COVID-19 was an unexpected surprise in 2020, as many of us shifted from our daily life in an office to working from home and juggling the work-life balance. So it’s no surprise that people are looking for new places with an office set-up or a guest room to transform into multi-purpose space.
There are limited properties available for sale in metro Melbourne, so you may have noticed the property prices have increased significantly. It’s not just metro Melbourne though – with new flexible working arrangements and previous hard lockdown restrictions, many people are also seeking better lifestyle arrangements and choosing to live interstate or in regional Victoria.
On the other side of the coin, some people have been made redundant and in particular, we have found small businesses affected the most with significantly reduced monthly profits or being forced to shut shop.
With demand continuing to increase across the board, it comes as no surprise that home loan applications are taking longer to be processed by your bank.
What has changed?
With the increase in concern for health and hygiene, many Australian businesses, including Woolworths, have suspended cash transactions, forcing Australians into a cashless society. It has caused many of us to prefer using EFTPOS, buy-now-pay-later services and online shopping. There is often less concern over spending habits and more desire to be comfortable but it is important to remember that these costs can add up.
How has COVID-19 affected lending?
COVID-19 has affected the finance industry drastically and many things have changed and adapted to suit restrictions and health orders.
One of the biggest benefits is the way brokers interact with their customers, it that is now more digital. Some of the changes include:
- Banks now accept online digital signatures.
- Witnessing of documentation can now be completed by your mortgage broker electronically.
- All documentation can be processed electronically with no paper or postage.
- No more booking in times with your broker or branch to complete transactions including loan preparation and submission, loan sign up and post-settlement loan variations.
- ID verification can also be completed remotely.
Understandably with the current economic environment, one of the biggest downfalls is that lenders have become narrow with their lending criteria for certain industries. Some of the non-preferred industries currently include:
To assist the above industries and other industries, the federal government has introduced a JobKeeper and JobSeeker payment scheme.
On top of this, the banks are also offering payment pauses on all loans. This means that monthly commitments will pause momentarily until you find new employment. The only downside to pausing your monthly commitment is the increased monthly repayments post the pause period.
How can we help you apply for a home loan?
With the stricter lending policy, it is extremely important to touch base with your finance broker now more than ever. At Melbourne Finance, we are in a position where we have many lending solutions for your financial needs. We want to make sure you have the correct product in the market, so even if you haven’t been affected by the pandemic get in touch with us for a confidential chat.