As most of you would be aware, there has been a significant tightening of lending policy from the nations financiers. Media headlines tend to hype the end of the world, but is that really the case?

If a purchaser is keen to secure a property quickly, Murphy’s Law tends to surface and cause delays that in a lot of cases put unnecessary pressure on you and are generally avoidable.

Where should you concentrate your efforts?

Finance pre approval is a must

We strongly encourage purchasers to have this pre-approval in writing before making an offer. If you know your price limits ahead of time, you should be able to obtain indicative approval. Cooling off periods are 5 business days normally. Not having this pre-approval in place means you’ll probably have a week of high pressure to look forward to.

Expect longer formal loan approval

The key to helping you get a timely formal loan approval is to get all the required information and paperwork returned as soon as possible. With the tightening in policy, we are seeing more requests to extend cooling off periods, as financiers dig deeper into the applications.

Have your balance sheet ready to hand over and be prepared to explain EVERY little transaction on your bank account and credit card. We’ve even heard of weekly swimming lessons questioned.

Where’s the surplus

Have you considered setting up a savings account to clearly show where your income surpluses are going? While not compulsory for loan approvals, this kind of transparency can go a long way to proving serviceability.

Unsuitable Property

Yes, it’s rare but it can happen. The property you are interested in may actually be a property your chosen lender has restrictions against.

This could be due to:

· Zoning – the requirement for higher deposits or inability to lend at all.

· Risk level exceeded – the financier may already be too exposed in a certain development (particularly high density)

If you have any questions about your buying or selling situation, contact me via leah@stevensconveyancing.com.au or call 0414 894 031 to discuss.

Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Stevens Conveyancing does not take responsibility for any errors or omissions obtained from the use of this information.