Specialist brokers key to maximising finance

Wednesday, 2nd Mar 2016
Categories: Finance, Newsletter

specialist brokerFunding commitments to purchase established investment properties have dropped 20% since tougher lending criteria was introduced earlier last year, highlighting the importance of engaging brokers who specialise in investor loans.

Finance commitments for established investment properties dipped to $9.1 billion in December last year, according to the latest figures from the Australian Bureau of Statistics.

That figure is 20% lower than the most recent peak, which was reached in May last year when finance commitments topped $11.4 billion.

That was the same month the Australian Prudential Regulation Authority (APRA) announced that it would force lenders to apply tougher lending standards and apply a 10% speed limit on growth of investor loans.

The tougher lending standards include changes to acceptable loan-to-value ratios, serviceability requirements, interest-rate buffers, rent allowances and rate adjustments, among others.

The more stringent assessments means investors seeking to obtain loans should engage brokers that specialise in investment finance, or risk being approved a smaller loan than desired or worse, having their loan application rejected altogether.

Since the crackdown on investor loans was unveiled, finance commitments for established investment properties have been steadily declining.

The finance commitments recorded in December last year are now at their lowest point in 2 years, since December 2013.

If you’d like some expert advice on how best to structure your finances, contact us here, we’d be glad to help!