Home loan credit rules set to tighten

Credit underwriting standards for home loans will tighten further this year, a study has suggested.

The investment bank UBS surveyed loan officers in all of Australia’s major and regional banks. It found that most expected a hardening of credit standards over the next six months, with home borrowers particularly affected, the Australian Associated Press (AAP) reported.

In addition, the survey revealed that credit underwriting standards had been tightened more for consumers than for businesses during the last six months of 2009.

Home loan buyers incurred additional costs in terms of a tightening of loan pricing, followed by non-interest fees and collateral requirements, the AAP noted.

The news may encourage bank customers to compare home loans as securing credit becomes more difficult. This week the Herald Sun reported that about 350,000 Victorians currently have blacklisted credit reports for failing to pay utility bills, skipping loan repayments or declaring bankruptcy.

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