Banks ease credit criteria

Banks ease credit criteria

30 May 2012 by Staff Reporter 1 comments

Staff Reporter

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.

Staff Reporter

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.

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2016

With a combined sales volume of $13 billion in 2016, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
William Phillips on how agents can expand their database and grow their business

Get up close and personal with the best real estate sales agents in Australia in Secrets of the Top 100 Agents. ...

View all podcasts

Are dodgy agents being punished enough?

Yes (8.6%)
No (55%)
Only in some states (2.3%)
Not all dodgy agents are being found out (34.1%)

Total votes: 220
The voting for this poll has ended on: April 15, 2017
upcoming events
REB Awards
Sydney The Event Centre 12 Sep
REB Awards
Sydney The Event Centre 12 Sep
Melbourne The Event Centre 14 Oct
Brisbane The Event Centre 18 Dec
View all events
Do you have an industry update?