Good Morning!
Looking back at last week the biggest news probably has to be Open Banking flowing through. I know its been talked about for a while now, and will still take some time before it is available through all lenders. Currently only the big 4 and 2 smaller lenders are accredited to do so.
The end result will mean that not only will data be supplied by credit reporting agencies, it can also be requested by and supplied from the banks you have banked with in the past. It is mean to be a more accurate real time snap shot of you and your credit worthiness. It will be interesting over the coming months to see what information comes through, and how this is used to improve a clients ability to borrow, or whether it becomes another obstacle that clients need to negotiate.
I think this is yet another reason to help clients understand why you cant just go out and apply for multiple credit cards ‘because you want the points’. I still fail to understand why credit and its implications are not taught in schools. I think that financial literacy should be taught throughout a child’s journey so that when they leave at 17/18 they understand how credit can affect huge swathes of your life if you’re not careful.
I have been watching several commentators in the last week expressing their own frustration at the stalled home builder, that the government is trying to deliver. It could be some time before we see a dollar trickle out of the coffers into the waiting palms of those who are eligible. From a lending standpoint this means that banks are unable to determine what their policy will be around it being able to be used as contribution to a loan. Another great reason why when discussing with clients their abilities to borrow and buy that this not be concidered right now. You need to be able to complete a build or a renovation without needing it UNTIL such a time as the grant is actually available. Then if it becomes available later it can be factored in then. The only tripping point here is that the $25k must be used to pay the builder/contractor, which could make this messier if you are applying for the grant retrospectively. This is another ‘watch this space’ event.
In rate news this week fixed rates hit 1.99% for 1, 2 and 3 year rates… In Tasmania…. Unfortunately these rates only apply to one lender in Tasmania. As you will have all seen, there has been a significant jockeying for position in the fixed space. Though several lenders like ING and ANZ haven’t stayed there very long with their 2.09 and 2.19% rates. This will be the most competitive space in the coming months and as the pack starts to clump together we will continue to see headline grabbers like these. Just another reason why clients need a broker in your corner.
I hope you all have a smashing week, I am always here if you want to run any scenario’s.
JC
Scenarios and interest rates quoted above are suggestions and constitute general advice only.
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