2019 has certainly started off with a bang both in the mortgage & finance industry and within the Australian property market.
The report from the banking Royal Commission was released in February 2019 which saw Mortgage & Finance Brokers being thrown under the bus, and from late 2018 we started to see a big correction in the property market with property prices dropping considerably in some areas.
When the Royal Commission report was first released, Royal Commissioner Kenneth Hayne recommended that the borrower (you) and not the lender (the banks) pay a fee to the broker when applying for finance. Moving to this model would have seen huge negative consequences not only for the mortgage & finance broking industry but for the borrower, as it would decrease competition and put the power back in the hands of the big 4 banks (as if they haven’t already got enough power!).
With the current model it means that I can offer my service free of charge for new loan applications as I ultimately get paid by the lender once your loan draws down. This is great for you as I can find you the best possible loan across many different lenders that suit your circumstances.
As the dust settles on this initial knee jerk reaction, we are seeing both sides of the Government shift away from the initial recommendations put forward by Royal Commissioner Kenneth Hayne which is great news.
In 2017 and 2018 we witnessed some incredible growth in the property market, and whilst this was a great time for vendors it wasn’t particularly good for those looking to get into the property market as competition was fierce and houses were getting snapped up well above reserve prices. It was particularly hard for first home buyers as they were being priced out of certain markets.
It’s Not All Doom & Gloom
Instead of focusing on the doom and gloom the media like to spread, focus on the positives of what this all means:
- If you are ready to buy a house, whether it be to live in or as an investment, now is a great time. It is a buyers-market so there is room for negotiation
- Although in the past banks tightened their lending criteria it does not mean it is impossible to get a loan, it just means you need to be more organised
- You still have access to some great low interest rates
- If you are selling and buying in the same market, then it should not matter that your house has decreased in value. As pointed out by one of my local real estate agents, Luke Lawlor from Biggin & Scott, your selling fees will be lower, and you will be paying less on stamp duty on the purchase of your next property
- Most importantly, you have access to me as your Mortgage & Finance Broker who can find you the best possible loan to suit your circumstances for free – Nikki Berzin.
Remember – “where focus goes energy flows”. Focus on what your end goal is, engage an expert to provide you with the facts to help you achieve your goal and put a plan in place.
Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product. Subject to lenders terms and conditions, fees and charges and eligibility apply.