How do I know which postcodes are acceptable for a home loan?

Any general questions you might have in regards to loans and finance.
BootyOs
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Joined: Wed Oct 14, 2015 7:01 am

How do I know which postcodes are acceptable for a home loan?

Postby BootyOs » Mon Jun 25, 2018 3:45 pm

Hi Home Loan Experts.

This is on behalf of my friend. He attended an auction in Lower Chittering and bid for a property. He has a not so good credit history but has stable employment. He had a default on his credit file but that was from an electricity bill almost 5 years ago and it wasn't his fault (he actually moved houses). So, he thought about applying with Pepper for a 90% home loan was a good idea. However, his application was rejected. The bank told him that the property is in a high-risk location. Do other lenders see Lower Chittering as a high-risk location and decline my home loan?

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Otto Dargan
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Re: How do I know which postcodes are acceptable for a home loan?

Postby Otto Dargan » Mon Jun 25, 2018 4:48 pm

Hi BootyOs. Welcome to the forums.

Each lender has their own postcode restrictions and there are a few that have a bigger appetite for category 3 locations and higher.

The reason Pepper Money are so conservative is that they're a specialist or non-conforming lender. Their lending policies are a lot more flexible than standard lending policies when it comes to considering borrowers with black marks on their credit file.

The trade-off is charging a risk-weighted interest rate and having stricter policies around high-risk locations.

Try our postcode calculator to get an idea of what most lenders consider to be low risk to high-risk locations.

Certain areas or postcodes are flagged as risky if the lender feels the price of the property is likely to fluctuate. This is especially true in the case of inner-city units, regional towns, or locations with "boom and bust" industries like mining and resources.

We know the policies of almost 40 different lenders, spanning specialist lenders to major lenders and banks.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will help you to get your home loan approved!

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

BootyOs
Posts: 8
Joined: Wed Oct 14, 2015 7:01 am

Re: How do I know which postcodes are acceptable for a home loan?

Postby BootyOs » Mon Jun 25, 2018 6:43 pm

Oh, it’s a relief to know that there are other lenders who may consider my property location. On what basis do they create these postcode restrictions? How do I know whether the property I want to buy lies in a restricted area?

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How do I know which postcodes are acceptable for a home loan?

Postby Otto Dargan » Mon Jun 25, 2018 7:14 pm

Hi BootyOs,

To give you an idea of the method to lenders' madness, smaller towns and remote locations tend to have slow growth and lower real estate sales.

Properties located in remote areas/small towns do not attract many buyers compared to an apartment in an urban area.

The banks usually divide locations according to population size, real estate values, the local economy and overall future growth of the area.

These are the main things the lenders are going to consider. And different banks have their own criteria or weightage for these factors.

One tool we use to stay one step ahead of the banks is to order multiplefree upfront valuations and go with the lender that will accept the location of the property you want to buy.

Call us on 1300 889 743 or fill our free assessment form to speak to a mortgage broker.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

BootyOs
Posts: 8
Joined: Wed Oct 14, 2015 7:01 am

Re: How do I know which postcodes are acceptable for a home loan?

Postby BootyOs » Mon Jun 25, 2018 8:33 pm

Thanks for the information Otto. I’ll ask my friend to contact you guys and proceed thereafter.


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