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Home Loans First Home Buyer Mortgage

Help with Rising House Prices 2021

Buying a house is supposed to be one of the most important times in your life. However, with rising house prices, many people are left disheartened. The already booming prices have continued to reach new heights. What this means is more grim news for Australians looking for a new house.

Statistics show that more than 60 per cent of Australians own their own home. However, home-ownership rates for people that are aged under 40 are quickly declining. While it may seem easier to simply build a new house, the hardship doesn’t stop there. House prices, in general, are rising, and that includes building prices.

Last year, all Australians were told that there would be a large market drop. Unfortunately, after saying that, the prices soared. Many people seem to think that the prices soaring can be attributed to not enough homes. That just isn’t the case.

house prices 2021

Why we are dealing with rising house prices

People are generally believing that rising house prices equals not enough homes. This has been a common thought process; however, this is completely wrong. It just can’t explain the take off in 2000, the next take off in 2013, and the most recent take off.

We definitely have enough homes. The 2016 census concluded that we had 12 per cent more dwellings than we do households. This statistic is up 10 per cent since 2001. This means that 12 per cent of our houses and apartments in Australia are empty. Usually, they are used as holiday homes, second homes, or they are waiting for tenants.

If there weren’t enough homes available, it would be more than property prices soaring, it would be rentals as well. Instead, rent has barely been moving. It has been growing even slower than wages for around half a decade.

rising house prices

The increase

House prices in Australia haven’t just skyrocketed. To say that is a complete and utter understatement. We have seen the rising house prices reach the steepest increase in almost 18 years. Places such as Sydney and Canberra have recorded the fastest quarterly increases in almost three decades. Melbourne has also seen a new record high with their house and unit prices rising significantly.

It is said that median house prices are expected to far surpass $1m in the next quarter alone. It seems as if affordability is being pushed very far out of reach for many people looking to own a home. News.com.au reports that the major driving force in this boom has been first home buyers, in much the same way as they were during the global financial crisis.

Landlords contributing to rising house prices

Funnily enough, people often buy houses and don’t even live in them. This is something called ‘rent-vesting’ that has become more and more popular since 2000. Since this time, people have been wanting to buy houses to rent them out and become landlords. These days, one in 10 people are landlords which equals out to around two million Australians.

To get the properties, aside from buying them, they have had to outbid people. Most of the time, they outbid people who would have actually lived in the house. While doing this, they have subsequently been pushing up the prices. Rather than investing in companies or the stock market, they are buying rental properties more than ever before.

buying a house 2021

A continued rise

Apparently, the rising house prices won’t be ending anytime soon. With mortgage rates reaching new, extreme lows as well as wealthier Australians coming out of the crisis with their wealth intact, it could mean trouble. It makes a lot of sense to do what others are doing. However, it will push up prices resulting in even more hardship. This could create some very uncertain times.

The bottom line is that it is not attributed to a shortage in housing. Instead, it will be pushing home prices even farther out of reach. News.com.au says “Whether or not investor activity will rise sufficiently to make up for this inevitable loss of demand in the longer term remains a matter of debate. But in the short term with the growth in housing finance commitments currently heading ever higher, it’s likely that we will continue to see strong housing price growth in the months ahead”.

How you can find help with rising house prices?

A saving grace with rising house prices is the Australian Lending Centre offering home loans for anyone. Whether you are looking to upsize, downsize or invest, need a loc doc loan or you have bad credit. We have a wide range of home loans to suit most situations.

Australian Lending Centre can help to finance the purchase of a house in many ways. With standard Home Loans, First Home Buyer Loans and Investment Property Loans. If you can’t afford to buy a house due to the rise in house prices, then you could renovate your existing home instead. Contact us today for all your home loan needs and more.

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Home Loans Self Employed

How To Get A Home Loan Self-Employed

Being self-employed, while rewarding, takes a lot of work and commitment. When it comes time to purchase a home as a self-employed individual, it can be incredibly daunting. Traditionally, banks do not favour those who are self-employed. Preferring those who can demonstrate a sure and steady income from a third party. How to get a home loan self-employed is possible though, and you don’t have to settle for a less competitive rate. 

What Types Of Loans Are Available To The Self-Employed?

If you do a search for home loans as a self-employed individual the chances are that the first results you’ll see references to ‘low doc’ loans. Low doc loans or low document loans require less paperwork than traditional home loans. They are offered to the self-employed as they require less proof of conventional income. There are other reasons lenders will promote lo doc loans such as:

  • Higher interest rates. Low doc loans always incur higher interest, meaning more profit for the lender.
  • Cheaper to process than standard loans.
  • Easier to process as less paperwork.
  • Less for lenders to check or comprehend about your business. 

Of course, with a little more work and attention to detail, you can gain access to other standard home loans such as:

self employed home loan

Why Can It Be More Challenging to Secure A Loan When Self-Employed?

Ultimately, any lender determines the success or failure of a loan application based on the borrower’s ability to pay it back. For those employed by a third party or PAYE borrower, it is easy to demonstrate income. Both amount and consistency of earnings. 

When you are self-employed, this is much harder to quantify. Not only will you have fluctuations in income, but your business will incur profit and loss. Additionally, they will try to determine the future viability or issues your business may face and how this would impact your ability to service the loan. 

It is a lender’s legal responsibility to ensure a loan can be repaid by the borrower. So while the mountain of paperwork may seem excessive, it is done with both yours and the bank’s interests at the forefront.

home loan

How To Get A Home Loan Self-Employed

If you are self-employed and want to pursue a home loan, there are some steps you can take to make this an easier process. Just as you would pay attention to detail and be prepared in business, so should you be in your loan application. 

  1. Engage the help of a specialist broker such as the Australian Lending Centre. They will do the leg-work and shop around different banks and lenders to find you the best offer. Avoid going straight to your personal financial institution as they may not have the best option.
  2. Get your financial paperwork in order. This is one of the major steps in how to get a home loan self-employed. You will need at a minimum the last two-years financial statements, tax returns and notice of assessments. Ensure all of the information has been lodged with the tax office or it may not be counted as valid. 
  3. Read up on the process. Applications can take significant time and each lender may approach the criteria and assessment differently. Understanding how you will be assessed can help you prepare and feel less frustrated at changes or delays. 
  4. Plan ahead. To the best of your ability try to forecast your earnings and expenditures. Avoid overextending yourself and having to try to refinance later should the worst happen. This would mean more paperwork and counts as a new application to most lenders. 
  5. Credit History if you have a bad credit score, as with any loan, this will create issues. Do a check on your credit rating and implement some simple steps to improve it in the short term and boost your chances of success. 
  6. Cash flow. Think about where you ‘park’ your funds for payment of GST and invoices. Utilise these funds to save interest prior to submitting to the ATO. 
  7. Clarify your employment status. If you are a contractor or sub-contractor it can change how you are perceived for loan purposes and make life easier. 
  8. Itemise your add-backs. Add-backs are business expenses that are once off or ‘go-away’ if the business is sold. Examples of this would be insurances, facilities upgrades, or loan interest. Itemising these can help to better assess the profitability and income of the business. 
  9. Proof of ABN registration for a minimum of two years. 
home loan self-employed

Make Your Dream A Reality

Don’t let being self-employed put you off from pursuing your dream home. With careful planning and expert advice from the Australian Lending Centre, your loan application can be easier than you think. If you’re unsure about how to get a home loan self-employed and are looking for guidance, competitive rates, and support, contact us today.

