How to take advantage of the banking royal commission
Contact
Feb 13, 2019
How to take advantage of the banking royal commission
The royal commission results are in and it’s grim reading. Banks and cornerstone financial institutions have been taken to task over their indefensible treatment of loyal customers and the recommendations will be accepted in full by the Government, as they should be.
But what does this mean for property investors and homeowners? We have seen over the past year a massive tightening in lending criteria. Bank now pour over credit card statements and review every record of your personal expenditure.
Betting accounts, subscriptions to the gym, restaurant bills, internet spending and even speeding fines will all be looked at. You need your house in order to get a loan now, and many would say that’s just how it should be. Grandparents will tell you “that’s what I had to do to get my first home loan in the 60’s and 70’s, so stop complaining!”.
There is a school of thought that I always subscribe to: “If at all possible, take advantage of adversity!”
So how does the tightening of credit create an opportunity? Where is the upside in what most see as a tightening of credit and therefore less sales of new homes? It’s in the very fact that if you do get your spending in order, you essentially have access to finance that many don’t have. You own a scarce resource, a finance approval!
Being able to put in an offer on a piece of real estate when the competition is so low is a powerful thing. The bargains are there for you and, often, you alone. Take advantage of the situation and get in front of the game before the competition catches up.
My advice would be to free up as much cash as you can. Sell unnecessary assets to build up a deposit. Save, save, save. Then, clean up your spending for the next six months. Cut out the unnecessary purchases on your bank account.
Once done, apply for that loan and be one of the rare- breed of homebuyers with pre-approved finance in a quiet housing market. You should be guaranteed the ability to negotiate a great price and take advantage of the very thing most are fearful of, the results of the banking royal commission findings.
So, get started now, while the royal commission is fresh in our memory.
Related reading:
Banking royal commission findings: no directive to further tighten lending
