The RBA considers a range of global and domestic economic factors when deciding whether to hold, cut or lift the cash rate. The property market, the Australian economy, the nation’s inflation rate, and the nation’s unemployment rate would all play a part in the RBA’s decision.
The RBA would also consider global economic activity. At its March meeting, the US Federal Reserve chose to hold the Fed funds rate at 2.25-2.50%.
The RBA board is paying close attention to the nation’s dwelling values, which have been declining for some time. The most recent CoreLogic Hedonic Home Value Index revealed that national dwelling values fell by 0.6% over March and have fallen by a cumulative 7.4% since peaking in October 2017.
Furthermore, National Australia Bank’s most recent Monthly Business Survey points to deteriorating business conditions. Similarly, the Westpac Melbourne Institute Index of Consumer Sentiment revealed the weakest consumer mood since September 2017.
It’s never been more important for borrowers to speak to a mortgage broker to ensure their home loan applications are as tight as possible. The reality is that lenders are going to call out any and all undeclared living expenses on home loan applications, which can significantly delay loan approvals.
Preparing for a home loan application today is not as simple as saving for a deposit. Prospective buyers, and those looking to refinance their loans, should be: cutting back on discretionary spending at least 6 months ahead; closing credit cards that are no longer being used and reducing limits where possible; and knowing where they are spending every dollar.
The good news for anyone looking to buy is that lenders are aggressively competing for low risk borrowers, which means it’s a great time to get financially fit and learn what your options are.
If you are looking to apply for a home loan this year and need to get home buying ready, speak to your local Mortgage Choice mortgage broker. A broker will assess your financial situation in the same way a lender would and give you a clear indication of your borrowing power. When the time comes your broker can help you prepare a home loan application that has the best chance of being viewed favourably by the lender you choose.