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Home Loans Bridging Finance

Top Tips for Buying Property at an Auction

A great way to get the home of your dreams is buying your property at auction. If you’re lucky, you may even score a great price for it. However, if you’re not experienced in buying a house at an auction, this may turn into a roller coaster ride of hell that you’ll just wish you never got on in the first place. This is where some handy tips for buying your property at auction come into place. If you do it without any experience backing you, not only do you risk losing a lot of money, but you may also have to deal with the fact that the house you had your eyes on may not be within your budget.

On the other hand, if you feel like investing in a home using an auction, you may want to arm yourself with some auctioning tips. Since the competition in Australia’s real estate is pretty hard, you won’t stand a chance if you don’t suit up, stand tall and do your research.

Here are some tips for buying your property at auction

Don’t bid before visiting the auction

Auctions aren’t always 100% sure and the ones holding the bidding will try as much as possible to make you see only what is nice and great about the house – while conveniently glossing over the negative sides.

So before bidding all confidently on an auction, make sure that you are completely aware of what you are trying to buy. Getting a home is as important as it is expensive, so you may want to find out all there is to know about the auction before placing your bid.

Ensure you visit the property prior to the auction
Buying your property at auction

Make sure you are prepared when buying your property at auction

Imagine finding the home of your dreams, bidding on the home and then realising you can’t actually buy the property. Heartbreaking. Don’t let this happen to you. Before you start attending auctions, make sure you have been pre-approved for a home loan. This immediately puts you in a better position, as you are more aware of your spending capabilities. At the same time, you want to make the process as seamless as possible.

Set your budget

Regardless of whether you have been pre-approved or not, you must ensure that you have set a budget. If you don’t want to go into personal financial bankruptcy, you may want to set a budget before confidently throwing your money at an auction. It would be very awkward if you realised at some point that you can’t afford to pay the bid. Therefore, establish the amount of money that you can borrow from the bank – or the sum of money that you already have in your possession.

Arrive early

When buying property, make sure you get to the auction nice and early. This will give you more time to assess the property. Look at the landscape, observe the competition(are they looking at the contract) and give yourself some time to calmly gather your thoughts.

Bid low and slow

Whilst there are many bidding strategies involved in buying a property, we would recommend that you start low and slow. Whilst a big bid can get things moving quickly, it may actually backfire in the long run. Big bids are uncontrollable. If the market is strong, those bids will come about anyway.  If you start bidding earlier on, and slower you are in more control of the situation. The first minute or so of bidding is typically the most nerve-racking. As such, keep the auction going to settle nerves.

Research the market

Make sure you do research on the current housing market
Make sure you do research on the current housing market

Before you attend an auction, make sure you are aware of the median house price in the location. Familiarise yourself with what has been sold in the area. Look at the size of the house, what’s nearby and how it will fit within your lifestyle.  There are many apps and websites such as realestate.com.au which have a whole database of information available at your disposal. Utilizing this information will put you in a better state to make a more informed bid.

Keep to yourself

When attending an auction, don’t spell your entire financial situation to a real estate agent. Keep information such as budget or willingness to pay to yourself.

Get professional help

You know the saying, “better safe than sorry.” A buyers agent can help you deal with the stress and jargon of purchasing a property. Of course, this may be costly, but it will potentially bag you the house of your dreams. Buying agents can bid on your behalf or assist you in understanding the auction process.

Stand confident

When you go to a job interview, you know that you need to dress properly in order to impress and act like you know exactly what you are doing – even though you may not. Well, if we were to take into consideration the top tips for buying a property at auctions, this also applies to a bid for a house. If you look confident and knowledgeable as you bid, this can actually work in your favour. Don’t be afraid to call out your bids loudly and with an ease of confidence. This will dictate that you are serious and not willing to back down.

This is how you can safely land the house of your dreams. Do you have any other tips for buying your property at auction? We’d like to hear your thoughts. Or if you want specific advice on borrowing money before you go on an auction, gat in touch.

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Refinance and Refinancing Home Loans

5 Things To Consider When Refinancing Your Home

With the current changes in interest rates and market conditions, the home loan given to you yesterday may not be the most suitable fit for you today. That is the primary reason why you have to consider refinancing your home. Refinancing your home allows you to get a better interest term and rate compared to the previous.

What is a home refinance?

Ever got yourself in a circumstance where you need to replace your current home with a new mortgage? Well, home refinancing is precisely that – getting a new mortgage loan to replace the existing home loan.

Refinancing your home is advantageous because it can reduce your monthly home payment amount, you can access finances for your mortgage improvement as well as cancelling home insurance premiums.

Before having a look at the five things to consider when refinancing your home, let’s check out the pros and cons of home refinancing.

Pros of Home Refinancing

The following are the benefits you will encounter when you refinance your mortgage:

Reduce Monthly Repayment

You might reduce your mortgage monthly repayment amount and end up with more money in your wallet if you manage to negotiate a better rate with your current lender. You will achieve this if you also succeed in setting a lower interest rate compared to the previous one with your new lender.

Debt Consolidation

You can use your mortgage equity to consolidate your debts. It is good because you will find yourself reducing interest rates on your debts. You can roll all your debts and loans into your newly refinanced mortgage loan. With this in place, you will only worry about paying one monthly payment often at a low-interest rate.

Greater flexibility

There are many more benefits you will receive when refinancing like receiving greater flexibility in terms of changing the duration of your loan and switching to the fixed or variable interest rate.

Drawbacks of home refinance

It is rare to find a product without its side effects. As much as refinancing can save you money, it can also land you in hot water. While lower interest rates and reduced monthly payments might lure you at first glance, it vital to also know the potential risks that might come along. Home refinancing can cause you the following problems;

Extend a Loan’s Term

Even when interest rates drop drastically, it is not always the right choice to refinance your home. Refinancing your home will typically increase the amount of time you will take to repay your mortgage loan.

Take, for example, getting a new five-year loan to replace an existing five-year loan; loan payments will be calculated to last for the next five years. If your current mortgage loan has one year left, refinancing may result in higher interest costs.

Closing Costs

It costs money to end a contract of a professional football player in the famous English Premier League. The same applies to refinance a home. You will pay a particular fee to your new lender as compensation. Extra costs may be incurred to obtain legal documents, appraisals, credit checks, among others. You might be forced to repay your mortgage insurance even if you paid for the previous home.

Consider the following

Well, for you to avoid any risks when refinancing your home, you need to consider the following:

Know Your Home Equity

Your property’s equity is the first thing you should evaluate before you make a home refinance. It is the first qualification you will need to refinance your home. Your home refinancing application will have high chances of being approved if your property equity is high. You might owe more in your home than it is currently worth or you might have no equity in it. It will all depend on your financial condition or hosing market.

Know Your Credit Score

Checking your credit score is important. If your credit file is filled with defaults, court judgements or credit enquiries, it will make it a lot harder to secure a loan with a traditional bank. Traditional lenders have become stricter on lending criteria. Alternative Lending Centres, can be more flexible; but you will still need to be aware of your score.

Your Debt to Income Ratio

Some people assume that they can get a refinance if they qualified for a home loan. It is not always the case because lenders have not confided themselves to credit scores only. They have raised the bars and become stricter with Debt to Income Ratio.

While it might seem challenging to get home to refinance, your most recent debt-to-income ratio might calm down your prospects. Always strive to keep your arrears to the minimum

The Cost Of Refinancing

Every good deed comes with a cost. The same applies to mortgage refinancing. You should always find out and get to know any expenses that are attached to your new loan. It will cost you 3% -5% of the overall refinance amount to refinance a home.

