16 March 2017
Many lenders have tightened ability to transfer loans from Principal and interest to interest only.
ING announced this week that effective immediately, existing ING DIRECT home loan customers who request a switch from Principal and Interest repayments to Interest Only will be subject to a full assessment of their financial position. This involves providing the following documents to accompany the loan variation request: Employment details, assets and liabilities, income and expenses, and up-to-date evidence of applicant income.
In addition during 2016 a number of Australian banks tightened or withdrew from lending to overseas borrowers. This tightening has led to a substantial increase in Overseas Borrower Loan applications received by Citi. To maintain a balanced portfolio, and to ensure they can maintain adequate loan processing times, Citi will now only offer Overseas Loans to Citi’s existing and prospective Citigold clients. An Overseas Loan is defined as a loan where the serviceability test relies on Foreign Currency Income OR FIRB approval is required.