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Banks Look For Reasons To Say No; Credit Connect Group Looks For Reasons To Say Yes

Approved Rejected-2

Australia’s principal banker has called out the banks for their unwillingness to approve mortgages.

Reserve Bank of Australia governor Phillip Lowe said the banks now "had less appetite to lend" than back in 2016, when the east-coast property boom was in full swing.

"There has been a significant tightening in lending standards,” Dr Lowe said, in remarks reported by the Australian Financial Review.

“In some respects, it seems institutions have become excessively risk averse."

Over the past two years, Australia’s mainstream banks have implemented a credit squeeze, which has included ridiculously inflexible lending criteria. Whenever borrowers have complained, the banks’ response has always been the same: the regulators have made us do it.

Yes, it is true that Australia’s regulators asked the banks to be a bit more prudent in their lending assessments. However, as Dr Lowe has now made clear, the banks went much further than required. They weren’t forced to tighten their lending standards so savagely; they chose this path of their own accord.

“The supply of credit,” Dr Lowe added, “is less than it was a few years ago.”


We say yes to borrowers with good risk profiles

Responsible lending is good. Inflexible lending is bad. Thankfully, Credit Connect Group knows the difference.

Since opening our doors in 2006, Credit Connect Group has built a reputation with brokers and borrowers for its common-sense approach to lending.

As Dr Lowe alluded to, the “risk averse” banks have been taking a one-size-fits-all approach to mortgage applications.

We’ve lost count of the number of brokers who’ve told us about good clients who’ve had applications rejected because of minor objections.

That’s why brokers find Credit Connect Group such a breath of fresh air. When they bring their clients to us, we treat those borrowers as individuals and judge them according to flexible criteria. We also pay close attention to any arguments that brokers make on their clients’ behalf. Of course, we don’t approve every loan – that would be irresponsible. But we say yes to borrowers with good risk profiles.


Credit Connect Group’s lending criteria

Here are the seven key things brokers and borrowers need to know about Credit Connect Group’s lending criteria:

  • Australian real estate security is required
  • The maximum LVR is 70% for residential property and 65% for commercial
  • Loans are interest-only
  • Loan terms last up to 36 months
  • Residential loans range from $100,000 to $1 million
  • Commercial loans range from $100,000 to $50 million
  • Loans are funded by Credit Connect or our panel of investors
  • Development Loans to $50 million

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