There is now a real sense of urgency in much of this discussion.
The penny has dropped and i'd say that there's less than 1 month (less than 2 weeks perhaps) before we may start seeing Macquarie and NAB have a real wind back of their servicing assessment calculators. Once this is applied, it will mean the majority major banks will have all moved towards a very conservative servicing model.
Excluding some of the non-banks from the equation, this could mean that investors have only two weeks to 'take your money' out. The following circumstances are most urgent:
1. Equity releases: Borrowing power calculators are tightening up and there may be a scenario where there will be no actual repayment lenders. If you've got multiple properties, your borrowing wall has now come from 'a long way into the distance' to something you passed a couple properties ago. Releasing equity to be used as a buffer for any further tightening/moving to P&I repayments is also a good idea. Having cash AVAILABLE to you is a premium.
2. OTP settling within 3 months: this is a scary one as it could theoretically leave people high and dry (lost deposits
). If you're settling within 3 months, best to get a pre-approval. I believe AMP did 6 months pre-approvals but they've already tightened.
3. I/O extensions (with banks other than CBA/Westpac): If you're about to roll over to a P&I period with plenty of actual repayment lenders, you may not be able to roll this over under a new full assessment of your scenario. This could be a serious drain on your cash flow. More info here:
http://somersoft.com/forums/showpost.php?p=1308099&postcount=1
4. Property purchases in the next few months: For those investors looking to purchase and have marginal servicing - it may be best to go and obtain a pre-approval. There's no guarantee that the banks will honour them - but i've had some initial conversations with NAB and Macquarie saying they will. Usually some brokers don't like doing pre-approvals, but during uncertain financing conditions they are very valuable tool to extract that last property out/drag the period out further.
I suspect the investment brokers here are having one of their busiest periods yet (or are about to), followed by potentially a long holiday! The Sydney brokers i've spoken to here have had pretty similar stories!
Cheers,
Redom