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  • 95% lending

    Interesting meeting with a couple of Banks this morning. 95% lending definitely back on the cards and fees a lot lower than Kiwibank too. Usual caveats, saved deposit, good incomes and minimal outside debt.
    www.ilender.co.nz
    Financial Paramedics

  • #2
    Will be a trend to watch, methinks.
    The knock-on effects will also be
    quite intriguing. Does this change
    of heart
    indicate that people are
    still shying away from new debt
    whilst paying down existing loans
    .
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    • #3
      ASB has changed their lending criteria for new home lenders to 95% but it's not widely known - yet. The Bank worked out when they tightened the lending criteria, it just killed ANYBODY being able to borrow.

      Any Bank has to lend money to make money and when the Bank looked into the future, their profitability would drop if they didn't relax their LVR's now.

      ASB has also got a new Spring deal type of thing coming out within the next fortnight. I haven't been told the details, but the impression I got was that it would also be for FHB's.

      The Banks (in general) don't want Mum & Dad investors to leap back on the borrowing band-wagon, so that we (Nationally) get back into the over-heated property cycle again.

      It's going back to the more responsible lending criteria that was in place for a long time, until Banks got silly about 4-6 years ago and would lend to anybody that could breathe.

      A more measured approach to lending is well overdue.
      Patience is a virtue.

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      • #4
        Originally posted by brokerman View Post
        Interesting meeting with a couple of Banks this morning. 95% lending definitely back on the cards and fees a lot lower than Kiwibank too. Usual caveats, saved deposit, good incomes and minimal outside debt.
        Are you referring to 95% lending re investment properties? Is that definite or are we talking 1st timers/Ma and Pa? Thanks.

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        • #5
          Originally posted by Learning Landlord View Post
          Are you referring to 95% lending re investment properties? Is that definite or are we talking 1st timers/Ma and Pa? Thanks.
          Not investment!
          www.ilender.co.nz
          Financial Paramedics

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          • #6
            Will they do 80% investment?

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            • #7
              Originally posted by brokerman View Post
              Interesting meeting with a couple of Banks this morning. 95% lending definitely back on the cards and fees a lot lower than Kiwibank too. Usual caveats, saved deposit, good incomes and minimal outside debt.

              When you say, “minimum outside debt.” What was that percentage compared to your income?

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              • #8
                Originally posted by Viking View Post
                Will they do 80% investment?
                We have had no problem getting up to 85% ie only having 15% deposit for investment builds. Actually sign one off tomorrow. Tried a broker but was told they couldnt get as good a deal as the bank offered us directly.

                Would be interesting to hear more about the details on the '95%' mentioned earlier.

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                • #9
                  95% is owner occupied standard house, no apartments! Good servicing and minimal debt is probably $5/10K. The Bank self insure so the LMI is around half that of KB and can be added. This is good news because up to now QBE and Genworth rates are extortionate and competition may bring them down.

                  For standalone investment property the norm is 70% but there are always exceptions, existing relationships, additional security and NZF for example will go to 90%, at a price.

                  Overall I think we are seeing a thawing of criteria which is what we need, ASB are coming out with a range of new products pretty soon, meant to be 'market leading' as they say.
                  www.ilender.co.nz
                  Financial Paramedics

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                  • #10
                    Originally posted by brokerman View Post
                    Overall I think we are seeing a thawing of criteria which is what we need. ASB are coming out with a range of new products pretty soon. Meant to be 'market leading,' as they say.
                    Perhaps you'll have some observations to offer
                    on the commentary in this thread? The nub is:
                    why risk churn by not offering special deals to
                    existing borrowers (instead of new ones, only)

                    I'm presently pondering some arm-twisting of
                    ASB, using the Manchester Unity Credit Union
                    as the potential competition. They too have
                    a promotion in the wings. I don't have details,
                    but it's some sort of interest-free period, AFAIK.

                    There's also a $300k limit and 80% LVR, so
                    that'd likely make it a non-option for many PIs.
                    .
                    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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                    • #11
                      I guess its always a question of 'if you don't ask you don't get'.

                      ASB being a conservative bunch will probably target first home owners and those with good deposits in their product review. I agree with above, can't see them encouraging too much investment.
                      www.ilender.co.nz
                      Financial Paramedics

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                      • #12
                        I got Kiwibank to give me 90% on an Investment Property last year when times were a lot tighter than now, the broker said they "Liked me".

                        That was about the same time that it was all in the news about how all the banks cut down to 70% for IP's.

                        So if they percieve you are in a strong positon and you have a great relationship with them, who knows what you can get.

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                        • #13
                          BNZ will also look at doing 95% for investment property. Will charge you a margin on the interest rates of 1% though.
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                          • #14
                            Originally posted by mortgage broker View Post
                            BNZ will also look at doing 95% for investment property. Will charge you a margin on the interest rates of 1% though.
                            Interesting, do you think they could do 95% on a top up loan, but leave the rest at normal rate ?

                            I wouldnt mind an extra 1% if it was on my top up which I used as a R/C and used as required for trading as it would be used for short term 4 to 8 week blasts.

                            Would meen a significantly larger R/C loan than 80%.

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                            • #15
                              So 1st time buyer friends of mine got loan last week (National) 15% deposit. Half a mill mortgage! Let the good times roll.

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