There are fees which can be reduced or at times paid by the lender. These fees might affect your principal or interest rate.

Know Your Taxes

Some of you rely on mortgage interest deduction to lower your state revenue tax bill. A home refinance may reduce your tax deduction if you refinance and start paying less interest.

It is advisable to visit a tax advisor who is experienced with home loans to provide you with valid information before you decide to apply for a home refinance.

Bottom Line

Refinancing your home is not as easy as it might seem. You need to take time to think and plan about it. You don’t want to fall on a hot frying pan afterwards. Before you go for a refinance, it will be wise if you reach out to the Australian Lending Centre for remarkable advice. They will help you figure out whether you should or should not refinance.

Categories
Debt Consolidation Bad Credit Loans Home Loans

10 Reasons Your Home Loan Was Denied

Most people believe a good life is having that killer home and a stable job. But what happens when you try to apply for a loan and get rejected?  It can become increasingly disheartening to hear the same 9 words –  “we are sorry your loan application was denied.” In this article, we dig deep and reveal the reasons why your home loan was denied.

Understanding the reason behind your loan denial is a valuable learning experience. This reason helps you to pinpoint the areas of your financial life that need to be polished. You can always improve on this and reapply for the funding.

 Let’s dive right into the ten reasons why your home loan was denied

Poor Credit History

Credit history is simply a record of a borrower on debt repayment from several sources, including banks, collection agencies, or credit card companies. Potential creditors such as the Australian Lending Centre and other mortgage lenders use your credit report or information to decide whether they will give or deny you a loan. Your credit information is the right way for lenders to tell whether you are a risky investment or not. Having a poor credit history will deny you a home loan.

If you check your credit score and you find that you have defaults, blackmarks or court judgments, it is highly recommended that you remove these otherwise you will struggle to secure funding. There are specialised credit repair agencies that can assess your credit situation and work towards removing these negative listings.

Insufficient Income/Asset Documentation

One of the big reasons why your home loan application may be denied is due to your income or debt ratio. Your income is an excellent measure of whether you can or cannot afford the home. ALC is likely to enquire about your assets and, more specifically, your liquid assets. They’ll want to identify what you have saved to raise a down payment, pay closing costs, and make monthly loan payments once you close your loan.

You have to make sure that you have sufficient income or assets before you apply for a home loan. It is essential to have your resources in a certified account, at least two months earlier, to applying for a home loan. It is because banks and lenders regularly ask for your two latest bank statements. Also, make sure you verify your assets for a down payment, closing costs, and reserves.

Down Payment is Too Low

Typically when you buy expensive things on credit, you need to make a down payment. The down payment amount usually covers a portion of the market price of the home. Lenders look at the upfront amount as an investment in their future home. A low upfront may not put their minds at ease. To certify your home loan application, consider having a more significant down payment, or else your home loan will be declined.

Problems with the Property

Sometimes you are not the cause of a home loan denial. It is not always your fault. Your home loan denial may be due to problems with the property you want to purchase. Therefore before you apply a loan for a particular home, do thorough investigation and research about the property.

Inadequate Employment History

Your employment history is essential when it comes to a home loan approval. You should have a consistent job history when applying for a mortgage home loan. Most lenders will consider two years of steady employment history to process your loan. By doing so, they only want to be assured that you can hold on to a job long enough to repay the debt. Make sure to keep all your payslips and any tax information. You will want to make the process as easy as possible for lenders.

Inaccurate documentation

Home loan lenders want to know everything about you, and therefore, leaving out any information may raise the alarm. It is always good to provide all the required details and fill out all the sections on application forms.

Reduced Debt to Income (DTI) Ratio

Most lenders look at DTI Ratio before awarding a home loan. DTI Ratio is simply a sum of your monthly payments divided by your monthly income multiplied by 100%. You should always aim at 45% and below.

Unpaid Taxes

Taxes are significant to a country’s income. A due fee is another debt that can haunt you. It can lead to a robust rejection of your home loan application. Make sure to work through old debts before applying for a home loan.

You Asked for Unreasonably Low Loan

Most lenders give loans based on how much interest they will make. The lower the investment, the lower the benefit they will gain. Therefore, you should understand that lenders make money from interests that are higher on high loans than small loans. They factor their profit against their risk, so it is unlikely for them to approve a low loan request.

Bulky transactions

Just like receiving huge money, large transactions may raise red flags when applying for a loan. You should not make large transactions as you near a home loan application period. Stick to low operations and always be ready to explain the purpose of the transactions. Valid documents should accompany this.

Final Thoughts

Now that you have learned and you are well aware of the reasons that can lead to your home loan denial, you only need to rectify what is dragging you behind.  Make sure that all the above are taken care of before requesting a home loan, or else it can get rejected. If your loan is denied, remember it is not the end. Focus on building positive financial habits that will help you increase the likelihood of securing a loan.

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Debt Consolidation Bad Credit Loans Business Loans Home Loans Personal Loans Short Term Loans

What Are The Benefits Of Using An Alternative Lender?

Following the GFC, banks became very cautious with how they lend their money. They didn’t lend to certain borrowers particularly those with bad credit or small businesses – in the fear that they would not be able to get their credit back. As a result, many businesses fell into bankruptcy because they had no one to turn to for financing.

If you’re looking to start a business, it can be even more challenging to secure financing from a bank. To get your business operational you may need some sort of finance. This is because you cannot start a company without the necessary capital to sustain it. When banks close the door your business dreams, just remember that it is not over yet. Aussies have one more form of financing that they can use – and that’s alternative lending. Slightly different from the traditional bank, alternative lenders have become quite an attractive choice for those that are in need of a loan.

What Is an Alternative Loan?

Alternative loans are the kind of businesses that aren’t provided by traditional lenders – for example, banks or credit unions. Examples of these kinds of loans are private loans, bad credit loans, wholesale funds, peer-to-peer loans, start-up loans, and so on.

Each of these loans has its own terms and conditions – which is why you must research accordingly. Depending on the lender, you might be asked for a higher interest rate, or given a smaller loan amount. But depending on your preferences, you will choose the one that is most suitable for you. Overall, alternative loans offer a second chance at finance.

Why choose an Alternative Lender?

There are various reasons why you might want to go for an alternative lender.

The Application Process Is Quick and Easy

Every alternative lender will have a straightforward loan application process. Technically speaking, all you have to do is provide some basic contact (or business) information, along with some financial data. A lender will need to quickly assess your financial situation to see whether they have the right loan product available.

Depending on the lender, you can expect to have your application completed in as little as 15 minutes, provided you are working with a tech-savvy lender. If you are borrowing online, it is even more convenient, as you will not have to get out of the comfort of your home in order to make the application.

Funds can be released quickly

It takes a few minutes to a few hours for your application to be approved – all depending on the time at which you make your request. The quicker that you work with the lenders, the faster you can get your funds. At the Australian Lending Centre, we offer an easy way to upload your documents. It takes a matter of minutes and can be done from your mobile. From the moment your application is approved (assuming it is), it can take as little as 24 hours for the money to appear in your account (depending on the lender)

Some lenders do so in 48 hours, but this is still the better alternative to traditional banks, for which you will likely have to wait entire weeks. This way, it will be much easier for you to start off with your projects right away.

You May Borrow with Bad Credit

If you have no credit or bad credit, there is a high chance that banks will not lend you money. They will see you as a red flag – and they will believe that you will not be able to make your payments on time. Unless your credit is above a certain number, there is a high chance that your request for a loan will be denied.

