The new CCCFA rules came to effect on 1 December 2021 which heavily impact the property market in the last 8 months. The government made some changes and clarifications in July which may impact borrowers. The key changes are as follows:
- Clarifying that when borrowers provide a detailed breakdown of future living expenses there is no need to inquire into current living expenses from recent bank transactions.
- Removal of regular ‘savings’ and ‘investments’ as examples of outgoings that lenders need to inquire into when completing an affordability assessment.
- Clarifying that the requirement to obtain information in ‘sufficient detail’ only relates to information provided by borrowers directly (i.e. through conversations with a borrower) rather than relating to information from bank transaction records.
- Providing alternative guidance and examples for when a loan is ‘obviously’ affordable, meaning an affordability assessment is not required.
Item 1, and 2 have a big impact on the lending process which is implemented since December. General feedback is these changes and clarification are positive but not enough in the way people can borrow easily from banks. In general a bit relaxation in terms of lending but still more complex from the time this act become active.
At the moment even the lending situation is complex but people take an opportunity to do right approach in their finance, income & spending and get their home loan approval. If you need any help you can contact me here.