Effective 26 April 2009 the Bank is making the following Credit Policy changes:
MAXIMUM LVR
• Maximum LVR of 92% for new customers to the Bank
• Maximum LVR of 97% for existing customers of the Bank Existing CustomerAIPS must be made formal by that date
SERVICEABILITY
• The monthly interest rate buffer, used to assist in serviceability calculations, has increased to from 0.10% to 0.13% (+0.03%).GENUINE SAVINGS
• The Non Genuine Savings product has been removed from sale
• 5% Genuine Savings is to be validated for all:RAMS rumoured to follow suit Monday.
Richard Taylor | Australia's leading private lender
Didnt take RAMS longPlease be advised that RAMS has introduced the following changes to its credit policy for the broker channel:
• The maximum LVR available will now be 90% (previously 95% LVR)
• All loans where mortgage insured, will become "standard" loan applications requiring a deposit of 5% minimum genuine savings
• Mortgage Insurance premium capitalisation is to a maximum LVR of 92% for fully documented loans (90% LVR + 2% LMI) and 82% for low doc loans (80% LVR + 2% LMI)
What is classified as genuine savings?
Where the LVR exceeds 80%, a 5% minimum deposit is now required which is sourced from the borrower’s genuine savings and must be verified with satisfactory evidence.Examples of genuine savings could include:
• Personal savings accounts or term deposit accounts
• Real estate equity
• Tax refunds
• Bonuses and dividends
• Accessible superannuation (non-preserved portion)
• Historical Rental Statements (New)
• Value of Excess loan repayments (New)Richard Taylor | Australia's leading private lender
Richard,
Well.. I hope that the LVR will continue downwards to 80%… it will stabilise the current property price..
I think sooner or later the bank(s) will do the same to the current REIT
GPT, Stockland, CPA tc… despite their LVR is <50-60%…. but the bank(s) keep devaluing their assets price.
http://business.smh.com.au/business/banks-suck-reits-dry-20090422-aerk.html
Love to see re-valuation happening to residential market….
Hi GOM,
What do you mean by "stabilise the current property price"?
Would it not be fair to say the property prices have stabalised in the past 12 months… especially in the higher end of the market?
Cheers.
over-reaction IMO Richard, and Franchise is sure to follow in the next few weeks
this will effect a lot of people, from first home buyers to people working in credit
will be interesting to see the knock-on effect in the next couple years…Hi
I think from a serious RE investor's point of view, 'stabilising the current property price' means removing the emotional strings pushing the offer prices upwards above what a property is reasonably valued.
With 35-40% of all new loans issued to FHBs, the market has become quite unstable for many RE investors to handle.
Regards
DanielJimmy,
I believe that our current residential property price has been inflated by 10-20%… By only lending up to 80%, it will make the price become more sensible.
Just look at commerical properties…. the value has been slashed by up to 80%. I am saying that some of them are really blue chips commercial property (i.e. Pitt street in Sydney or Bourke St in Melbourne). So why the residential property can't be devalued by 10-20%… that is what my understand about 'stabilise the price'
Cheers
Witch lenders out their are still offering 95% LVR. Can you get this with a low doc loan?
No i am sorry matkat lodoc 95 was withdraw 9 months ago and maximum lodoc is 80% lvr.
There are still one or 2 lenders offering 95% loans and one recent lender announced they are reversing the trend and doing away with the genuine savings requirement.
Richard Taylor | Australia's leading private lender
So does Westpac stil offer .7% discount to borrowers of $500k? Also what is the maximum LVR you can get without LMI
Post – 7% discount to borrowers of $500k – NO.
Maximum full doc loan without LMI is 80%.
Richard Taylor | Australia's leading private lender
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