However, alternative lenders such as Bad Credit Loans generally have far fewer requirements. Whilst they still asses your finances, they will still lend to bad credit borrowers. Therefore, if you had trouble making timely payments before or had no luck with traditional lenders, then there is a high chance that you might be luckier with an alternative lender.

You May Use the Funds However You Want

Certain lenders expect that you use the funds that they give you in a particular way. For instance, if you are the owner of a construction company and opt for taking out a business loan, then you need to specify what you plan on doing with that money. As an example, you have to specify in the application that you need the loan to buy a bulldozer – and the lender will know that your profits will start growing with that purchase.

However, with alternative lenders, this will pose no problem. For all they care, you may use that money to buy a bulldozer, pay old Jim’s paycheck, or purchase a new fancy pen for the office. Obviously, you will use that money wisely – but what matters here is that the lender won’t set conditions on how to use that money.

Should I use an alternative lender?

Alternative lenders represent a very convenient solution when you are running low on money, but the banks won’t give you a loan. Alternative lenders offer people who have been refused in the past with a second chance at finance. All that you have to do now is find the right lender that will provide low-enough interest rates.

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Personal Loans First Home Buyer Home Loans

Reasons to Pay Arrears with a Personal Loan

Understand the main reasons why you should pay your arrears even if it means getting a personal loan to do it. We will also discuss a few tips on how to use your loans wisely to avoid getting into debt all over again.

There can be some confusion as to the differences between arrears and defaults. In simple terms, when fail to pay your mortgage, you call the unpaid balance, ‘arrears’. It’s ‘default’ when you missed payments on other types of credit—such as credit card or personal loans. Here are some of the most practical reasons why you should immediately settle your arrears—using a personal loan:

Save money on your growth asset

When you pay your arrears you are protecting your home equity. Instead of losing your home, why don’t you just pay your dues and enjoy the benefits of having a home which could increase in value overtime. Plus, you can also use a portion of you loan to make some improvements to increase your home’s fair market value. This is particularly advantageous for those who have obtained their first or second mortgage at a lower interest than the prevailing rates.

It protects your borrowing power

When you take out a loan, it has to be repaid at all cost. You will have to pay a fixed rate or variable interest rate on the loan. Since you put your home as a security to the loan, you have to give it up when you do not have enough money to pay your dues. When that happens, your borrowing power would diminish.

It is too difficult to obtain a mortgage when your home has been foreclosed because of unpaid monthly repayments.

Your home is one of the biggest financial resources. By building your home equity, you can also build up your wealth. You can take a home equity loan and use the proceeds to start a home small business. In addition, many businesses also start from home. You can take advantage of the fact that you don’t have to rent a business space nor commute. It offers flexibility and the perks of growing your business around your family.

You can build income overtime

By building your equity, you are producing wealth while literally living inside your investment.

When your neighbours of friends who are working from home think that their business outgrows their working space at home, you can offer a portion of your house as an incubator space or a co-working hub. Not only will you increase your home’s value, but you will also boost your income while helping other people establish their businesses.

Here are tips when using a personal loan to pay arrears:

Determine the exact amount of money you need

It’s not how much money you want, but how much do you need that really matters. Some borrowers waste money on unnecessary things because they fail to determine how much they really need in the first place. Take the time to pin down your intended loan amount, as accurately as you van before you fill out the application form. But, don’t forget to allow for contingencies, as emergencies may happen. While you should not borrow too much, it must also be enough to cover not only the arrears but other things that could put you in a much better financial position. Borrowing an exact amount may put you in financial trouble especially if you don’t have a backup plan on how to repay the loan when your income decreases or when emergencies arise.

Ask yourself how you will use the borrowed money

Though lenders offering personal loans will not ask you where the money is going, you must specifically know what it will be spent on to avoid wasting it. Simply saying, “to pay arrears” does not give you a specific guide on how to spend it wisely. List all accounts where you have arrears and if possible, include unpaid credit card balances and other debts that charge high interests. It is also important to put aside a certain amount for your emergency fund so you have enough money to cover contingencies when they arrive—and you won’t have to go back to your lender to borrow money again.

When will you pay the loan back?

You will need to decide how to pay the loan back and how will you pay it. Do you have a conservative cash flow projection? Do you have the capacity to pay back the loan, based on your current income or business standing? Will lenders approve your loan even if you don’t have adequate collateral to pledge? Make sure that you make the right decisions when getting another loan. It can save your assets for now by paying your Home Loan Arrears, but you can still lose them if you don’t establish your finances as soon as possible.

Categories
Low Doc Loans Home Loans

Fixed Low Doc Home Loan: Ins and Outs

If you’re in the least familiar with the financial terminology, you know that low doc loans refer to those loans that can be acquired with minimal paperwork. Because of this, they are mainly for self-employed people or entrepreneurs with small-sized businesses.

Of course, low doc loans can refer to any type of loan, from a mortgage and a car loan to a business loan. Now, there seems to be a misconception going around saying that all low doc loans are utterly devoid of dangers.

We’ve said it as many times: no loan, regardless of its purpose, is 100% safe. In the following, we will outline both the advantages and the disadvantages of getting a low doc loan for your home.

The Upsides of A Low Doc Home Loan

These loans are fantastic for freelancers/self-employed people

The requirements of the banks are harsh, and they really don’t care that you can, one way or another, repay the loan.

You have to provide proof of your income, tax returns and other documentation that is difficult to muster when you’re your own boss. In this respect, low doc loans are the best alternative.

The interest rates are fixed

You won’t need to worry that all of a sudden, the interest rate grew to alarming quotes. They will always stay the same. That’s why these loans are called “fixed.” You will have full control on the repayments, and the rates won’t fluctuate.

This can happen to loans taken out from a bank, but not with low doc ones.

The credit score isn’t a problem

Go to a bank with a low credit score, and you’ll be looked at like you are some kind of tedious criminal. Your chances of actually getting the loan you need fall under 50% or even less. The lenders that provide low doc loans are not as concerned with your rating as banks are.

This is mainly because they can understand the reasons why your credit score is chipped, as long as it’s not a consequence of not being good with handling finances.

Now, since we’ve seen the perks, we have to take a look at the cons. Eventually you’ll be able to decide whether low doc loans are a good choice for you or not.

The Downsides of A Low Doc Home Loan

Higher interest rates

This isn’t universally applicable, that’s why we recommend you compare many loans before you choose one. Usually, low doc loans come with interest rates that are higher than those you’d pay on a bank loan.

But then again, you cannot get that bank loan, so this isn’t something you can change. In some cases, you might be required to pay the LMI (Lender’s Mortgage Insurance), which is an additional cost you wouldn’t have paid for a loan taken from a bank.

They may not be as flexible as you may think

When you go to a bank, the representatives will show you tons of loans with adjacent features. A private lender, on the other hand, does not have as large a catalogue of options, so banks definitely win at flexibility.

If the mortgage rate goes down, you’ll be paying more

This means that the period you planned on repaying the loan will be lengthened. This isn’t really much of a tragedy, but it can be annoying when all you want is just to get rid of debt sooner than later.

The Importance of Comparison with a Low Doc Home Loan

No two low doc loans are the same. Before you make a decision, compare the lenders and check out these aspects: interest rates, the documents required from you, the flexibility of the loans and the terms.

The one that has the best features should be the one you choose to go with. Unfortunately, many people today undermine the importance of this comparison. To be fair, it’s their fault. It certainly doesn’t take that long to make sure your decision won’t be something you’ll regret in the future.

