Category: Refinance and Refinancing

How To Refinance A Car Loan?

Post author By Diane Challis
Post date 7 June 2021
No Comments on How To Refinance A Car Loan?

Learn how to refinance a car loan and find out how you could benefit from reduced rates, improved loan terms and easier repayment structures.

Buying a car is an exciting milestone that gives you that freedom you have always longed for. You can say goodbye to bus and train timetables and take off for weekend getaways with ease. Getting to and from work is now a breeze, and you can get around as you choose.

There are so many benefits that come with a car. But do you have the best loan for you? Refinancing your car loan can land you a better deal and ensure you pay back less over time. Here’s how to refinance a car loan.

How To Refinance A Car Loan?

Wondering how to refinance a car loan? The process is quite easy, but you do have to do your research to make sure you are getting the best deal. Refinancing your car loan means replacing the existing loan with a new one under new terms.

Before looking at how to refinance a car loan, let’s take a look at the benefits it can offer and why you might consider it.

Why Refinance A Car Loan?

There are many reasons you might be considering refinancing your car loan. If you are in a position of good credit and have been making your repayments on time each month, then refinancing is a great opportunity for you to secure a lower interest rate for your loan. This can help you save money and also reduce the monthly repayments.

Here are some of the benefits that come with refinancing:

You can find a better interest rate. This will save you over the course of your loan and you will end up paying back less money overall.
You have the opportunity to extend the length of your loan to make it easier for you to pay back.
You also have the opportunity to remove your guarantor by refinancing the loan.
You can change the type of loan you took out, ie from fixed to variable interest or from secured to unsecured.

What To Consider

Before you take decide to refinance your car, there are a few things you should consider:

The value of your car: the value of your car is different to how much you paid for it in the first place. Cars aren’t considered a great investment and they usually devalue the minute you drive out with them. Owing more money than the car is currently worth makes you a high risk to a lender and can be more difficult to find a new lender who will refinance your loan. If you default on your loan, the lender can seize your vehicle as payment, but if it is worth less that your loan, then they won’t get the full amount owed.
How long you have left on your loan: car loans are significantly shorter than mortgages, so it is worth looking at how long is left on your loan to consider whether it is worth it. If you have less than a year left, then the cost in fees to change lenders could end up more than you save on a new loan.
Work out the costs: you also need to work out how much it will cost you in fees etc, compared to how much you save on interest to see if it is worth your while. This will vary from lender to lender.

Types Of Refinance

When it comes to how to refinance a car loan, there are a few options available to you.

Car loan: you can take out a new car loan with a new lender. This new car loan will take over your old one and offers you the perks of a lower interest rate.

Personal loans: you can take out a personal loan with a new lender to cover the cost of a car loan. You can use the money from the personal loan to pay back you car loan provider and then pay off the personal loan instead.

How does it work? Once you find a new provider, you can choose the type of refinance you are interested in. The money you borrow from the new lender is then used to pay off the balance on your previous car loan. As a result, you enter into a new contract with the new lender.

How To Refinance A Car Loan?

Now that you know the benefits that come with it, you might be wondering exactly how to refinance a car loan? If you are wondering if you qualify then speak to the experts at the Australian Lending Centre.

We offer fast and reliable vehicle refinancing options to help you save money and get a better deal.

Tags car loan, car refinance, refinance, refinance car

Personal Loans Car Finance Refinance and Refinancing

What Is a Good Car Finance Rate?

Post author By Jack Richings
Post date 1 May 2020

Buying a new car is really exciting, but finding the right finance rate depends upon your individual circumstances.

Buying a new car is an extremely momentous and exciting occasion in your life. Whether it is your first car and a second-hand model, or your fifth car and you have opted for new off the shelf. The one thing that factors into both is being able to pay it off. Finding the right finance rate for your car is very subjective, and a lot of it has to do with your individual circumstances. So what is a good car finance rate?

Let’s take a look at this further.

What is car finance?

Having a car is almost a necessity in life for most people. From travelling to and from the office to dropping kids off at school and extracurricular activities, it can be hard to get by without them. In fact, some families even find they need two cars to make things work. The problem is, cars tend to gobble up money – fast.

