CBA will not recognise the first home buyers grant of $14,000 for an existing home an

[Rolf Latham]

I think we have all become accustomed.......................to looser lending practices

Until late 2004 CBA had a 5 % gen savings requirement, as did almost all others ( some had 3) . So we are just looking to go back a few years

ta
rolf

 

[Spectre]

The other $10,000 we had to take a second mortgage at 17% His reasoning was my soon to be wife would probably get pregnant

We were furious so I took a second and third job and paid out the $10,000 second mortgage in twelve months.

Was he right re getting the wife knocked up though?

 

[Nathan]

how did the banker know that?? did he have insider information??

 

[chilliaa]

I think we have all become accustomed.......................to looser lending practices

Until late 2004 CBA had a 5 % gen savings requirement, as did almost all others ( some had 3) . So we are just looking to go back a few years

ta
rolf

Yes but this is only the start, they cant move to their desired 'target' in one step there would be a public outcry, so they will assess their risk, look at movements in average property prices and if neccessary increase it over time.

Remember as well there will come a time in the future when they will try to securitise and offload these loans as it frees up capital. It will be much easier to securitise them, if there is adquate cover. (the days of selling securitised assets at 100% LVR are gone for at least 15-20 years).

All in all basic game strategy 101 for a dominant lender.

 

[boods99]

did he have insider information??

There is a very bad joke in that, but I'm not going there!

Boods

 

[Nathan]

There is a very bad joke in that, but I'm not going there!

Boods

hehehehe....

Inside her information... will have correct grammar one day.

 

[Token Funder]

Remember a couple of other elements from the good old days of 80s banking...higher rates for investment properties!

 

[oldjonesy]

about time too.
How do we know someone has the ability to pay off a housing loan, unless we can see a consistant savings plan.
The govt grant is just that, a grant, it doesnt give any indication as to a borrowers ability to handle debt repayments.

Another benefit of the financial crisis is the reinstatement of sensible lending practices. Sure in the short term it will hurt marginal players, sure in the short term some people will scream its not fair, but i am in this for the long term, the last thing i want is a US style crash happening in australia

Fine sentiments but it should have happened years ago. I had no idea credit was so easy to get

 

[justallan]

Sorry, never mind, wrong thread...

 

[daniellee]

Hi

Definitely agree there is a general trend towards lender tightening up their criteria for new IP loans.

I approached MyRate recently and they wanted 5% deposit and 3 months saving history; which was not a problem for me because I was putting in a 10% deposit using a mixture of equity and cash.

Regards
Daniel Lee