Conclusion

Purchasing a house is no small thing. Purchasing it with borrowed money even less so. If you’re not in the position to get a loan from the bank, your only solution is to get a low doc one.

Now that you know both the perks and the pitfalls of this type of loan, you can make an informed decision. For additional information, feel free to contact us on 1300 138 188 for a free consultation.

Ask for a low doc home loan, and you’ll be getting instructions from professionals that have helped many other people that were, at some point, in the same predicament as you are now.

And make sure, for your own sake, that you’ll be comparing at least five loans before sticking to any of them. You sure don’t want to get some terms and interest rates that are anything but okay.

Categories
Home Loans

What Happens When You Default On Home Equity Loans?

If the value of your home, or the amount you paid for it, is higher than your first mortgage or the principal, it means that you have equity in your home. You can tap into your equity by applying for a loan, secured by it. These can be a great option to acquire finance, but what happens if you default on home equity loans?

Here are the consequences if you default on home equity loans

1.The account will be sold to a collection company.

Unlike what other people think, foreclosure is usually not the course of action home lenders choose to recover the amount you owe. When you default on your debt, your lender may sell it to a collection company who will take it from there. They will call you, send collectors to your door steps or send demand letters to attempt to recover your outstanding balance.

standard-lawsuit2. Standard lawsuit

If the second mortgage holder decides not to foreclose, can it still recover the money it has lent you? Yes. In an attempt to recover payments, the lender may file a standard suit against you. It is less scary than a foreclosure where you will lose ownership of your home, but it can seriously hurt your credit score.

3. Foreclosure

In case of default, the holder of your second mortgage may initiate a foreclosure to recover the money it lent to you the moment your house is sold at a foreclosure sale. Since mortgage is a senior lien which takes priority over a home equity like a second mortgage (because the loan was registered earlier) the first lender gets paid first. But, what if you refinanced the loan—does it mean that the second mortgage lender becomes the first priority? It depends. Whichever lender has the certificate of title will be entitled for the payout first. If you were in the process of refinancing but it was never complete before the foreclosure on the property and you didn’t pay the previous lender out, they are not eligible for the funds. If your previous lender still holds the certificate of title, then they are the ones who need to be paid out.

avoid-consequences

Here are tips to avoid the above-mentioned consequences of not paying your home loan on time…

Don’t hide from your creditors.

They will not be so enthusiastic in working with someone who avoids their calls, ignores their letters and refuse to cooperate with their offer to help for a few months. Remember that most mortgage lenders will work with borrowers who are struggling to make payments to encourage payment. So, if you’re missing payments, contact your lender right away. Inform them about your current financial situation and express your willingness to work out a repayment plan suited to your condition. Your lender may modify the terms of your loan, lower or raise the interest rate, increase or decrease the monthly payments, depending on your situation and financial capacity. It can also be a combination of the abovementioned options to make the home loan more affordable.

Explore available options to avoid foreclosure

Are you struggling to make your second mortgage payments? If foreclosure is imminent because of default, check out some of the alternatives to foreclosure that Australian Lending Centre offers:

If you want to consolidate your debts into 1 easy-to-pay, low-rate loan with low monthly repayments, get your finances back into order with a debt consolidation loan. Learn more about home equity loans and the suitable financial solutions available for you by calling 1300 138 188 today!

Categories
Mortgage Financial Fitness Financial Planning Home Loans

Will My Car Loan Affect My Mortgage Application?

A car loan can help you a lot if you plan to get your next car faster. However, a car loan can affect your mortgage application or other types of significant loans. If you are planning to buy an expensive car, this means that you will require a large loan. That car loan can impair your future borrowing power. But this doesn’t mean that you need to choose just one of these two.

Let’s see how a car loan can influence mortgage applications and how we can deal with such a situation.

First Things First

When you apply for a home loan, you will need to provide information regarding your financial status. This means that you will have to give documents regarding your monthly income, assets you own and other ongoing payments. This is how a lender will determine whether you can pay back the loan or not. Every lender wants to avoid doing business with people who might not be able to keep their word because of their financial problems. They want profit, not excuses.

If it were a personal loan, your mortgage application would be fine. But since we are talking about an expensive car loan, your mortgage application might get rejected due to your other massive loan. Either that or come with a lot of restrictions.

mortgage-application

Will My Car Loan Affect My Mortgage Application?

A car loan will have a high impact on your finances. Given all the taxes you need to pay, a car loan can take most of your monthly income. Still, aiming for a cheaper car might be of some help. Since cars tend to lose their value quite quickly, getting a very expensive one may not be a good idea, especially if you intend to apply for a mortgage.

Mortgage applications will act the same so that you will be left with little to no money. This is why a lender will probably have to refuse your mortgage application.

A lender wants to know that you will pay your mortgage and you won’t default on it. He will analyse your assets and other methods of income. If he sees that you have the financial power to afford a car loan and a mortgage at the same time, he might give you the green light. If not, it might be better for you if you only had one.

Defaulting on a mortgage is not a good sign for your lender and your finances. Car loans and home loans can quickly turn into uncontrollable debts, and you might end up losing everything. So don’t think of the lender as the bad guy, but be objective and calculate what you can and can’t afford, because in the end, if you are dishonest, you will suffer the most. Because banks and lenders make sure they never lose.

eligible-for-loan

Can I Still Be Eligible for a Mortgage Application?

Yes, you can. Your car loan will affect how much you can borrow, but if you don’t want an expensive house, that a limited amount of money can be just enough. If you can’t get the sum you need, you can search for an affordable home. When it comes to loans and money, flexibility is a must.

If you want to increase your chances of getting your mortgage application approved, then it’s time to clean a little bit of your credit file. Pay your debts and try to repair your bad credit. Also, consider debt consolidation as a possibility. Lenders will check your credit to find out who they are dealing with and also what other assets you own, just in case they might have to make up for that loan with something else rather than your money.

Having a savings account is a great idea. It makes you more trustworthy and responsible in the eyes of your lender. Let’s not forget that having some savings might help you quite a lot to reduce the amount you would apply for.

Also, try to talk to your lender. The more information he gets regarding your situation and income, the bigger the chance of getting your request approved. Don’t forget to tell him your exact plans.

suitable-car-loan

Final Thoughts

So, the short answer is that a car loan can influence mortgage applications and under certain circumstances, it can get your requests denied. But do not let yourself discouraged. Evaluate your possibilities, cut down on the unnecessary expenses and, if you can, try to pay ongoing debts before applying for a mortgage.

You can talk about these details with Australian Lending Centre. Our friendly consultants will tell you about your chances of receiving a loan and, if you fit our criteria, you may even get a good mortgage option. Advice never harmed anyone so you should not miss the chance of clarifying your options face to face with an expert.

Categories
Personal Loans Home Loans News

Mortgage Broker vs. Banks: Which Is Better?

The verdict of a mortgage broker vs. banks contest may seem difficult to assess at first glance. Both can help you with good rates on your home loan, but there are some things they do differently. Maybe, after all, you’ll be the one to say who the winner is in the mortgage broker vs. banks competition.

Mortgage Broker vs. Banks – What Does a Broker Do?

A mortgage broker is fundamentally an advisor. This is the person that will investigate whether you are worthy of a loan or not. You guessed it – your credit score matters, but that’s not all. Your income and, subsequently, your ability to pay the loan back will be taken into consideration, as well. If you are eligible, the broker will look for the best offers that suit your needs.