If you don’t have enough savings to go out and buy a car (new or secondhand), taking out a car loan is a great option. It allows you to pay back the car in manageable instalments so you don’t feel the full hit of the purchase all at once.

Of course, it does come with a catch. Just like any other loan, you repay it with interest to the financial institution you borrowed from. So let us take a look at what is a good car finance rate?

What is a good car finance rate?

As previously mentioned, this often depends on your individual circumstances. But there are a few key factors that need to be considered when taking out a car loan. All these factors help determine your finance rate and how much you end up paying in the long run:

Interest rate

This is, of course, one of the biggest components to factor in when weighing up a car loan. The interest rate is expressed as a per annum number. Before taking out a loan (any loan) you need to know what that interest rate is. Your credit score can affect how much interest you pay. If you have bad credit and have a history of not paying off loans, a traditional lender is unlikely to take a chance on you. You may have to look for a non-traditional lender who will offset the risk with a higher interest rate.

The loan period

This can be as short as three years or as long as five years. If you opt for a longer-term loan it means your repayments each month will be smaller. However, you end up paying more interest overall.

The repayments

In general, these are made monthly. However, you can always discuss with your lender if you would prefer to pay these off fortnightly or weekly instead. If you pay it off quicker, it can mean you will end up paying less interest in the long term.

Fees and charges

It is always important to look into other fees and charges that might be involved. These can add to the loan amount significantly.

How to get the best car finance rate?

Now that you know what is a good car finance rate and the factors that contribute to it, you can look at how to get the best rate for yourself.

You have a couple of options when it comes to taking out a loan:

Take one out with the dealer: the finance rates are often higher with this option, but there is no planning required and it’s very convenient.
Take one out with a bank or non-traditional lender: this option is less convenient, but often gives you the best rate. You are not relying on the dealer for both the price of the vehicle and the loan, so it takes away a bargaining chip.

The best way to get the best rate is to do your homework. Shop around and take a look at who is offering the lowest rates and whether the terms they set work for you.

What if I want to change my loan?

Firstly, it is important to determine whether refinancing your car is the right step for you. What exactly is it and what does it entail?

It essentially involves taking out a new loan to pay off your own loan. The main idea behind refinancing your car is to save you money in the process. If you manage to reduce your monthly repayments then it can free up that cash to be spent on other financial commitments.

There are four reasons you might look at refinancing your car:

Lower monthly payment
Lower interest rate
Longer loan term
Shorter loan term

If you are unhappy with your current situation and are looking into what is a good car finance rate, then this may be the best option for you.

Getting the right help

Whether you are in the stage of looking at different cars on the market and working out your finance options, or perhaps you bought a car recently (or not so recently) and are looking at changing your loan. It is always good to get a professional opinion. The team at Australian Lending Centre will look at your particular situation and offer the best advice based on your needs. Get in contact with us today.

Tags advice, Car finance, Good finance rate, money saving, new car, rates, refinance, tips

Refinance and Refinancing

The benefits of refinance

Post author By Jack Richings
Post date 1 January 2020

Most people lock themselves into a loan and chip away at it slowly over the years, without looking into their options and re-evaluating things down the track. The truth is, refinance comes with many benefits and is definitely something you should be considering.

What does Refinancing Mean?

Refinancing occurs when you revise your interest rate, payment schedule, and terms on a loan. It is often best to consider refinancing your loan if substantial changes occur with interest rates, as it could end up saving you lots of money in the process. You write up a new agreement with the new terms set under it.

Different Types of Refinance

In general, refinancing applies to mortgage loans, car loans, and student loans. There are different ways you can refinance a loan:

Rate and Term Refinancing

This is the most common type of refinancing, where the original loan is replaced with a new loan that has lower interest payments.

Cash-out Refinancing

These are used for loans where something has been put up as collateral, for example, your house. If that increases in value, you can withdraw the value for a higher loan amount.

Cash-In Refinancing

This option allows you to pay down some of your loans for smaller loan payments.

Consolidation Refinancing

If you have lots of different loans in action, this type of refinancing enables you to take out a loan that is lower than your current interest rate across all loans.

