Monday, July 27 2015
As I flagged back in my article in May there is a major problem looming for off the plan unit buyers.
An article in the Fin Review this week also highlighted the issue
A number of major lenders have just pulled the rug out from under the feet of unit buyers and potentially left them high and dry. "This is causing alarm across the industry," said Tim Brown, chief executive of the Mortgage and Financing Association told the Australian Financial Review.
"Many of these are first-time buyers who will not be able to fulfil their finance obligation under the contract and will lose their deposit as many of the banks will not finance any investment loan over 80% and in some cases will not lend on investment at all," Tim Brown said.
Having put down a 10% deposit, apartment buyers typically arrange finance for the rest as the apartment nears completion - now set to find that finance has become both more expensive and harder to secure.
Many lenders will no longer accept a 10% deposit and now require minimum 20% purchaser funding. The tests for loan servicing have now also substantially changed meaning people may now qualify for significantly less than at the time they signed a contract.
Some lenders have also basically said they will not honour previous approvals. So buyers who thought they had their lending locked in may also be in for a rude shock.
With people not being able to settle this could have a substantial negative impact on unit prices as contracts fall over.
If you have bought a unit off the plan you need to have your situation reviewd as a matter of urgency to assess your options. Contact us today for an assessment.