Over the past year we have seen the Australian lending landscape change for property buyers. APRA restrictions have been making it increasingly difficult for investors to access funds and this has now had a flow on effect to owner occupiers. Banks and other lenders are scrutinizing all applications and this means that expenses we didn’t previously consider are having a negative impact on our borrowing power.
Recently we have had a number of clients who have wanted to upgrade their family home but found that their “affordable” investments were limiting their total budget. What I am talking about here are properties that they have held for some time that are located in regional areas and/or smaller capital cities. These properties haven’t appreciated at the same rate as real estate in Sydney and Melbourne. Effectively, they have been losing ground against property in these two cities. And now, because the banks have been tightening up their lending criteria, they are finding that these under performing investments are effectively costing them a larger home.
I have often written about the importance of looking for capital growth when buying an investment property. Now capital growth is more important than ever because a poor performing asset can drain your borrowing power for a good asset.Now capital growth is more important than ever because APRA has made sure that a poor performing property can drain your borrowing power for a good asset. #investment #BuyersAgent Click To Tweet
But that’s not all! Budgeting and discretionary spending in other areas of our lives can have a dramatic impact on our borrowing power. I’ve asked James Keilor, Senior Credit Advisor at Oxygen Home Loans, to give us a few lending credit policy points that can make a big difference in getting the loan you need.
|James Keilor’s 6 tips for improving your borrowing power:
If you’d like to speak to James about your borrowing power, please call him on 0418 270 288 or send him an email.
If you’d like to find out more about buying a property investment that won’t be a drain on your future, book in for a one-on-one property investor session with Veronica.
Published: 13 December 2017.
Revised: 18 December 2018.
DISCLAIMER: Good Deeds blog/buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.