Australian Home Loan arrears that are greater-than-30 days  remained stable at 1.69 per cent in July 2011.

According to a report published by Standard & Poors Ratings Services, non conforming home loan arrears including bad credit home loan arrears increased by 52 basis points to 12.18 per cent, with $1.63 billion in subprime RMBS outstanding, which is down by around $282 million in July compared to June 2011.

It seems that borrowers who are self employed are most significantly exposed to the risk or arrears on their loans.
Clearly the current economic conditions in Australia have a lot to do with cash flow problems experienced by the self employed borrowers.

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This week will be a big one for investors, policymakers, home loan customers and first-home buyers as the Reserve Bank of Australia (RBA) prepares to make its next decision on whether to lower interest rates again.

But the Sydney Morning Herald reports that while one eye will be focused on the RBA on Tuesday (February 3rd), many people are apprehensive about official data out on the same day which could show that the country has slipped into a recession.

Speaking to the paper, a panel of experts said that the RBA is likely to pull down interest rates to an even three per cent, an event that is likely to be met with some joy among those looking to compare home loans and get on the property ladder.

Those on a variable rate home loan will also see their average repayments fall, which may make a possible recession slightly easier to bear.

It may also prove an opportune time to compare home loans and lock yourself into a fixed rate deal after some experts warned that the RBA is running out of room to make further interest rate cuts.

Bank customers with high credit card limits are less likely to be approved for a home loan, an expert has said.

Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, told the Australian Associated Press (AAP) that lenders consider a high card limit to reduce a borrower’s capacity to repay a mortgage.

She added that lenders were not concerned with the amount a customer owed on a card, only the total that they could be liable for if they spent on it to the maximum.

“A borrower may only owe $1,000 on a limit of $15,000, but lenders must assume that the borrower can owe that $15,000 the day after settlement, placing them in a potential hardship position,” Ms Montgomery told the news provider.

The advice will be of interest to anyone who decides to compare credit cards or compare home loans. M

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