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The Weekly Roundup

Writer's picture: Justin CornockJustin Cornock


It certainly has been a busy week in finance and money news.


So much speculation out there, plenty of negativity too if you listen to the media. I wonder if any of the journo’s read chicken little…


A major lenders change that could herald a rate cut is Westpac reducing their servicing rate, (ability to borrow) from 5.75% down to 5.35% OR it could just be that they are not gaining as much market share as they need given the contraction their loan books have seen in the last 12 months. My money is on the reason they are doing this is both of these things.


The big 4 announced this week that they have complied with the CCR (comprehensive credit reporting) guidelines ahead of time with 100% of the two year data now being available.


You might remember this was introduced to be in a clients best interests to enable a better understanding of a borrowers capacity to repay debt.

From where I sit it has just caused more problems for borrowers, who are largely unaware of this happening. It has just highlighted to lenders that there may have been a late payment on one loan several months ago. In some cases a client is penalised, either by way of a higher rate or forced to pursue lending with a 2nd tier lender who lends to clients who are credit impaired, like Pepper or Bluestone.


A quick snapshot of what the reporting includes is below,


  • The financial institution where an account is held

  • The type of account that is held – personal loan, home loan, overdraft or credit card

  • Account dates – open and closed (where applicable)

  • Current account liability (for loans, the balance plus redraw amount) or credit limit

  • The account repayment history, including:

  • When payments are made on time

  • When payments are more than 14 days late

If you are looking to do anything regarding borrowing money, your first step should be to run a credit check on yourself BEFORE they do anything.


Customers can obtain one free credit report a year from the individual reporting bodies. Equifax is probably the most used reporting agency. A free report can take up to 10 days to arrive. You can pay to have a report faster too.


Late last week I also added another arrow to my quiver of lenders becoming accredited with Military Bank. Military Bank are a relatively small lender however they have a product that has been very elusive to brokers and has always held somewhat of a ‘dark magic’ reputation.


I am now able to write loans for Defence Force members under the DHOAS scheme. In short this scheme helps our serving and recently retired defence members get into and stay in the housing market with some great subsidies. More information here https://www.dhoas.gov.au/


There are only 3 lenders who can assist with DHOAS loan.


  1. NAB (only by referral from a broker with no commission or trail paid even if you write the loan)

  2. Defence Bank (who only offer the loan direct through their bank network or mobile lenders) and

  3. Military Bank who I am now proudly accredited.

If you are a serving Defence member and not taking advantage of a DHOAS. I am more than happy to chat about how to help.


I hope you all have a great week.


Justin

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Authorised Credit Representative No.523775  under Finance House Group Australian Credit License 478761

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