Australia’s banks are beginning to loosen their credit criteria, the head of a mortgage brokerage firm has claimed.
Smartline’s managing director Chris Acret said the banks are now looking favourably at a variety of income types when considering home loan applications.
“While overtime, bonuses and second jobs used to be regularly accepted by lenders, unfortunately this changed when the GFC hit,” he said.
“Those with casual or contract employment or who were self-employed also found it much more difficult to secure home financing as banks becoming very risk adverse.
“Thankfully, lenders are increasingly ‘normalising’ their lending criteria and while we haven’t yet returned to pre-GFC levels, it’s moving in the right direction.”
Mr Acret said lenders were now considering the income of a person working in a temporary, casual or contract position after three months, particularly if they work in certain roles, such as an accountant, teacher, nurse or engineer.
“The full-time position that was guaranteed for life is slowly becoming less and less relevant as both employers and employees look for greater flexibility in the workplace and in their lives,” he said.
Mr Acret's comments come shortly after global investment bank Credit Suisse claimed the banks, facing sluggish lending growth, are becoming more desperate for business and are in danger of again embracing the dangerous lending standards that led to the collapse of banks elsewhere in the financial crisis.