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New Loan Requirements – COVID19

Buying and selling property is changing amongst the COVD19 restrictions and our new way of life.  We have, of course, no option but to accept and change with it. One of the areas which will affect the purchase of your home is whether you will be able to get finance and this is an area that that is ever-changing, so it is important that purchasers are kept up to date by their financial advisers and brokers, and of course that they obtain legal advice before proceeding to commit to the purchase of a property. I have been speaking to brokers in my business circle and reading information in this respect. This is a brief outline of what I am reading and being told:

  • If you are working in an industry that has been heavily affected by COVID-19, your income will be assessed and accepted on a case by case basis.
  • Lenders are looking at non-base income (bonus, commissions, overtime, allowances) more aggressively, and reducing the amount they will accept from 80% to 50-60%.
  • Most casual income is not being accepted right now – especially in impacted industries.
  • If you are self-employed and have been pre-approved based on your 2018 or 2019 tax returns, you might be asked by the lender to provide an additional BAS to support income figures.
  • Even if you have already been approved and are proceeding to settlement, lenders are doing employment checks to re-assess if there have been any changes to the application and may remove finance altogether.  This certainly may delay settlement.
  • If you are in an industry that is heavily impacted, such as tourism, gyms, retail, travel, hospitality, real estate, entertainment and manufacturing, Mortgage Insurance providers are not considering these applications.


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