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COVID-19 Mortgage update

 

Following up from last week’s EDM, if you or your family have been adversely impacted by COVID-19, there are a range of measures that lenders are implementing to assist both homeowners and businesses, including being able to freeze mortgage repayments for up to six months.
The process to access such relief may vary for each lender, with some requiring an online application, and others requiring a phone call to a dedicated hardship line.
Some contact numbers are below for your reference.

contact numbers

 

CHANGES TO LENDING STANDARDS:

We mentioned that we would update you if there were any changes to the lending environment, or the way that lenders are assessing mortgage applications.
This is developing rapidly with many lenders now investigating an applicant’s financial position with more scrutiny, aiming to understand the level at which you’ve been impacted and whether there are any mitigating factors.
As a property owner or potential property owner, it is important to stay on top of these changes as not only will they affect your application, but they will also affect property prices.
Some lenders are requiring the following mandatory questions be answered prior to an application:

  • At this point in time, are you aware of any changes to your broader situation
    that may impact on your earning capacity?
  • Have you been advised of any changes to your employment circumstances or income levels that will affect your ability to meet any existing debts or expenses?

If you answer yes to either of the above questions, then the bank will want further clarification.

 

See below for examples of changes to lending policy that we have identified in the past week or two:

  • If the industry that you’re working in has been radically affected by COVID-19, your income will be assessed on a case by case basis
  • If you are self-employed and have been pre-approved based on your FY18 or FY19 tax returns, your lender may request that you provide recent BAS and business bank statements
  • Some forms of casual income are not being accepted by lenders, particularly in industries that have been heavily affected.
  • Mortgage insurance providers (LMI) are stepping back from industries that have been heavily impacted, including hospitality, tourism, entertainment, manufacturing, retail and travel.
  • If you have already been approved for finance, lenders will still be doing
    employment checks. They have the capacity to delay settlement to reassess if there have been any changes to an application or can remove finance altogether.

We will always keep you updated as new information comes to light. As always please call us if you have any questions.

 

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