Good Morning all,
Well what a week that was, with Victoria back in lockdown and Queensland closing their borders again. It has been hard to find the good news lately. My thoughts go out to all the Victorians and hope that QLD doesn’t end up in the same boat.
I spoke with several clients this week who have had some untidy credit reports and with the expected job losses imminent in Vic. Its worthwhile me touching on the importance of clients being upfront financially when they struggle. A head in the sand never ends in a great outcome for anyone.
Especially when they haven’t got the funds to make payments on their credit facilities. In the past you could be a little late with no consequence albeit a late fee. Now with credit reporting nearly fully active with nearly all institutions, being a couple of weeks late could mean the difference between 2.59% and 5%.
If a client starts the conversation with a lender BEFORE they are late, it is less likely that the lender will mark their credit adversely. Put into place a plan BEFORE it gets ugly is the always the best way to deal with things.
Defaults, late payments and other factors will always play a role in a clients ability to get the best rate. Defaults can sometimes be removed from a clients credit file, I have two credit repair specialists I can refer clients to who are ethical and work on a no win no fee basis, let me know if you need help with a client and I can give you their details.
I think for me one of the most shocking statistics I read over the last week was that 10% of Australian mortgages are on a deferred basis right now, the article is here.
Timelines to get things done are still ridiculous for most lenders, they are all still working on getting things done faster and some are performing better than others. The increasing level of difficulty I have had in the last few weeks with lenders continues to baffle me, the constant chasing, hours on hold sometimes, supplying already supplied docs multiple times because arguing with an assessor is never a great outcome for a client. I can certainly understand the frustration of clients, vendors and agents especially when things should be straight forward. The best rate isn’t always the cheapest, I know you’ve heard me say that before. The best deal for the client is from the lender(s) who has the best rate for the clients situation in the time frame that they have, sometimes that is not always the fastest path to follow either.
I think it is fair to say that banks will continue to tighten their positions on lending in the next little while. While rates will remain low for some time to come according to all commentators including the RBA, banks will remain risk averse to all but the strongest of applications.
Variable rates in the last week have fallen a little, with AMP and ING coming out with 2.59% for below 80% LVR loans on an owner occupied loan. No movement on fixed rates they remain static at the moment. As we move into the traditionally busy period with Spring on the horizon it will be interesting to watch how things move ahead. Have a cracking week out there let me know if you need anything at all.
JC
Scenarios and interest rates quoted above are suggestions and constitute general advice only.
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