The banks work out if you can service the loan repayments by using a higher interest rate than what it currently is to assess you (the assessment rate).
and also, i was under the impression you could change from a variable rate to a fixed rate. so we will be on variable (cause ppl have said there will be some more decreases) and then at the first sign of an increase we will change it to fixed. is this scenario correct? (i hope so).
I think the best way to find out is talk to a mortgage broker - it won't cost you anything and it will let you know where you stand. Also it is getting harder to get a loan with one of the major four banks, but there are still plenty of competitive reputive smaller lenders out there like bank west, INGDirect, IMB, etc who may find you servicable.
Timely thread! We are getting together paperwork for pre-approval, but I am getting more depressed about our chances as time goes by. We are both self-employed which already makes it hard, and we have 10% of the deposit between our savings, money owed to us and some other money we can lend- so its not like its just sitting in our bank account. And our savings history is bad for the last few months as Jan/Feb is always a slow business time.
Man....when I write it all out, it sounds terrible even though we actually should be above to afford repayments....should we even bother applying?!!!
Hollo: Yup, you can apply to switch to a fixed rate loan. You may have to pay a fee - depends on your lender. Usually you can fix the rate for a max of 5 years.
Jessica: Yes, it is harder when you are self-employed. But sure, it's worth applying - at least you know where you stand, and if they do decline your application they will give you reasons and you can hopefully work around those for next time, KWIM? And like misty said, there are other lenders who may be slightly more flexible in their assessment of you, but sometimes they are slightly more expensive - more fees and slightly higher rate... In any case, it is worth checking out if you're really desperate to get into the market.
I understand your frustration - DH and I are in a position where we'll just not be able to buy for several years yet.
If you are wanting to meet with a bank ive been told you are better off making an appointment with a mobile banker instead of just walking into a bank, they tend to be more helpful =)
Registered User
Reply With Quote
Bookmarks