To keep the property market afloat during the economic crisis brought about by the COVID-19 pandemic, lenders had brought about many concessions in their lending measures.
We also saw the RBA cut cash rates to as low as 0.1%, which enabled lenders to provide loans at the lowest interest rate possible.
But with the economy rising back up, lenders are back to keeping their guards regarding any loan for high-risk borrowers.
As they plan on setting higher rates in the coming month, they have also started to slow down their lending altogether.
However, banks are now removing extra checks imposed on borrowers at the height of the pandemic.
Lenders are claiming to be taking a rather commercial approach to credit assessment.
Commenting on this recent development, founder of Home Loan Experts, Otto Dargan, said, “Now lenders have removed these restrictions, and the main problem is that they’re being inundated with applications”.
While the increase in applications and lenders not requiring the extra checks should have increased the number of high-risk borrowings, we see no such signs.
It is indicative of the fact that lenders are indeed taking a rather selective approach.
What does this mean for high-risk borrowers?
Getting a loan for high-risk borrowers during the current state can be very difficult.
The flooding of applications for home loans and banks slowing down lending only means they will be selective.
We quite evidently can see the declining trend for high-risk borrowers getting approved.
The best way for such borrowers, hence, would be to go through with your application process via mortgage brokers. Brokers know the lending policies through and through and maintain a good rapport with lenders.
Thus, if anyone can convince the lenders to make you an exception by defending your income position in the best way possible, it is them.
Our expert brokers can help you get a home loan as a high-risk borrower.
Please call us at 1300 889 743 or fill in our free online assessment form, and one of our brokers will get back to you right away.