The greatest advantages of using brokers instead of banks are their expertise and the fact that they may not frown at your bad credit. They know a lot of other lenders that can provide you with suitable offers. Because they are not affiliated with any banks, they are sure to find lenders that don’t really care for your stained credit file. They may even be specialised in serving people in predicaments. This particular section in the mortgage broker vs. banks contest is definitely won by the former.

A mild disadvantage when it comes to brokers is their number. There are so many that it may be difficult to choose the best one. Before you call on an agent, make sure that he has been in the business for a long time. Simple research can be very useful. Friends or relatives that previously used brokers to get good deals can also guide you.

What Do Banks Do?

In the same fashion, banks will assess your creditworthiness by having a bank loan officer to manage your files. Banks are often scarier than brokers because of the higher rates and fees. Loan officers have years of experience in banking and finances, in general, so you can rest assured that you’ll get the best rates.

Although banks are not inherently bad, they might prove to be an actual impediment in your way. In contrast with the brokers, banks always look at your credit score. They are not that eager to lend money to people who have a bad credit score.

Another disadvantage is that when you work with a bank, you will be given only the loans that the particular bank is offering. On the other hand, a broker can have access to a wide variety of lenders and loans.

Which One Is Best?

Both have their advantages and disadvantages. If you have bad credit or you want a wider array of options, a mortgage broker is a perfect choice. If you have good credit and the offers of the financial institution would suffice, a bank would do as well.

In other words, the verdict on mortgage broker vs. banks depends on your needs, the cleanliness of your credit and the deal you are trying to get.

If you still have questions, read more about non-bank lenders HERE.

Categories
Debt Management Credit Card Consolidation Home Loans

Credit Card Debt and Mortgages Being Managed Properly

This year has been a profitable one for Australian credit card debt and mortgages. According to the latest percentages, Aussies seem to be managing much better with their mortgages; their mortgage repayment appears to be going along much better than when compared with the previous year. Reports from the ABS data showed that their credit card debt had already dropped by 2.4% in January.

In the Money Survey from 2016, Mortgage Choice has discovered that at least ¼ of the respondents were faced with almost 12% month’s worth of wages in their offset account or going towards paying their mortgage. When compared to this situation, around 13% of Aussies claimed that they were facing this exact financial position somewhere around last year.

Aussies Can Now Manage their Credit Card Debt

CEO John Flavell has come to the realisation that today’s mortgage holders have become much more comfortable when it comes to dealing with their credit card debt. He also added that this isn’t surprising in the slightest since interest rates are currently standing at 60-year lows, which results in drastic mortgage repayments. This, in turn, makes it easier for homeowners to pay off their debts.

So, it seems Aussie cardholders have become used to managing their card debts, keeping it 34% lower in the month that followed Christmas. Average balances have gone from $77 to $3,114, and the conclusion was that the users are now savvier regarding the use of their credit cards. They are now paying off their debt before their deadlines and maximise their loyalty points by using their cards.

Australians have also become more imaginative when it comes to creating strategies that keep their balance down. They are now mostly opting for cards that have a 0% balance transfer, and thus they can pay off their balances without creating even more debt in return.

Ways to Manage Your Credit Card Debt

In case you were also wondering how to keep track of your credit card repayment, here are some money and credit card tips that could prove very useful.

  • Check your budget and see if you can make some extra mortgage repayments to lower your debt in interest which is going to get built up over time. Find a good strategy that would suit you, or look up for repayment calculators that will allow you to do the necessary calculations.
  • Make your next repayment a little higher than you normally do in order to lower your credit card debt. This way, you will be paying less interest.
  • Make use of features that are relevant to your home loan. Make extra payments to minimise the interest, then redraw the facility to make it convenient for you.

While managing your debts can prove to be difficult at first, with a little bit of research, you can find out ways to properly manage your mortgage and credit card debt.

Categories
Home Loans Interest Rates

Are You a Victim of High Mortgage Interest Rates?

In recent years, many of us became victims of high mortgage interest rates without even realising. This problem affects mostly the home loans because their term is the longest. But how can you know if you are in such a situation, too?

High Mortgage Interest Rates – Are you a victim?

Verify your current loan

In the case of home loans, the term is rarely shorter than 25 years. Most probably, when you have signed for the loan, you have checked it thoroughly and chosen what was the best for you at that moment. As the years have passed, the circumstances may have changed. For example, if you have opted for some flexible features, such as an offset account that you no longer need, it would be a good idea to downgrade your loan to a basic one now.

If, after verifying your current loan, you decide that you are a victim of high mortgage interest rates, you may consider getting a better rate from another provider.

Check the refinancing costs

As you decided to switch to a newer loan or provider, you may be so excited about the savings you can make that you simply forget about the refinancing costs. Don’t rush to conclude that your mortgage interest rates are the worst on the market and you can completely change the situation by changing lenders.

In most of the cases, calculating the refinancing costs will discourage you from making a change, as they are higher than the savings. Check to see if you have paid the lender the mortgage insurance and establish what are its terms and conditions, as well as the discharge fee. Also, calculate the costs of the application and valuations fees if you opt for a new lender.

Analyse the options

If, after calculating the refinancing costs, you still consider that you need to refinance, analyse all the options before making a decision so that you avoid being a victim of high mortgage interest rates once again.

This analysis should include a comparison of the loan types, in order to decide if a variable, split or fixed rate loan is suitable for you. If you don’t need any flexible features, don’t opt for them, because your mortgage rate will increase.

Another important aspect of this evaluation is to check the potential providers. Find out which of them have the best deals, who is reliable or not, etc. Moreover, read the contract carefully and don’t be afraid to ask all the questions you have before signing for a new loan.

Categories
Home Loans

Fast Track Your Mortgage Repayment

Did you recently check the present status of your home loan and the progress you are making? If not, it is about time you did that. Why? Tracking your mortgage could genuinely help you to save a great amount of money while, at the same time, you can make your mortgage repayment increasingly faster.

This way, the thought of financial freedom can become a reality sooner than you think. Consider the following tips.

Fast Track Your Mortgage Repayment

  • Make smaller payments on a regular basis

One simple way of fast tracking your mortgage repayment is by dividing your loan into smaller amounts of money that you pay more often, on a regular basis. While this will help you to pay off your loan faster, it will also contribute to diminishing the lifespan of the loan, as well as the amount of interest you pay.

Let’s say that you make your mortgage repayment once per month. Instead, you should think of making fortnightly repayments. If you pay $2400 per month, divide this sum in half and, instead, pay $1200 fortnightly. This means that instead of paying $31,200 per year, you will only pay $28,800.

  • Increase the sum you typically pay

Believe it or not, by adding as little as an extra $10 to the amount you usually pay on a regular basis as mortgage repayment, you can genuinely reduce the lifespan of your loan. A good idea would be directing your tax returns, bonuses and gifts into your mortgage. It takes discipline and willpower but it is a possibility you should take advantage of.

  • Don’t diminish mortgage repayments when interest rate drops

In the light situation in which the interest rate is smaller than normal, and, as a result, your mortgage repayments are diminished, don’t fall into the trap of paying less. If you continue paying the same sum of money, you will manage to make considerable progress with your loan, decreasing the amount of interest.

  • Opt for an offset account

If it’s a viable possibility, consider opting for an offset account. A mortgage offset account is linked to your loan. The monthly interest is calculated by subtracting from your loan the sum that you have in your offset account. You can consider directing your savings into this account. The main advantage of an offset account is that it will save interest while you can benefit from accessing your savings account as well.

