{"id":14766,"date":"2017-11-23T01:00:52","date_gmt":"2017-11-22T14:00:52","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=14766"},"modified":"2017-11-23T01:00:52","modified_gmt":"2017-11-22T14:00:52","slug":"have-apra-lending-restrictions-made-it-harder-to-get-a-home-loan","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/have-apra-lending-restrictions-made-it-harder-to-get-a-home-loan\/","title":{"rendered":"Have APRA lending restrictions made it harder to get a home loan?"},"content":{"rendered":"

It\u2019s no big secret that more and more Australians are exploring how real estate finance and investments can improve their financial situation.
\nDeveloping an investment strategy which involves buying quality investment properties is one way that they can create wealth and set themselves up for a more comfortable life before and after retirement.
\nBut the lending market, just like the real estate one, can go through various stages, which can make it more difficult to access finance.
\nHowever, even though the market is restricted due to regulatory intervention, that doesn\u2019t mean that finance deals aren\u2019t being done.<\/p>\n

The biggest changes in the real estate lending market<\/h3>\n

Let\u2019s get one thing straight: the banks are still very much open for business.
\nThat means that home loans are still being approved for borrowers \u2013\u00a0homeowners and investors, alike<\/a>.
\nSure, home loan interest rates have changed over the past year or so but mainly for investors.
\nThe Reserve Bank hasn\u2019t touched interest rates since August 2016 and that was a 25 basis point cut.
\nWhat has happened is that the Australian Prudential Regulation Authority (APRA) has instigated lending restrictions to investors and interest-only borrowers.
\nThat has meant that lenders have increased interest rates for these types of borrowers as well as changed their serviceability calculations and loan to value ratio requirements.
\nWhat does this mean in reality? How hard is it to get a home loan?
\nWell, it means that lenders are approving\u00a0home loans<\/a>\u00a0for quality borrowers who can afford the repayments under the current regime.
\nBorrowers who previously may not have had a decent deposit or who opted for interest-only repayments because that\u2019s all they could afford will find it more difficult to get a home loan today.
\nBut I don\u2019t think that\u2019s a bad thing \u2013 we want a robust banking sector after all when it comes to real estate finance and investments.<\/p>\n

How these restrictions are impacting your investments<\/h3>\n

Those APRA lending restrictions have impacted investors the most, especially in Sydney and to a lesser degree, in Melbourne.
\nNew and existing investors<\/a>\u00a0have experienced increases to their interest rates of up to about 0.8 percentage points.
\nDitto for interest-only borrowers, whether they are investors or not.
\nIt\u2019s important to understand that even with these increases to home loan interest rates, rates are still hovering around the five per cent mark, which is historically low.
\nMany interest-only borrowers have responded by changing their repayments to principal and interest, which is always a good idea for homeowners.
\nMost existing investors have been able to maintain their repayments without too much trouble under the higher rate environment.
\nAnd the cycle of rate increases appears to have slowed given data is showing that the number of investors in the marketplace has fallen, which was APRA\u2019s goal all along.
\nIn fact, APRA chairman Wayne Byers has gone on record as saying \u201cthese were only intended as temporary measures\u201d and that APRA would need \u201cto be comfortable that the industry\u2019s serviceability standards have been sufficiently improved and \u2013 crucially \u2013 will be sustained.\u201d
\nAnd In its October monetary policy meeting, the RBA stated that that household balance sheets \u201cremained a key area of attention for policymakers\u201d.
\nThey also noted that high debt meant households were sensitive to any increases in interest rates.
\nHowever, the RBA recognised that the levels of interest-only lending and high LVR loans were declining, as had investor lending.
\nAdditionally, banks were already close to meeting APRA\u2019s capital requirements for 2020.<\/p>\n

Structuring your finances to stay ahead of market changes<\/h3>\n

While it might seem like it is harder to get a home loan today, it doesn\u2019t have to be that way.
\nEnsuring you have\u00a0professional advice<\/a>\u00a0from the outset will improve your chances of home loan success as well as creating the very best real estate finance and investments.
\nWhen it comes to property lending today, banks still want your business.
\nThe prudential controls, however, means they have to be more selective.
\nThere remains lending products on the market for all types of home buyers \u2013 from sophisticated investors to first-timers.
\nThe key to success is to ensure that your application is as squeaky clean as possible.
\nThat means understanding which home loan is going to be the right one for you as well as your financial circumstances.
\nThere is no point applying for a home loan if you don\u2019t have the required deposit or your credit history is a bit wonky.
\nPreparation is key so you can submit the very best application which lenders won\u2019t be able to find any reasons not to approve.
\nThese articles originally appeared at Intuitive Finance.\u00a0<\/em>
\nhttp:\/\/intuitivefinance.com.au\/apra-lending-restrictions-and-home-loans\/<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s no big secret that more and more Australians are exploring how real estate finance and investments can improve their financial situation. Developing an investment strategy which involves buying quality investment properties is one way that they can create wealth and set themselves up for…<\/p>\n","protected":false},"author":176692471,"featured_media":14768,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_wpcom_ai_launchpad_first_post":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[2,13,25],"tags":[70],"class_list":["post-14766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-andrew-mirams","category-latest-story","category-sponsored-channels","tag-featured"],"yoast_head":"\nHave APRA lending restrictions made it harder to get a home loan? - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/have-apra-lending-restrictions-made-it-harder-to-get-a-home-loan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Have APRA lending restrictions made it harder to get a home loan? - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"It\u2019s no big secret that more and more Australians are exploring how real estate finance and investments can improve their financial situation. 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