There may be a higher price to pay for any coffees you purchased that week or dinners you had delivered.
Banks and credit unions closely monitor the daily spending habits of potential customers for loans – shopping with Afterpay, food deliveries, daily splurges, and entertainment are all scrutinized.
This scrutiny of borrowing has especially intensified amid the fallout from the Royal Banking Commission, according to Brisbane mortgage broker Steve Moore.
“This is the hardest it has been in the past 15 years – even harder than during the global financial crisis,” he said. Rebecca Levingston of ABC Radio Brisbane.
“The focus is on living expenses, and they’ve never focused on that in the past.”
Mr Moore said most banks, including the Big Four, look for where and when you spend money.
“They look at your daily coffee and assume it will continue to do so in the future,” he said.
“What they don’t think about is that people are living within their means and adjusting after getting into debt.
Look at your living expenses
Mr. Moore said many credit unions and banks are looking at your statements to try to calculate future living expenses.
He added that small lenders go further than others.
Currently, most applications that fall into a gray area tend not to be approved.
“The lack of loans will also potentially lead to declines on the construction side,” Moore said.
“If people can’t qualify to buy these new properties, it will trickle down to builders and traders as well. “
ANZ and NAB bosses said at a parliamentary hearing earlier this year that they were willing to lend, as part of a greater focus on responsible lending after the royal banking commission.
ANZ’s Shayne Elliott said the ensuing debate over responsible lending caused banks to become more conservative.
“As a result, Australians … some, not all, will have a little more trouble getting credit or getting the amount of credit they otherwise would have had in the past or want, and I’m not suggesting a minute that’s wrong, it’s just reality. “
Difficult times getting a loan
Calls to ABC Radio Brisbane expressed their frustrations at the difficulty of obtaining a loan.
“It was horrible, and if you are self-employed it is difficult. We have been doing business with our bank for over 25 years and we had money in the bank and we already owned several houses. went to get a mortgage, it was just “no, no, no.” Well, our bank said we would need a 40 percent deposit. We had never defaulted on a mortgage. ” – Robyn from Brisbane
“We tried to get a loan of $ 40,000, but we were turned down because of the expenses of the previous three months, as well as the fact that my wife was not working enough hours. The house is paid and we have over $ 700,000 in cash and super and a combined income of $ 130,000. My wife is furious and she wants to take all the money out of the bank right away. ” – Maryborough Stone
“We refinanced and got, but late on a credit card, the first time in 15 years, and I had to write them a letter explaining why. We have more equity in the loan and we have money in the bank to pay off the loan and we’re not at risk, but it was so difficult and it’s still not finalized. ” – Scott of Mount Warren Park
“We paid for our house and wanted to buy a new car, but I think we have no hope of getting a loan now. I work occasional but reliable hours as a doctor, but that doesn’t even matter. will now have to save for our car, it’s not worth the stress. ” – Toowoomba Stone
How can you improve your chances?
Mr Moore said most lenders will take a close look at your last three months of spending when you apply for a loan.
- Do your research and talk to someone who has done it before – you really can’t have enough information on this just yet.
- Check what you spend on Afterpay or Zip and have those expenses reimbursed or cancel the account.
- If you have credit cards, lower the card limits or cancel them all together. Lenders assume that you are going to withdraw from this card and apply a repayment to it which will affect your borrowing capacity.
- Monitor your spending for the three months before you apply for a loan.