Home loan changes, property direction & what's in store for 2020 - January🌱
Welcome back, we hope your holiday period was full of love and cheer with friends and family. In 2020, some will purchase their first property, add to their growing portfolio, or refinance their home loan to a cheaper rate and Black & White Finance is here to help every step of the way - here's what to look out for this year.
Property pigeonholes; What the lenders focus on!
Whether you're purchasing property or looking to refinance, what are some things to look out for in 2020 with lenders?
The main thing lenders will check, in addition to the usual income, savings, and property they're taking as security will be your spending habits.
All the different lenders categorise your spending habits into two sub-categories;
Basic living expenses – These include your groceries, clothing you purchase, personal care, transport, & any owner-occupied rates and utilities you use.
Discretionary living expenses – These are childcare costs, education costs, insurance, medical/health costs, telephone, internet & everyone’s favourite – recreational expenses (these are the costs of a night out on the town).
The lenders are checking your bank statements to see if there are any inconsistencies between what we’ve told them we spend, versus what we actually spend.
Of course, they also look to see what time of day you are spending your money as well, so it’s probably not the best idea to withdraw hundreds of dollars at the casino ATM in the early hours of the morning, just to be on the safe side!
Property markets; Round they go, where they stop, Black & White knows!
We at Black & White Finance believe the property market will continue to go up this year.
According to our economic experts, these interest rates are at record lows and could go lower this year. Even though the banks are focusing on our living expenses, the relaxation in the borrower serviceability assessment rate means individuals can actually borrow more. So these factors, combined with the certainty around the property tax implications after the election are all combining to further support growth we think.
Homebuyers should take the time to speak to their mortgage broker to ensure they fully understand all the lending changes and ensure they're eligible for that loan they require. First home buyers should also make sure they're across the new first homeowner initiatives from the government and how it can benefit them. Not all lenders are providing the first home owners deposit guarantee for example, this is a common misconception in the market. See here for more information on which banks are able to help those first home buyers with the guarantee: https://www.nhfic.gov.au/what-we-do/fhlds/
Rising from the ashes – A green loan of hope!
For those prospective property owners out there with a passion for ensuring an environmentally sustainable future, Bank Australia is offering a 0.4% discount for homes that utilise clean energy.
The Bank Australia Clean Energy Home Loan is applicable to customers who purchase or construct homes which have 7 or more stars in the Nationwide House Energy Rating Scheme.
We think this is a great incentive to get people to look positively to the future and create cleaner, more sustainable energy whilst also saving some money.
The green home loan will offer the potential to have energy savings as much as 25% all the while reducing the average Australians carbon footprint.
A win-win situation any way you look at it and definitely something to consider on your next purchase.
Final Thoughts
So if it's applying for finance, knowing where the property marketing is heading, or reducing energy emissions, we hope you have enjoyed this month's read.
On a personal note, we at Black and White Finance are very excited to have surpassed the milestone of 50 flawless Google reviews!
Thank you, we couldn't have achieved this milestone without your wonderful support.
We’re truly humbled, and endeavour to continue improving with each custom tailored experience we provide.
Enjoy your Australia Day celebrations, be safe, and we'll see you again in next month's blog!
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