Housing Affordability, what’s our new PM’s stance? On 15 September 2015 Malcolm Turnbull was sworn in as Prime Minister, signalling a new era for the Liberal leadership and this may lead to a different approach to the issue of housing affordability. There could also be a fundamental shift in the way the government addresses economic issues, with the Turnbull government set to be “a thoroughly Liberal government committed to freedom, the individual and the market.” At the heart of Turnbull’s economic ethos is the concept of a ‘free market’, encouraging competition wherever possible. Despite low interest rates, the rate of home ownership for those under 65 is declining, along with wages growth. What is home loan portability? If you are moving house, home loan portability gives you the option to take your current loan with you. By keeping your loan from one property to the next, you won’t have to go through the process of refinancing and you can save on establishment costs like application and valuation fees, government charges and potential exit fees (banned on loans taken out after 1 July 2011). If you have a fixed rate home loan, then loan portability could save you the significant break costs that may be charged for altering your loan before the full term. It also entitles you to retain existing facilities like your ATM card, Offset account and cheque book. Some mortgages include portability and others provide it as an option. Often there are restrictions in place that determine in what circumstance portability can be used.
How will the changes to investment loans affect you? The importance of a knowledgeable mortgage broker has come sharply into focus following the recent banking system changes to investment loans. Many panicked borrowers have turned to mortgage brokers like us, for guidance in the months since the Australian Prudential Regulatory Authority (APRA) directed the major banks to place limits on investment lending and hold more funds in capital reserves. With each bank responding individually to the directive, the changes in policy and pricing have varied wildly from one lender to the next. There has been confusion among borrowers and concern about how current and future investment lending is affected. Investment loans affected by the APRA changes If you fall into any of the below categories, you may well be affected by some of the changes.
How to Choose a Home Loan Term Some people pay off their home loan in record time, while others take 30 years. Which is better? Deciding on the length of your mortgage term is an important decision because it can significantly affect the amount of interest you pay, as well as have implications for equity and cash flow. With a shorter-term loan you’ll build equity more quickly, which gives you the opportunity to generate a larger profit when you sell. With a longer home loan term you will pay significantly more interest over the life of the loan, but on the flip side, there is more flexibility and less financial risk. For example, a 15 year loan of $430,000 at 4% interest, will cost you $142,518 in total interest paid and $3,181 in monthly repayments.
untitled The start of a new year is a great time to review your finances. Engaging a mortgage broker now will give you a window of time to figure out what processes and practices you can improve upon. Do you need advice on your home loan? Mortgage Brokers more popular than ever Mortgage brokers are now responsible for writing over half of Australia’s home loans and are valued for their choice, expertise and convenience, according to a new survey commissioned by the Mortgage and Finance Association of Australia (MFAA). From a 49.9 per cent share of the market in the March 2014 quarter, total new home lending to mortgage brokers increased to 51.9 per cent in the March 2015 quarter. Over this time there was a $44.2 billion increase in mortgage lending across Australia and brokers were responsible for 71 per cent of this increase, Australian Bureau of Statistics data reveals. Brokers were also found to be proficient at matching the right product to customer’s needs. In fact 30.2 per cent of broker initiated home loans went to smaller lenders, demonstrating that brokers offer consumers real choice and have access to a wider range of mortgage products than banks or other financial organisations. Investors look to Mortgage Brokers
What to Consider when Buying a Second Property Buying your own home remains the great Australian dream – and purchasing a second property may help you take your wealth further. Whether you’re building your property investment portfolio, buying a holiday house, upgrading or supporting a family member, there are plenty of things to think about before you take that all important next step. Consider your cashflow Property tends to be a long-term investment, so do your sums to make sure you can afford the ongoing repayments on two mortgages. Also think about any major life changes on the horizon – for example, you may be planning to expand your family, or you might need to support a parent in the coming years.
Could you be tempted by the lenders latest home loan offers? There’s a lot of competition for Australia’s $1.3 trillion home loan market and one could be easy to be dazzled or confused by the variety of offers available. Indeed, some of the deals might sound more like those on offer from car dealers than the banks, but that’s what happens interest rates are low and every lender is keen to grab a share of the market. Home loan cash back offers In recent times, the deals have included cash discounts, $1000 gift cards to help with moving costs, cash rebates, holidays and even petrol discounts from one non-bank lender. A recent report by JP Morgan found that all the major banks were enticing borrowers with home loan rate discounts, with especially generous deals being offered to wealthy borrowers. “There’s been a huge spike in the number of lenders offering cash back sweeteners to borrowers, especially refinancers,” said Kirsty Lamont of Mozo, the interest rate comparison website.
What You Don’t Know About TripAdvisor — Choking on a Macaron What You Don’t Know About TripAdvisor How the World’s Largest Travel Monopoly Ultimately Hurts Travelers & Small Businesses It’s no secret that most travelers will eventually end up on TripAdvisor when planning their vacation. It has become the Google of the travel world, where people go for honest, unbiased reviews of hotels, restaurants, sights and activities by fellow travelers. 3 Questions to Ask Before you Refinance your Home Loan The home loan market is constantly changing, with new and attractive deals coming up all the time. Refinancing can help you secure a more competitive interest rate, access the equity in your home, add features (such as an offset account) or consolidate your debts, but there are some important questions to consider before you get the ball rolling. Has my financial situation changed?
Buying together – 4 tips about property co-ownership With the romance of Valentine’s Day still in the air, many may be feeling the romantic urge to take the plunge and shack up with a loved one, but property co-ownership is a serious business and getting it wrong can have long-lasting repercussions. Certainly, romantic reasons aside, co-purchasing a property can be a great way to improve your buying power and reduce the burden of debt repayments. It also enables you to split other costs such as rates, water and utilities. Whether it’s young love or simply your first transaction together, when it comes to purchasing with a partner, it pays to proceed with caution and avoid letting your heart play tricks with your head! What you Need to Know about Home Loan Refinancing A home loan is generally a long-term proposition, but in some situations it can make sense to refinance your mortgage. Read this guide to the home loan refinancing process, and speak to your broker, before deciding whether it’s right for you. Refinancing involves taking out a new mortgage and using those funds to pay off your existing mortgage. Doing so can save money and result in significant financial gains over time, here are some of the reasons why you might refinance.
Hassle free home loan applications - how to properly prepare For the majority of people, a home loan is the biggest financial commitment they will make during their lifetime. Such an obligation requires painstaking and meticulous planning, but with the right resources and careful preparation, you shouldn’t need to stress. Here are a few tips to help you make the home loan application a breeze. Prepare your credit report Finding a home loan when you’re self-employed There are many perks to working for yourself, but when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders. Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contractor, entrepreneur, tradesperson or freelancer. Yet by being proactive and accessing specialist advice, self-employed applicants can also enjoy a successful and hassle-free road to securing a mortgage. Try these top tips for starters.