Changes to the LVR restrictions
Exciting news announced this week regarding changes to the loan to value (LVR) ratio requirements.
They first key change is the amount of banks loan books they can lend to low deposit buyers (buyers with less than 20% deposit). Banks can now loan 20% of their available funds to low deposit borrowers. This should be good news for many first home buyers.
What we are seeing is a queue of young, first home buyers who are trying to take advantage of that low deposit area. The banks have made it harder to be eligible to gain access to those funds, meaning that if you have issues with your credit history, poor account credit, or are tight on affordability, then you will not qualify to have access to that 20% low deposit borrowing.
What we are hoping, is that now the bank can loan more money to people in that low deposit borrowing area, some of these previously ineligible people can now get back in the queue and achieve their goal of home ownership.
Another change implemented this week benefits investors, with them previously requiring 35% equity to purchase investment property. This is now reduce to 30%, making it slightly easier. While this isn’t a huge change, we are hoping they will continue to relax the rules to make things easier in the investment market.
If you have any questions around these new rules, give me a call on 027 886 4934