Trending Financial News 12 August

Bankwest slashes loan approval times

Bankwest has announced new mortgage approval timeframes to try and lure customers who don’t want to wait weeks for loan processing.

Commonwealth Bank owned Bankwest has cut mortgage application approval times from 13 days to 4 days. Approvals for increases to existing loans will be processed in under one day said Bankwest. Bankwest is introducing e-signatures for all bank loan documents but some paper forms from other agencies, including state government land tax forms, may still be required.

Loan processing times have increased at most banks along with tougher prudential controls on lenders. As loan rates have declined, banks have sought to compete on service.

Your credit report will detail your hardship

If you apply for, and receive, financial hardship assistance from a bank or lender, that information will soon appear on your credit report, if government amendments to the Privacy Act are passed by parliament. Currently the Privacy Act precludes disclosure of hardship arrangements in credit reports.

Financial hardship assistance can be requested if your circumstances change (you lose your job for example) and you can no longer afford to make your debt repayments.

Attorney-General Christian Porter announced that inclusion of hardship arrangements in credit reports will benefit consumers by making sure credit products are suitable.

Consumer groups are concerned that borrowers could be deterred from applying for assistance with hardship if it is included in credit reports.

Are you getting ANY interest on your deposits?

The amount of money being deposited in banks but earning little or no interest is rising.

The major banks reported in June 2019 that they had paid no interest on just under 10 per cent of the value of their (retail and wholesale) deposits according to the Reserve Bank.

The banks paid less than 0.50 percentage points in interest on another 10 per cent of their deposits, the RBA reported, up from about 5 per cent in February.

Money held in transaction accounts typically earns little or no interest. Savings account interest rates have been falling since June when the Reserve Bank began cutting interest rates.

Property market warming up for spring

Auction clearance rates have risen above 70.4 per cent (national average) on the weekend of Saturday 10 August according to CoreLogic preliminary data, albeit on low volumes.

In Sydney, 77 per cent of 324 residential property auctions produced a sale according to Domain. In Melbourne, 70 per cent of 474 auctions produced a sale. There were very few auctions in Brisbane or Adelaide.

Property analyst Louis Christopher from SQM Research told the Australian Financial Review that the results are the first signs of a property recovery and that buyers are clearly returning to the market.

Aussie homebuyers are worried

Over the first half of 2019, Australian households have increasingly become concerned about their ability to continue to afford their debt repayments, bills and expenses.

ME Bank’s latest Household Financial Comfort Report reported a decline in the availability of credit and continuing affordability concerns.

“There remains high levels of housing debt worry and actual payment stress among Australians,” said the report.

“This is largely a consequence of continued decreases in the value of residential property,” said economist Jeff Oughton.

Top Australian financial worries

44 per cent of Aussies are worried about the rising cost of necessities according to the latest Household Financial Comfort Report from ME Bank.

34 per cent of households said their number one concern is their level of cash savings on hand.

Among households with mortgages, 43 per cent said they pay about one-third of their disposable income on their loan repayments.

The highest levels of financial comfort were identified in NSW/ACT, closely followed by VIC. 

Conversely, overall comfort fell in QLD, TAS, and SA/NT, with the levels recorded by Brisbane, Perth and Adelaide residents plummeting to match the low levels reported in regional Australia.

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