Home Loan Borrowing Capacity Cut By 42% Under Suggested Changes!
Graham Doessel - CEO - MyCRA (Specialist Credit Repair) Lawyers (LPH) | April 05, 2018
Hmmm... Is this the biggest bag of BS you've ever seen or what?
The following story on ABC suggests someone on $80,000 PA will have their borrowing capacity cut to $195,912... (see original story here)
A mortgage of $195,912 over 30 years at 3.99% has repayments at approx $929.84 per month, $11,158.08 per year or (and here's the kicker), average weekly repayments of just $214.58!
Can anyone tell me where you can get rent in Brisbane, Sydney, Melbourne or Perth etc, at $214.58? People have the capacity to pay their rent, plus save for a deposit.
https://www.expatistan.com/cost-of-living/brisbane has the rent in Brisbane for 85sm between $1,804 (average) and $2,329 (expensive).
It's already hard enough for first home buyers, now having their borrowing capacity slashed by almost half looks like making the Aussie dream just that - only a dream!
That's a minimum of double and almost triple the amount this ABC story suggests consumers will be 'allowed' to spend on mortgage repayments...
All this sort of idiocy will do is drive down real estate prices, throw the market into turmoil, drive rents down, destroy the investment market even quicker, and probably push the entire country into a recession.
And WE allow these types people to dictate to us - People who have no idea of what is really happening at the coal face but sit in their ivory towers making decisions and policy without proper consultation.
The story talks about the banks "misconduct being more severe" than initially thought and while this may be the case, if we look at the total number of cases of unconscionable conduct, compared to the number of good quality mortgages written, by good honest people, for good honest people, the dodgy brokers and banking staff are in the minority.
So I ask the question, WHY should the majority of good honest mortgage brokers have their financial throats cut, and good honest consumers desperate (but not vulnerable) to get out of the rent race and secure the fair and reasonable Aussie dream of home ownership, be victimised because of a few greedy banks and brokers that have done the wrong thing?
Wouldn't it be a better idea to look at actualities, look at what a specific client is really spending on their living expenses and use the truth? I think if you asked someone who was saving for a deposit so they could buy their first home what they spent on living expenses, I think you'd probably find the truth to be much lower than the HEM. And why? because they have a goal to buy their home!
The stress and strain of this sort of limited thinking will destroy families!
Perhaps more education in budgeting and financial literacy would be a better solution?
What about taking a poll of every mortgage broker in Australia with more than three years practical experience, asking serious questions about their clients.
What about a poll of every person that has entered into a mortgage in the last five years to discover how they can even pay their mortgages as this report suggests they are up to 42% overcommitted. Ask these same people if they'd like to see their borrowing capacity reduced by up to 42%? Where is the common sense in this discussion? It seems to be even less common than the normal lack of it!
Academics talking to academics about issues (supposedly) researched, with a predetermined outcome or agenda is NEVER going deliver a balanced viewpoint!
If you're already struggling to buy a home because of bad credit, get in now while you still can, call MyCRA Lawyers on 1300 667 218 to get your credit rating cleaned up and buy your home while you still can!