Why is it getting harder to secure finance?

No one ever talks about the challenges of securing the finance for your new home, renovation or property investment.  With the value of land continually on the rise, we mostly hear the good news stories… I bought a house and doubled or tripled my money over a number of years….

No-one talks about the problems they had applying for a loan, the number of banks they had to approach before their loan application was approved, how the whole process was painful or that the loan they accepted was more expensive than what they really wanted to accept but were backed into a corner with timing. If this has been you in the past, you’re not alone.

The truth is that it’s not just you, and that dealing with banks is just getting harder and harder. Bank TV advertisements depicting helpful, knowledgeable, and concerned Branch managers acting in your best interests can be a far cry from the reality.

There has been a huge amount of mortgage growth in recent years, and banks are looking to restrict your access to finance.  To control and limit this growth, the banks have used regulator announcements as an opportunity to increase interest rates (margins) ‘out of cycle with the RBA’ on most home and investment loans.  They’ve also made their assessment criteria more rigorous, making it much harder for people to get into the market. Regardless of whether you are a home buyer or wanting to buy an investment property for the first or second time the process of securing finance is becoming more challenging.

The fundamental difference between working with Thatcher Finance and using a bank is that we work for you and not the banks. Our aim is to explain all of your options and educate you on what’s achievable so that you can make an informed decision about which bank and loan is right for you, versus the banks which only offer their own products to you.  They can’t offer you market wide choice and often lack the depth of experience to really educate you about your finance options.

Thatcher Finance will prepare a comprehensive finance application as opposed to the banks who make their decision based on the information that you provide.  Even if this information is inadequate, this is what their decisions are based on.  For some people this results in their application being declined with little or no feedback provided.

So here’s are our recommendations for putting your best foot forward. And don’t worry if this seems all too hard, because we are here to help you, if you need it;

Get organised! 

Have your tax file numbers, proof of income, banks statements and expense and or credit card statements in order.

Know your expenses

All your expenses are taken into account when applying for a loan, people are sometimes shocked and even a little embarrassed when they really understand how much they are spending. Don’t worry… you can use the process of applying for a loan to get your house in order which may include reducing and consolidating expensive credit cards or loans.

 Know your borrowing capacity

Never assume or risk that a loan will be approved by the bank. Instead find out well in advance of buying an asset if you can get the financed needed. Sounds simple, but this is a very common mistake people make which puts them at risk of losing their deposit.

Have Equity in your corner

If you have other assets such as property or a business, make sure that you have a current valuation so you know what your real position is before committing to a new acquisition. 

At Thatcher Finance we provide advice to you based on your personal situation and future plans. We explain the best way to structure your finances so that you have flexibility and have a plan in place to grow your property portfolio whether you are a first time home buyer or experienced investor. We are not aligned with any bank and our services are free to you.

Thatcher Finance is offering a Complimentary Property Valuation until October 30, 2017 for clients wanting to review their finances.  Call us on 1300 76 40 30 today.