Changes are afoot for the Credit Contracts and Consumer Finance Act which may or may not be good. Photo / Getty Images
OPINION
It's interesting to see some mortgage brokers reporting they have seen a surge of inquiries since news that funding criteria to help first home buyers get on the property ladder is about to loosen.
A lot of the hoopla, in my view, can be accredited to price cap liftsfor First Home Grants, when on the other hand it seems the Credit Contracts and Consumer Finance Act (CCCFA) noose may in fact get tighter.
Banks have faced customer outrage by trawling through people's statements with a fine-tooth comb.
People did not appreciate their spending coming under the microscope, such as how many times they dined out, what flutters they took at the race course, or how indulgent their shopping sprees were.
Some home loan applications were consequently thrown on the scrap heap and people became increasingly alarmed as other expenditures such as coffee, Afterpay and trips to the pub were run over with a highlighter.
So when these proposed amendments to the CCCFA are made next month, which include a clause that says 'when borrowers provide a detailed breakdown of future living expenses there is no need to inquire into current living expenses from recent bank transactions', you would think you are home and hosed, right?
New Zealand Banker's Association boss Roger Beaumont said proposed tweaks to the CCCFA were a "band-aid" and could mean more loan applications being declined than before.
Banks believed the changes resulted in about 6 per cent to 10 per cent of home loan applications that would have been approved before December 1 being declined.
Most of the existing requirements remain in place, meaning customers still have to provide detailed spending information, he said, and it will be a more "painstaking process".
On the brighter side, The Mortgage Centre Rotorua director and mortgage advisor Praveen Bhati said his team had been "flat out" with inquiries from first home buyers since the caps were lifted more than two weeks ago.
He is not alone as others in the industry said they were fielding huge interest and while it is not going to be the good old days, it is going to be significantly easier.
Who knows? All I know is, do not buy anything unless you can afford it and that with the spiralling cost of inflation, rocketing mortgage interest rates and uncertain economic headwinds, you might need a lifeboat, not a new house.