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 Before anything, you will need to ensure that your finances are in order. Sit down and assess your credit report – this includes your personal history of all your credit accounts (cards, loans, mobile phone plans etc.), and all their associated repayment histories.
Mortgage Broker or Bank Lending Manager – Who would you use? You are ready to apply for a home loan but are unsure whether to use a mortgage broker or head straight to your bank, the latter could prove to be a costly mistake in the long run. There are many reasons why you’re better off using a finance broker when looking for your home loan, even if you wish to have you mortgage with your current bank, you can still use a broker to process your application and manage the paperwork on your behalf. Here are a few reasons why every borrower should seek out a qualified finance broker when trying to obtain property finance. A Mortgage Broker gives options When you sit down with a broker, you have options. Are you looking for home renovation finance Have the wave of home improvement shows on television inspired you to carry out a home renovation? Whether it’s big or small, an investment project or home extension you’ve been dreaming about for years, the big question is – how are you going to pay for it? Here are some options to consider: Extend your mortgage
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! With that in mind, we’ve compiled a range of tips for successful co-ownership, that won’t leave you heartbroken – or broke. Communicate
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. 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.
RBA sits on the sidelines as Interest Rates remain on hold The Reserve Bank of Australia has indicated that we are in a ‘period of stability’ by leaving interest rates on hold during their monthly meeting this afternoon. The current cash rate sits at an historic low of 2.50%. Indeed, the RBA has gone on record as stating that global economic conditions have ‘evolved broadly as expected’. In Australia, this has led to an improvement in levels of consumption, housing investment, a surge in job advertisements and better business conditions. Housing growth on the back of low Interest Rates Speaking of housing, the market continued to show signs of growth last month. 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.
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.
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. With the median house price in Sydney now at $1 million, housing affordability is an issue felt by many Australians, particularly those in urban areas. This issue is not new ground for Morrison.
No move on Interest Rates again The final meeting of the Reserve Bank for 2015 produced no surprises as the Board made the decision to keep interest rates on hold. The official cash rate continues to stand at an all time low of 2%. Looking back on the past year, it’s been nothing but good news for the Australian housing market. Now that the traditional ‘spring fever’ has transitioned into the more languid days of summer, we can reflect on an extraordinary year.
Have you Selected your Investment Property Dream Team There are many things that can lead to investment property success, but the most successful property investors know the importance of building a team of reliable industry professionals around them, and developing this team over time. When you think of all of the individuals and professionals you’ll enlist in your property investing career – from finding properties, to financing them, managing them, and eventually selling them – the number of collaborators becomes fairly large. For this reason it is key that you develop relationships to ensure they are mutually beneficial, and that you get the most out of the relationship as possible. Though some investors believe that having paid for some of these services, that should be enough, this in my opinion is a short-sighted view of benefits that can be achieved by building industry relationships. Here are some of the key dream team members you’ll need to select, if your aim is to become a successful property investor: Mortgage broker (c)
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.