Loan Arranger Gives Singles A Hand
Sun Herald
Sunday October 20, 2002
WHEN Helen was planning to buy her first property at the age of 25, she was knocked back for a loan even though she had a hefty deposit.
``When I asked the manager why, he didn't really have a good enough answer," said Helen, now 38. She walked into her local bank the following day and closed the account she had held there since she was six years old.
``I had been in the same job for five years, my deposit was 25 per cent, the property was solid and I had a good credit rating with no credit card debts and no defaults on my car loan.
``It was really tough to get a loan in those days if you were a single woman. I went to a few other institutions and was given the same treatment before settling on a building society which gave me a better rate and never questioned my ability to meet the loan repayments."
Similarly, when Jessica and James wanted to buy an inner-city apartment eight years ago, they applied to their local bank for a loan, believing it would be a fait accompli.
After all, she was earning a good salary and had been in full-time employment for a number of years. Her partner was working as a freelance comedy writer, which she didn't think should pose a problem. How wrong she was.
``Even though I had a great job, the loan requirements were judged on his salary, not mine, and we were rejected," she said. ``Several years later we applied again and were successful. James is still doing his contract work but it was my salary that secured the loan."
It seems that times have changed for single women who are shopping around for a mortgage.
Mortgage Choice broker Steven Alward said: ``The market is much more sophisticated these days and, in my experience, single women are treated exactly the same way as single men or couples. They have to meet all the same criteria, such as a good savings record, steady employment, a deposit of at least 5pc, plus enough to cover costs [usually 5pc of the property price] and stable residency that is, not moving around every few months.
``They must have a good credit rating, which means not defaulting on anything from a credit card to a mobile phone. Going into arrears on cards and phones is quite common and can seriously affect your credit rating.
``If single women meet all of the above conditions then there should be no problem in securing a loan. This is very different to how it was a while ago. Now there are strict anti-discrimination laws in place, there are more women in the workplace, more women in good positions where they can earn a decent income and build up their savings plus the first home owners grant has also helped women to buy a slice of the property pie.
``Since the market was deregulated, there are also many more lenders who are aggressively trying to get new business so if one person won't lend to you, others will. If you have been knocked back time and again, however, and you then find an institution which says yes then you do need to start wondering why."
Australian Consumers' Association finance policy officer Catherine Wolthuizen agreed. She said if women were finding it difficult to borrow on a single income, then they needed to be cautious about obtaining a non-conforming loan.
``Some of them have higher interest rates and some have more stringent conditions," she said. ``The question is, `What is the cost?', as these people are taking you on for a reason. My advice is to make sure you read the fine print very carefully.
``Women should also be wary of making multiple applications for credit if they are getting knocked back because it may affect their credit rating."
© 2002 Sun Herald
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