A Harsh Truth About Lending In Property Investing...

I wanted to be the first to bring you some great news in the lending space. Just incase you haven't heard yet the banks are now starting to promote "new products" to investors or what we call rentvesters (people investing in a place for the best return and renting where they want to live.) It’s something I thought was going to happen, and now that it has I’m thrilled.

As you probably know in 2017 APRA put pressure on the banks to make lending more challenging. In APRA's defense, they wanted to see how they could control the market and they have.

*They minimised the number of loans that can be given on interest-free terms vs. principle and interest

*They increased the amount of expenses applied as a minimum

The banks have realised that they haven/t been able to write as much business with the restrictions that were in place. They lost so much of the market, which has forced them to evaluate the market and where they can pick up more market share.

Like the real estate market, lending goes in cycles and they are starting to ease back.

Wayne Byres from APRA said the restrictions they put on were only meant to be temporary, but they’re happy with the quality of lending and the risk standards. The onus is now on the banks to keep going.

What does this mean for us as investors?

It means we’ll look back in a decade at 2018 as a key-investing window. Many investors have left the market and yet suddenly with this shift in lending, it’s ‘game on’ again. Those who get in first will reap the biggest rewards.

Now, this doesn’t mean the banks are going out with all guns blazing. I’d say their lending is going to be

more ‘moderate’ instead of ‘restrictive’. What we can help you with is the right strategy in place we can do amazing things while this window is open.

Here are 3 things I recommend you do right now:

1.     Follow our research on what the market is doing. And do your own research too.

2.     Get ‘bank-ready’ – consolidate credit card debts or better still, pay them off. Same with personal loans and get your properties valued so you know how much equity you have.

3.     Talk with a mortgage broker about reducing the interest you’re paying, and how much equity you could pull out to invest, they can help you.

If you don’t have a mortgage broker who understands investing then get in touch and we will put you in touch with someone.