buyer’s market’ the option of buying real estate as a good long-term investment is looking like an excellent choice right now.”