Some property commentators have been nervously awaiting the outcomes, concerned that stricter borrowing guidelines – designed to protect vulnerable borrowers – could slow sales activity and dampen prices.
But the good news is, this kind of already happened, so by all accounts, the property market has survived unscathed, says Property Update.
Banks had already tightened their lending practices after the regulator introduced caps on the percentage of investment loans a bank could issue; and many banks pre-emptively tightened the way they assessed borrowers’ incomes and expenses.
Mortgage brokers are still waiting to see if the government adopts the recommendation that banks no longer pay up-front commissions to mortgage brokers for selling their loan products. This is designed to remove any conflict of interest and ensure the broker recommends a loan truly in the best interest of the borrower… not just one that will give them a hefty kick back.
Sounds good right? The flipside is, borrowers would then need to pay the broker a fee-for-service up front. But for now, the government has yet to confirm if and how it would implement this recommendation so you can still get your broker to find you a loan for ‘free’ … just make sure you ask them about commissions to be sure you’re getting the best deal for you.