Create the life you want
I expect you will have seen some media attention on the softening property market and bank lending by now.
We expect this to continue for some years.
Chrysalis would like to alert you to the fact that refinancing your loans or taking up a new loan is about to get much much harder. You may want to think about taking action now and not waiting any longer if this is you.
Additionally, most lenders have pulled out of lending to people wanting to buy properties through Self Managed Superfunds. There are only a couple of non bank lenders left and the interest rate they charge is high. So we may see this opportunity come to an end very shortly.
After recent meetings with a large independent Mortgage Broking firm last week they confirm that they have received briefings explaining that:
- A Credit Crunch is now a distinct possibility (very difficult to borrow money at all).
- Amounts that can be borrowed by clients will be significantly reduced due to much tighter living expense assessment driven by interim report recommendations from Commissioner Hayne in the Banking Royal Commission & regulator crackdowns.
- Banks are now applying a 7.5% – 8.5% national interest rate to base their lending on which is reducing the amount people can borrow significantly.
- Banks are stating that they will not be permitting clients to enter into a new interest only arrangement after their current interest only loan switches to principle & interest which will increase the interest repayments significantly that people will need to pay (as per my previous email). Get ready if this applies to you!
- We expect borrowing capacities will have dropped between 30-40% by the time Christmas comes from their peak in 2015.
We expect property prices to continue to fall as buyers become few and far between where lending is required.
World Residential property growth.
Our broker partner has issued the following ‘Heads Up’ to you and anyone you know…….
“I Cant stress enough that if you have clients on the books who are either rolling off Interest Only periods or who need finance for investment purposes or simply want to review their lending for a better rate they will need to act ASAP to give themselves opportunity to do so.”
The intention here is not to be dramatic but to let you know that there are many factors all converging to point to these facts and we want you to be informed and warned so you can get ahead of these significant changes.
As always we are here to help. If you want to chat re anything or need advice with your lending, please contact us.