  • Consider a better deal

And last, but not least, your mortgage should meet your individual requirements and financial situation. If you feel overwhelmed by your mortgage repayments, consider talking to your broker about changing your loan. You can talk about making additional repayments, or look into refinancing options.

Categories
Home Loans Interest Rates Refinance and Refinancing

Do Rentals Mean Losing Money?

The general, common saying that living in rentals equals to throwing money away is certainly not new, is it? And at first, it would seem this way. Rental means you don’t buy the house you live in, compared with purchasing a house that, in time, becomes yours eventually. Still, various aspects are often overlooked concerning this situation.

The fact is that the standard cliché phrases regarding the effectiveness of rentals have an overreacting approach. Allow me to explain the reason rentals might be a better choice compared to buying a house in some situations.

Are rentals equivalent to throwing money away?

The answer to this question is both yes and no. The fact is that, to some extent, renting might equal losing money. The logic is quite simple. As you rent, you don’t invest that sum of money, which doesn’t eventually grow or bring you any further benefits.

On the other hand, the non-deductible interest on home loans can also be conveyed as a waste of money for a change. Thus, renting is most of the times increasingly more convenient and affordable. Sometimes, renting might be the better choice compared to a mortgage. In the same respect, a house is an asset that is eventually affected by inflation, which comes to the disadvantage of most homeowners in the long run.

Here’s how it is. Let’s say that you pay rent, while, at the same time, you invest in shares or super. If you invest the difference between the sum you pay for your monthly rent and the amount of money you would normally pay for a home loan, there’s a strong chance your financial situation will significantly improve. When making mortgage repayments, you are less likely to make other investments. Still, you need to settle whether this choice is the right one for you or not.

The real costs of buying

If rent money equals dead money, then interest repayments equal dead money as well. The average interest rate in Australia at the moment is estimated at 4.50 percent. This means that you would be required to pay $18,000 per year on a loan of $400,000 if you wish to purchase a house valued at $500,000. This sum is almost as much as you would pay for a year of rent. Additionally, interest rates on variable mortgages are on the growth and are estimated to reach 6.20 percent in the long run.

It is needless to point the ownership costs that accompany house ownership. The ongoing costs of a property include repairs, fees, insurance, depreciation, council rates and so on and so forth. Not to mention that when buying a house, there are costs including stamp duty, commissions and so on.

The bottom line is that it’s up to you to decide whether opting for rentals is a better choice for you than purchasing a home. You ought to consider your personal needs and financial situation, as well as your plans for the future.

Categories
Home Loans

Home Loans – Do’s And Don’ts

Finding suitable home loans for your needs is a tedious task. A lot of people say that purchasing the house you want to live in will be you single greatest expenditure. So it is important, especially to future lenders that they are well prepared in entering in to this kind of. No one likes getting rejected, especially when you’re applying to get the house of your dreams. To avoid this, here are some things that you should and should not do when applying for home loans. A little knowledge of how the home loans game works can get you to places.

Do’s and Don’ts of Home Loans

Do your homework. Research everything that has to do with home loans. Most consumers select the lender offering the lowest interest rate, oblivious to the myriad fees and charges that will be added onto the loan later. A low interest rate is important for any type of loan but you also need to know the extra fees like closing costs. So before you apply for a home loan, you should find out how much money you may be able to borrow and what the repayment terms are available for you.

See if there are errors in your credit file. Review everything that is in your credit file. Since the credit bureaus handle millions of files, the possibility for an error is not unheard of. You may find an error or two if you review your credit file at least once a year and then you can take steps to rectify those errors. Why is it important to fix these errors? Because it plays an essential role in the approval of a loan. It’s a record of your current debt and loans you have applied for. Therefore it serves as a reflection of a person’s credit worthiness. We all know how important a good credit rating can be when it comes to home loans or any kind of loan, it can be the difference.

Be ready with the required documents. Paperwork that reflects your employment, income, assets, liabilities and expenses. This includes your tax returns, pay slips, bank statements, credit reports and even your driver’s license

Decide what you can afford. Lenders will give you as much money as they are comfortable handing over, but will depend on your capability to pay it back. Evaluate your income and expenses. This should give you a basic idea of what you might be able to afford for a mortgage repayment every month.

Lastly the most important thing is to make sure that you are prepared to take responsibility of maintaining your new home. It may be a tedious process when looking for the best home loans. But if you do enough research and also speak with many different lenders, you can find out the best options for home loans. You can then compare and choose the right one that’s suitable for you.

Categories
Debt Consolidation Home Loans

Consolidate Debts Into A Home Loan

Australia’s interest rates have decreased drastically and now is the best time in years to consolidate debts into a home loan! Given the interest rate atmosphere and the ease of combining of debt into a new home loan, now is the best time to get all your debts rolled into one and simplify your banking as well as take advantage and save with lower interest rates.

Consolidate your debts for a new home

Big banks are not the only option either for someone wanting to grab ahold of the deals to be had in the market right now. Buying a new home is every growing family’s dream and there is no reason why mounting credit card bills or medical bills necessarily have to get in the way of that dream. Having multiple bills coming in from many lenders or debt collection agencies can be tough to manage when the paycheck comes in at the end of the month. Getting all of the debt put under one loan means that there is only one payment to make and it can be managed much easier.

Now non-bank lenders have the ability to offer consumers better deals than big institutional banks usually offer with overhead expenses. If a big bank has not been able to meet your lending needs then it is time to reach out to a non-bank lender to get your debt settled into one weekly, fortnightly or monthly payment.

Consolidate with non bank lenders

Do not let a big bank’s strict rules and regulations get in the way of you and your family’s goals of moving into your dream home and get all of your monthly bills in order. It is possible to consolidate your debts and also take a loan for a new home and get all of this at the rock bottom rates and cost now available to new home buyers. Best of all, the big banks are not your only choice and there are non-bank lenders that will try harder to get your business and will make you a better deal on consolidating your debts into a new home loan. These interest rates will not stay this low forever and now is the time to strike and get your financial future in order under one roof.

To take advantage of these rates, contact your trusted loan expert and find out how you can consolidate your debts into a home loan. The friendly team at Australian Lending Centre is happy to help with any enquiries.

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News Home Loans

Interest Rate Cuts by RBA, Great News for Home Owners and Businesses

Earlier this week, the country’s two biggest banks passed on the latest interest rate cuts for loan customers. The Commonwealth Bank and Westpac have paved the way for other banks expected to follow suit on Friday February 6. The Reserve Bank of Australia’s (RBA) official rate cut will begin its full effect on February 20, creating an opportunity for the cheapest home loans in more than forty years.

interest-rate-cuts

Since the steady decline in the Australian dollar and the fallen price of oil in the past few months, the RBA has reduced the standard variable rate to a record low 2.25%. The RBA governor Glenn Stevens said the board judged that a reduction in the cash rate was “appropriate” due the downward forecast of the economic growth and a peak in the unemployment rate. Commonwealth Bank of Australia was the first big bank to reduce its standard variable rate by 0.25% but Westpac reduced their SVR by 0.28%, making it their lowest level since 2009.

Interest Rate Cuts – What it means for Australians

The latest interest rate cut posed by the RBA opens the door for many existing and new home owners as well as business owners. The new, lower interest rates provide home owners with a better chance of being able to successfully make regular repayments on their home loans. However, banks and other traditional lenders will still check loan applicants’ credit files if they qualify for a loan. Blemishes on credit files can stand in the way of new and existing home owners from being able to fully access the benefits of the new lower interest rates.

