Age is becoming a real issue with most lenders.
- Thread starter mystery
- Start date
Some mortgage cases being brought by borowers are getting plain stoopid.
Thats why experienced borrowers are getting tired of the Sandpit/kindergarten style legal advice they need to receive before getting a loan
Imagine someone who is on their 10th plus loan being asked to get financial and legal advice ................................again.
The NCCP has some very good things about it, to a large extent, the true lo doc is pretty much gone, and for some thats bad, but they were getting to the point of much misuse ( ie CBA and BOQ and Storm are good examples)
I believe the legislative powers that it provides nationally, were pretty much available on a state basis in most cases.
From our POV, the process has meant where clients and advice used to come first, we must now ensure that our focus is on compliance, paperwork and audit trail.
We have a micro business of 4.5 people, and we are very close to needing to hire a 50 to 75 % FTE purely to create and manage the paperwork.
I do believe that once its actually rolled out to lenders in full, after using brokers as guinea pigs, there will be some common sense changes and rationalisation.
ta
rolf
....which, if I'm not mistaken, stems from the root cause of opposition members of Parliament (both State and Federal) asking sticky questions of the relevant Govt minister of the day to try and make him/her look incompetent, who in turn, needs to have all of these audits and statistics at their fingertips to counteract the Opposition by making him/her look competent, compiled by all these wonderful pen pushers in Canberra, who have received them from business folk such as yourself Rolf....
as they say, **** rolls downhill.
What about bringing in the other half of the poor .5 person who must have trouble keeping things together
Oh - I wasn't worried as we have our plan firmly in place ... but does make you realise how many don't.
Also, thought it was unfair to have a personal lack of a plan come back and bite the banks. Another sector where self-accountability and responsbility is being taken over by big brother.
I remember in our early investing days, in order to get a loan we had to sit thru the most boring meeting with the banks' "financial advisor". He quickly realised that we knew more than he did but still had to go thru the motions.
Some interesting reading came out in a paper ASIC published a few days ago regarding NCCP and low doc loans, which parts we'd be extending out to full doc loans.
Exit strategy be one issue but the treatment and inclusion/justification of exclusion of ongoing commitments outside of HPI and servicing calculations are another
Paper attached for your reading pleasure.
Exit strategy be one issue but the treatment and inclusion/justification of exclusion of ongoing commitments outside of HPI and servicing calculations are another
Paper attached for your reading pleasure.
You've answered your own question. If you want to get into the property market at 50+, have an exit strategy. If it's reasonable and is communicated to the lender, you'll be able to borrow money.
You've got to ask yourself how will you afford to hold this property after you stop working. If you're buying an investment property lenders will be fine with a strategy of selling the property.
If it's your own home, lenders don't want to put you in a position where you'll need to sell your own home. The borrowers response to this is to make extra repayments. The banks response is to set up a loan that amatorises over a shorter period of time so the loan is paid off by retirement age.
If you don't like this, the really clever thing to do would be to consult a financial planner and integrate a 'transition to retirement' plan into the loan proposal. This could demonstrate that whilst you can't make accelerated repayments at age 50, with the right plan and implementation, you would be in a position to do this at age 55 to 65 and hence own the home at retirement age. Reasonable assumptions and risk mitigants can be factored into this.
To put it in perspective, we recently put together a financial plan and a loan proposal for a client to borrow $900,000 against his own home at age 70. We clearly demonstrated succession plans and showed that he would be in a position to pay down the debt or continue to afford the debt when he stopped working.
My age record for a 30 year loan is 84 years old : ) at settlement
ta
rolf
ta
rolf
Mainly on PPOR lends with no defined exit strategy
A typical one where it can get tough is a 55 yr old single person with dependent kids and little super may be assessed over a 15 year PI term at 8 % or so.
Based on an average income that doesnt buy you much..
Dependong on the Loan to value ratio and mood of credit, you can sell the concept of sale and downsize on exit
ta
rolf
Phew! I saw something Bill Zheng had said about this on another thread and was having a mild panic attack. I'm 44 and feared that I would have to buy lots of property in the next 6 years or miss out.
Similar threads
