) AND for those that hold residential property as an investment mechanism.I was just on the fone to a mate, and said this could be a negative for the market however me being the optimist ends up saying this.
Geez, this may be good for us, FHB usually have a small amount say 10k saved.... therefore $10k is 5% of 200k house/unit, and their FHOG will cover the other 5% + expenses... so the bottom end of the market should get fizzing as more of them look @ more affordable property.
Even better for me.
Next thing they could do to make it better for me is doing a Investors grant where you get $14k for buying an IP
lol
CBA have just announced a further tightening to their lending policy....
Unless a client has 6 months of existing good credit history with CBA they are restricting refi's and purchases to 90% LVR.
And from today a minimum of 5% genuine savings is now required.....for loans over 85% LVR
Credit policy changes as from Monday 30 March 2009
Due to the increasingly volatile economic climate and rising unemployment levels the Bank is taking further steps to ensure it continues lending responsibly to customers. In particular, we are ensuring customers who are entering into more highly geared borrowings have an established relationship with Commonwealth Bank and a demonstrated savings pattern over time.
Following the changes announced in Update 27/2/09, new criteria is being introduced. As from Monday 30 March 2009, the Bank is making the following additional policy changes:
Maximum LVR of 90%, excluding LMI, regardless of the purpose, for all customers who do not have current credit facilities with Commonwealth Bank.
Mandatory 5% genuine savings for new borrowers where the LVR is > 85%.
Maximum Lending Margins
The maximum LVR for all customers applying for a Home Loan, Investment Home Loan and/or VLOC, regardless of the purpose, will now be 90%, excluding LMI, unless they have 'current credit facilities' with Commonwealth Bank.
A 'current credit facility' is defined as an existing consumer lending product (i.e. Home Loan, Investment Home Loan, Line of Credit, Personal Loan or Credit card) which has been funded for at least 6 months with no arrears or missed payments. Closed accounts are ineligible.
Customers cannot borrow above the maximum LVR of 90% if:
They do not have a current consumer lending facility (i.e. Home Loan, Investment Home Loan, Line of Credit, Personal Loan or Credit Card) OR
They have a current consumer lending facility that has been funded for less than 6 months OR
They are refinancing OFI debts (refer Update 27 February 2009)
Customers that do not have "current credit facilities" should be encouraged to reduce their LVR to < 90%.
Note: Existing customers will still be eligible for a base LVR of up to 95%, but only where they have a strong credit history with the CBA.
Genuine Savings
As from Monday 30 March 2009, customers will be required to contribute a minimum 5% (increased from 3% refer Update 27 February 2009) of the purchase price in the form of genuine savings (or equity) towards the proposed purchase/transaction.
The genuine savings will need to be verified and may comprise of any of the following:
A demonstrated saving pattern established over a 3-month period
Gift – must be held in an account for a minimum of 3 months
Term deposit – must have been held for a minimum of 3 months
Cash – acceptable only if placed in an account for a minimum of 3 months
Shares – must have been held for a minimum of 3 months
Equity in existing property
Exclusions:
First Home Owners Grant (FHOG)
Additional borrowed funds i.e. personal loan
Proposed sale of an asset (other than property) i.e. sale of car
This requirement relates to all applications involving new borrowers where the LVR is > 85%. A new borrower is defined as one who does not currently hold an existing secured Home Loan credit facility with the Commonwealth Bank (Home Loan, Investment Home Loan or Line of Credit).
