How an Offset Account Could Cut Years off your Home Loan. Looking for ways to pay off your mortgage in record time?
Whether you’re a seasoned investor or buying your first home, an offset account can help you reduce interest payments, save on tax and pay your mortgage off years ahead of schedule, read on to see how it works and how you can reap the benefits. What is it? With an offset loan the borrower takes out a home loan and opens a linked savings or transaction account. The balance in the savings account is then ‘offset’ daily against the home loan. How an offset account works With an offset loan, instead of receiving interest on your savings account each month, the account balance is offset against your home loan, reducing the amount of interest you pay over the life of the loan.
For example, if you have $20,000 in your account and $400,000 owing on your mortgage, the interest on your home loan is calculated on $380,000 instead of $400,000. 6 Winning Strategies for a Property Auction. A Property auction can be very competitive and stressful for most bidders.
Here are six smart strategies that could improve your chances of winning. Don’t show your hand. Why Location is Crucial when Buying an Investment Property. The first thing most of us look at when selecting an investment property is its location.
If the property itself isn’t quite right, you can always renovate, but it’s not as easy to move a house to a better location. That’s why you should consider the location carefully. Here are some of the most important things to look for. Love thy neighbour Before you buy, familiarise yourself with the local community. Is it a good idea to manage your own investment property? 10 Tips for Paying off your Home Loan sooner. Wondering how to pay off your mortgage sooner?
We look at some things you could do. Australian home loan interest rates remain at historic lows, and the opportunities for paying off a mortgage early are better than ever. Used in conjunction with low rates, here are some extra steps that can speed up loan repayments and reduce your loan balance. Make higher repayments One of the easiest ways to quickly reduce the balance of your mortgage is to make larger loan repayments. Some lenders may charge you an early payment cost for paying your loan in advance. Make more frequent repayments Home loans are often structured so that you make monthly repayments. Interest rates fall to a record low of 1.75% The economist’s predictions were split – and now we know.
It seems as though May is the month for rate cuts, as one year ago was the last time we saw a movement in interest rates. Then it was cut to a record low 2.00% – today, Reserve Bank of Australia has applied a further cut to the official cash rate of 0.25%. It now stands at an historical low of 1.75%pa. Once again no movement in Interest Rates. It’s the first Tuesday of the month, and that means that the members of the Reserve Bank of Australia have met over lunch to discuss the official interest rates.
Today (and as predicted by the majority of Australian economists) the members have decided to keep rates on hold at a record low of 2%, which continues to be good news for all mortgage holders. The central bank is also expected to increase its efforts to talk-down the local currency in order to further assist with the rebalancing of the real economy. “No change” say the RBA, as interest rates stay on hold. All the pundits were proved correct as the RBA announced that, once again, interest rates continue to stay on hold at the low cash rate of 2%.
Needless to say, this is also very positive news for all Australian mortgage owners (and those who are looking to enter the property market). The RBA’s decision to keep interest rates on hold reflects an increasingly positive mood for Australia’s prospects. Why you Should Pay for a Pre-Purchase Property Inspection? You’ve got your mortgage pre-approved and you’re about to sign on the dotted line for your dream home, stop and ask yourself: How can I be sure the property I’m buying is in good shape? A pre-purchase inspection is essential for every home purchase – whether it’s your new family home or an investment property. Not only will it help identify potentially serious problems with your proposed purchase, it could save you thousands of dollars in the long run. Leave property investors alone. Is it time to refinance your home or investment loan? The Property Investment Growth Suburbs - How to Find Them (Before the Boom)
What makes a sleepy suburb suddenly become a hot property investment option?
And who wouldn’t want a crystal a ball to know exactly what these suburbs are – well before the boom? Of course, nobody knows for certain what the future holds. But with a bit of research and a keen eye, there’s a good chance you can spot a property investment winner before the prices skyrocket. The ‘crazy house’ price. You’ll need to do research. Infrastructure Improving infrastructure naturally leads to interest in growing suburbs. The Wow Factor for property investment There are some areas that are obviously attractive to people, and suburbs near natural attractions are one of them. The Coffee Shop Factor If good coffee shops and restaurants start to open in a particular suburb, it’s a sign that people are paying attention to the rumblings of an area. Education Nation Ever since the ‘My Schools’ website was launched, a good school catchment area has become even more important factor in property investment.
A Bridging Loan - When is it an Ideal Option? Essentially, a bridging loan is available to allow you to buy one property before you have sold your current home. Your house is on the market, waiting for a keen buyer to snap it up – but it doesn’t quite happen as fast as you’d like. In the meantime, you’ve been checking out the market and, lo and behold, you suddenly find your dream home – at the right price and the ideal location.
Now what? Loan Product Focus - Construction Loan. SMSF: How to choose the best properties. Credit Report - Changes on the Way. Beating the low doc mortgage blues. If you’re self-employed or own your own business, pulling together all of your financials can be a tough ask – but that shouldn’t stand in the way of your securing a home loan.
Low doc mortgage loans are the perfect alternative for borrowers who struggle to come up with all financial documents for a loan application – an issue faced by many in Australia’s self-employed sector. In common with all home loan applications, low doc mortgage borrowers are generally required to submit a standard loan application. However, instead of providing, say your PAYG statement, the self-employed low doc mortgage applicant would provide a verified Business Activity Statement when they apply for a low doc mortgage product.
Types of low doc mortgage loans available Borrowers can apply for investment or owner-occupied home loans and even small business loans. A loan-to-value ratio (LVR) of 80 per cent is considered to be standard with these products, though higher amounts may be available through some lenders. Confidence in Property Ownership is on the Rise. There is little doubt the property market is in upswing as we head into spring, with interest rates at record lows and a resurgence of investors returning to the market According to RE/MAX WA managing director Geoff Baldwin, increased sales and upward price pressure are expected over the next few months.
“Historically, the spring period sees the market improve and there is little doubt this annual cycle will repeat again,” he said. “However, there are several other influences that are likely to create extra pressure this year.” He urged those seeking to upgrade or purchase their first home to look at the market prior to this upswing if they wish to avoid paying more. “Most informed projectionists are in agreement that Australian property prices are as low as they are likely to get and although nobody is predicting boom conditions, people who buy now will almost certainly benefit from significant gains over the next few years,” Mr Baldwin said. Like this: Like Loading...