A recent survey by Lender Mortgage Insurer, QBE, gives some interesting statistics. In March this year First Home Buyer (FHB) activity dropped to it’s lowest level in 6 years. It reached it’s all time high in May 2009 when FHB activity represented 28.5% of the home loan market.
$359,786 – The average FHB Loan size
60% – The proportion that believes they will have trouble making their repayments due to the increased cost of living.
60% – The proportion that consider the interest rate to be the most important consideration in choosing a mortgage.
76% – The proportion of FHB’s that want to buy a pre-existing house.
With changes to legislation around responsible lending, we are finding it increasingly difficult to obtain home loan finance for older borrowers. No longer are lenders keen to provide a 30 year loan term to someone over the age of 50.
The Banks want to know how the loan is going to be repaid and downsizing and moving to something smaller is no longer an acceptable “exit” strategy.
Just this week we have applied for a loan for clients, 51 and 53, who have a small capital base and need to ensure that at the end of the day, they have a home to live in.
So if you are in this age demographic, give some thought to how you will repay a debt that may be remaining on retirement.