Splendid accommodation 7 Arika Avenue, Ocean Shores Priced to sell $608,000 4 2
Property Insider
propertyinsider@echo.net.au
Lending in Postcode 2481 Sharon Clarkson In recent weeks one major bank has deemed the postcode 2481 a higher risk for lending by changing its Lenders Mortgage Insurance policy. The Commonwealth Bank now charges customers Lenders Mortgage Insurance (LMI) when they choose to borrow over 70 per cent lend to value ratio (LVR). Traditionally, financial institutions charge a borrower a LMI premium when they have less than 20 per cent of the purchase price to contribute towards a deposit. CBA have raised the percentage for Byron Bay, and borrowers now need a 30 per cent deposit, plus associated costs, to avoid paying this additional fee. COVID-19 has lenders on notice to target postcodes and certain employment types that they feel are more affected by the pandemic. And without the area’s normal market for tourism, which is without a doubt a major source of income for its borrowers, this lender is making assumptions and adjustments accordingly. Factors the lender may be considering; the LNP Government’s decisions
to cease JobKeeper payments in September 2020 (the government has now decided to extend JobKeeper), estimated rising unemployment figures, vacancy rates of investment properties for long term tenants and affordability of these homes, the chances of small-to-medium businesses being able to recover, plus the number of home loans in this postcode already on temporary repayment holidays or deferral programs. It could also be based on current mortgage arrears for the area. This has a flow on effect to how many homes may soon hit the market for sale, and predictions of what could happen to the property market for postcode 2481. Are these assumptions correct? Only time will tell. What does this mean for the borrower? If you have 20-30 per cent deposit, plus associated costs saved, and 2481 is still your desired postcode, the Commonwealth Bank might not be the lender of choice for you moving forward. If you have a home loan preapproval already in place with this lender, and this new LMI premium now
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applies, you have the option to capitalise it to your loan, or start your loan application again with another lender that has a different lending policy. If you are an existing CBA customer and looking to increase your mortgage to between 70-80 per cent LVR, the loan increase will now be more expensive, and it may be worth considering the option to refinance as a cheaper option. A Mortgage Broker can quickly and easily check postcodes across a number of financial institutions. They can guide you through maximum LVRs for 2481 but please understand, the Commonwealth Bank writes the most home loans Australia wide for a reason – they have a broader and more general credit policy that fits more customers’ circumstances. A lot of people turn to this lender because they, or the security property, fall outside other lenders’ criteria. The take home for customers – please ask the right questions
when borrowing; don’t be afraid to change lenders or move your home loan if you are able to. Seek advice from an Accredited Mortgage Broker who works across many lenders, even if it is just to start an initial conversation. Having knowledge and being informed of your options is a powerful place to be, and if it saves you money then it is time well spent. *Sharon Clarkson is a Senior Mortgage Broker who advocates education for customers and community around relevant issues and is proud to offer Byron Bay 21 years of lending experience.
Live the rockstar lifestyle without worrying about noise complaints from the neighbours, this highset timber home is affordable, well presented and ideal for first home buyers and investors. • Elevated, private and flood free, 914sqm block • Healthy rental return with tenants in place • Views to Cape Byron Lighthouse + scenic mountain range • Modern kitchen with stone benches, dishwasher + gas cooking • Stylish bathroom with tub + separate shower, solar power • Guest accommodation with second bathroom + separate entrance • Walk to Brunswick Heads, close to river • Just 3 minutes from your choice of local boat ramps Inspect: Contact:
Private inspections by appointment Fiona Johnson – 0400 418 886 Fiona Johnson @realty
`ƖōƷ ǩǩǽ ǩǧǩǧ The Byron Shire Echo 21