An alternative to traditional lenders is to apply for home loans through other financial institutions. Australian Lending Centre is offering similar interest rates through our range of products so applicants can enjoy the new lower rates. Our loan options include first home buyers loans, home equity loans, bad credit home loans, investment property loans, second mortgages and many more.

The RBA’s interest rate cuts provide exciting opportunities for new home owners and businesses. And Australian Lending Centre can help you take advantage of this amazing opportunity. Call us on 1300 138 188 for a free consultation or enquire online today.

Categories
Debt Consolidation Home Loans

Getting Savvy For Better Home Loan Rates

Home loan rates vary a lot from bank to bank and also from year to year. Locking in a low rate can significantly lower a home buyers cost over the long term so getting the best rate possible is one of the most important negotiations that a person will ever have to make. There are lots of ways to negotiate a better rate for purchasing a home but the most effective way is to persistently ask for a lower rate. All lending institutions want to get the most out of a customer as they can, just as much as you want to get the best offer for rates as you can. In these situations, you have the advantage of having all of the lending institutions competing to have you as their customer with their competitive home loans.

Better Home Loan Rates

Simply calling and asking for a reduction on advertised rates is an effective way of getting a reduced rate. If the bank does not immediately reduce the advertised rates then it is possible that they will offer to waive the package fee. Researching the fees and rates of the different lenders will give you the knowledge needed to get your rate as low as possible. Since the banks are competing heavily for your business they are willing to cut deals to get you to walk into their door.

Once you have narrowed down your options, make sure to never take other offers off the table. Another tool you can use is the amount of the loan you are willing to take. Often lower rates are given to larger loans since the banks see it as a way of making a larger profit in the long term. Consolidating other debt with the same institution is another way of bringing down borrowing cost. High credit card rates and car loan rates can be consolidated for a better rate for you and also give the bank an opportunity to have you as a customer on more business. Willingness to take a larger loan and consolidating other forms of debt can work well for both sides of the table.

A bit of homework and persistence can really pay off in what might be the largest purchase of your life so take some time and push for the best deal possible. The bottom line is that advertised home loan rates are negotiable and getting smart about your options can really help your bottom line in the long run.

Categories
Home Loans

Benefits of Second Mortgages

How do Second Mortgages Work?

Many people are familiar with the idea of a first mortgage on a property. The idea is fairly straight forward. You take out a loan which is secured by a particular property. It serves as collateral which reduces the risk for the creditor and makes it more likely that the property owner will get the loan. However, fewer people are familiar with the idea of a second mortgage. This is unfortunate because this type of financial agreement can offer some real benefits.

Categories
Home Loans

4 Things to Do to Avoid Defaulting on Your Mortgage Repayment

If you have a current mortgage and you suddenly lost your job or your source of income, you surely are in trouble. Aside from making ends meet for your daily necessities, you have to find ways to continue repaying your home loan. That will be a big challenge especially if you are certain you cannot afford to shoulder your monthly mortgage repayment anymore.

It is a must to avoid falling into a default. Aside from possibly being evicted from your own home, you will not like its long-term effect on your credit history. Try to prevent it from happening. Here are four effective ways to do so.

Categories
Home Loans

5 Ways to Leverage Your Home Equity

Tapping a home equity is now more natural just like mowing the lawn. If you are a homeowner and you want to maximise your ownership of your property, you should realise that there are more than enough reasons to finally cash in on your home equity. You may use the money to get into viable financial activities that you surely would benefit from in the future.
Leveraging could be risky but only if you would use it to get into deeper financial pitfalls. You could possibly avoid any risk of leveraging your home equity by using it to increase or boost your personal wealth. Here are some suggestions on how you could effectively and successfully leverage your home equity.

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Home Loans

4 Ways to Deal with Home Loan in Arrears

Have you been struggling to pay your home loan? If you have been building up your debt, you may have possibly missed out on one or several monthly payments. Or you may have been paying smaller amount than the minimum payment amount required. Thus, you may have to deal with home loan in arrears. How to deal with this problem? Here are four effective ways.

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Home Loans

Is It a Good Time to Buy Property in Australia?

The Australian property market is not expected to drop, but it is projected to remain steady all throughout this year (2011). Price tags are set to remain within their current levels but would more likely grow moderately in the next two years. This is the unanimous forecast of numerous industry analysts and observers in the country.

Housing market experts note that local property prices could remain flat or slightly rise within the coming months. However, they assert that homebuyers need not worry. Price increases across the country are still low when compared to housing costs in most other developed countries. Thus, it is still the best time to find and buy Australian properties.

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Home Loans

Affordable Homes in Australia

A recent property report has shown that home affordability is better now than a year ago. The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability index was 41% higher than in the corresponding period a year ago.

However the dream of home ownership has become tougher over the past couple of months with the index declining by 5.1% to 152.5 points in the June quarter from 161 index points in the March quarter.

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Home Loans

Packed to the Rafters: Sydney set to Face Housing Crisis

Due to increasing fertility and immigration influxes, Sydney is set to face new stream of housing shortages.

New Research suggests that the city will need over 33% more apartment blocks and houses than initially proposed in the NSW State Government’s 25 year city growth plan.

It has been found that an extra 876, 640 city dwellings will be needed by 2031, a significant rise from the initial government projections of the 640, 000 proposed.

Director of SGS Economics and Planning, Patrick Fensham describes the consequences, “That will mean pressure on housing affordability, people staying at home longer, cramming in more bodies that people like to in the house.”

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Home Loans

Share a Home Loan

If you can’t afford to purchase a home on your own, why not consider getting a home loan with close friends or family.

This trend has become increasing popular as many people are trying to take advantage of the first home owners grant boost before it reduces in October, and then cuts out in December.

In today’s economic times, borrowing has changed – most lenders now want to see deposits and a genuine savings history. One way to get into the property market before the boost runs out is to join deposits with a friend or relative.

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Home Loans

First Home Buyers See Home Loan Inflation

In the past two years the average home loan amount for first home buyers has risen by 23% showing home loan inflation. This increases fears as the Government incentives for young buyers have been said to be falsely inflating the market.

The average home loan amount increased from $228,600 to $280,600 a massive $52,000 in just two years. The significant increase in first home buyers in recent months has seen first home buyers become an important part of the residential home loan market.

The actual number of first home buyers also rose sharply; rising from just over 9,000 to more than 14,400 in the past year. With so many first home buyers entering the market home loan inflation could make it harder to buy.

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Home Loans

NSW Tops Home Loan Default List

As the unemployment rate in Australia continues to rise, up to 1 in 16 homeowners are defaulting on their home loans. Of the top 20 postcodes where mortgages are more than one month in arrears, 19 postcodes are in NSW, data obtained by The Daily Telegraph reveals.

An analysis by the UWS’s Urban Research Centre has found that areas along the M4, Windsor Rd and Canterbury Rd, as well as the Central Coast, are feeling the impact of the alarming recession. The hardest hit is the area around Fairfield and Liverpool, where the latest figures show that the unemployment rate has jumped to 10.5% (the highest it has been since 2001).

The top areas in NSW for defaulting on home loans is Nelson Bay, followed by Raymond Terrace, Katoomba, Greenacre, Guilford, Fairfield, Cessnock and St Marys.

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Home Loans

Brokers Beat Banks on Customer Satisfaction

Recent research has found that borrowers who use mortgage brokers to source their loan are more satisfied with the service provided and their end loan product than those who source their home loan through the banks.