In response to the COVID
In response to the COVID-19 crisis, there’s been a few changes and announcements in the past few days that Australian Home Owners and business owners should be aware of. Here are four important ones:
Banks announce good and bad news
Landlords incentivised to help commercial tenants
First home buyers extension
Government launches Jobs Hub
If you’re confused or concerned about anything, it’s important to get expert help so please reach out.
Banks change policy for home loans, business loans, credit cards
Lenders across the country are changing the way they handle loans in response to the unfolding coronavirus crisis.
One of the biggest announcements has been that any borrowers who are granted a six-month deferral on loan repayments will not have their credit rating affected as a result of the holiday, so long as they were up to date with repayments prior to the economic impact of COVID-19.
Furthermore, some banks have announced new changes, including:
Reducing interest rates, reducing minimum monthly payments and refunding late fees for credit card customers
Waiving merchant fees for small business customers
Increasing the number of businesses eligible for loan repayment holidays
One lender has even announced that it will make a one-off interest refund to homeowners who have deferred their mortgage repayments.
Hardship
Struggling to repay your loan? In that case, the sooner you contact your lender, the better. You can do it by phone (which might involve a long wait) or over the internet.
New loans
Some banks are now taking longer to process mortgage applications because:
They’re prioritising customers who need hardship relief
They’ve received a lot of refinance applications from borrowers who want to take advantage of record-low interest rates
Some banks are also adjusting their policies about how they lend money:
Reassessing the risk for people that work in certain industries
Looking closely at the value of your property
Identification Requirements
Many lenders now no longer expect brokers to have face-to-face meetings with clients for identification purposes. Most lenders will now let me verify your ID remotely and we can use e-signatures to complete the paperwork - so you can apply for a loan without putting your health at risk.
Banks offer to help landlords help tenants
Banks have offered a loan repayment holiday to commercial property landlords on condition they extend relief to their tenants.
Commercial landlords with total business loan facilities of up to $10 million will now be able to defer repayments for loans attached to their business for six months.
In return, landlords must promise that during this grace period they will not terminate leases or evict current tenants for rent arrears as a result of COVID-19.
Other conditions include:
Landlords must contact their lender and opt-in to the scheme
They must have been meeting their loan conditions up to 90 days before applying
Their business must have been affected by COVID-19
The interest they don’t pay during the grace period will be added to their loan
ScoMo makes first home buyer scheme more flexible
Australians who are participating in the federal government’s first home buyer scheme may now be given 180 days to find a property instead of 90 days.
Under the original rules of the First Home Loan Deposit Scheme, buyers who had been pre-approved had 90 days to find a property and enter a contract of sale.
However, now that social distancing has made it harder to inspect properties, the agency running the scheme said first home buyers might now be eligible for a 90-day extension.
The National Housing Finance and Investment Corporation has advised borrowers to contact their lender to see if they’re eligible for an extension.
“We recommend that you do so at least two weeks prior to the expiry of your pre-approval to allow your participating lender sufficient time to determine whether you are in fact eligible and process your extension request.”
The First Home Loan Deposit Scheme allows eligible buyers to enter the market with just a 5% deposit and not have to pay lender’s mortgage insurance (LMI), as the government acts as guarantor.
Lost your job? Check out the new Jobs Hub
The new Jobs Hub is part of the government’s response to the coronavirus crisis, which has resulted in some businesses laying off staff and others urgently searching for workers to cater for big increases in demand.
Job seekers can search for jobs based on type and location, and can also filter for employers with multiple job opportunities.
Employers who need workers fast can email the Jobs Hub contact center at workforce@dese.gov.au.
Sectors that are hiring right now include healthcare, transport and logistics, some areas of retail, mining, mining services, manufacturing, agriculture and government.
Disclaimer: The advice provided in this article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. We encourage you to consult a finance professional before acting on any advice provided in this article or on this website.
