Why your loan approval may not be worth the paper it is written on.

Over the past years the banks, prompted by regulators and the Royal Commission, have made it more difficult to get an investment loan. So, you may want to seek a second opinion on whether your loan approval still stands.

Here is what has happened.
Prompted by historic pressure from the Australian Prudential Regulatory Authority (APRA) to limit property investment growth to 10 per cent per annum, the banks have announced new lending policies which will make it tougher for investors to source a property loan.

All banks have announced different policies, but here are some examples of what has happened

• Westpac only takes into account 60 per cent of rental income when assessing an some applicant’s income
• NAB no longer discounts interest rates for investors
• Bankwest now only lends up to 80 per cent of the value of an investment property (was 95 per cent)
• AMP no longer accepts all of rental income when assessing an applicant’s income
• Macquarie Bank has introduced tougher lending standards

What it Means

If you are currently looking to buy an investment property and (believe) you are armed with a bank pre-approval, it may no longer be valid.

What Should You Do

Things are changing almost weekly so it’s important to have a trusted expert in your corner. Please contact me to double check if the changes affect you.