Benefits of Refinancing Your Loan

Refinancing your loan comes with many benefits, and these can vary from lender to lender. Here’s a guide to some of the benefits you can expect from a refinance.

A better rate

Unsurprisingly, this is one of the most common reasons people refinance loans. Interest rates may have gone down, or your credit may have improved. This could mean you are eligible for a better rate than you are currently paying.

Lower payments

One of the benefits that come with a lower interest rate is that your monthly payments are also reduced. You also have the option of extending your pay off date. By taking longer to pay your loan back, you will also have less to pay each month.

Lock-in contracts

If you are currently on an adjustable-rate for your loan, you can choose to refinance into a fixed-rate for the remainder of the loan. This has the benefit of letting you lock in a good interest rate, and you can also plan out your payments.

Shorten your loan

mortgages, in particular, are long-term loans that span across decades. You may start off with a 20-year loan and then refinance when you are in a better position to make it a 10-year loan and pay off faster. The rates on a shorter loan are also much lower, so you will end up paying less.

Cash-out

The cash-out refinancing discussed above provides you with access to money when you need it. You can borrow against the amount your equity has risen and have access to that cash immediately. Mortgages tend to have lower interest rates than other loan types, so this can be a great way to do it and save yourself money in the process.

Consolidate debts

You can use the money from the cash-out refinancing to pay off other debts you may have owing, so you save on interest rates. As mentioned, mortgage interest rates are generally a lot lower than other types of debt. This also means you can reduce how much you are paying off each month, as mortgages are long-term debts.

How it Works

Despite all these benefits that come with the loan refinance, it is important to think your decision through properly before going ahead. When you refinance a loan, your lender pays off the initial loan for you and then you take out a whole new loan with the new terms. There are fees involved in this process, so you want to make sure the savings are worth it at the end of it all.

You have to pay an application fee to start the process, which covers the credit check and administration costs. If your application is denied, you won’t receive a refund. Once approved, you then have to pay a loan fee, which covers the lender’s administration and financing costs.

Some of the other costs include an inspection fee, recording fees, attorneys’ fees and more. The most important thing to do before you head down this path is to add up the costs and savings and see how they balance out in the long run.

There are so many practical advantages that come with refinancing your loan, so make sure you look into it and don’t just keep paying off your loan without a thought. You could potentially save yourself plenty of money in the process and have that loan paid off even faster.

Tags refinance, refinance process, refinancing, refinancing self-employed

Refinance and Refinancing Home Loans

5 Things To Consider When Refinancing Your Home

Post author By Jack Richings
Post date 25 November 2019
No Comments on 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.

Tags home equity, home equity loans, home loan refinance, home refinance, mortgage, refinance, second mortgage

Refinance and Refinancing Debt Management

How Can I Pay Off My Mortgage Quicker?

Post author By Jack Richings
Post date 5 November 2019

A mortgage is a debt. Therefore, failure to pay on time can cause you massive problems and drive you into stress. The idea of paying off all your mortgage can be pretty unnerving. There is a need to formulate a plan on how to go about the whole repayment process. So, how can you pay off your mortgage quicker?

Having no plan means you will be less likely to live a debt-free life as you will be having issues with your lenders for failing to submit your periodic payments. If you become trapped in a bad cycle of debt and you cannot make loan payments, the banks can opt to sell your home to recover any capital. Don’t be in debt all your life, or risk losing your dream home. Instead, pay your debts off quickly and live financially free.

The following are some free and easy steps you can take pay off your mortgage quicker

Refinancing your home loan

During your financial analysis and review, you may find out that your home loan doesn’t meet your needs. In such a situation, you will need to consider refinancing your mortgage. Bargaining your current rates with your already existing mortgagees or shifting to a new lender that offers a lower interest rate may bring about an increase in savings and help cut down the duration of your principal and interest loan.

Switch to a biweekly payment

As an alternative to one monthly fee, you can submit a half-sized payment every two weeks. What I mean is that, if your average mortgage amount per month is $10000, you will pay $5000 every two weeks. The impact on your budget for this mode of payment remains the same as that of one monthly payment. The only difference is that a biweekly payment schedule will lead to an increase in the annual full-sized amount by one (13) instead of the usual 12 out of the 52 weeks of a year. The concept behind this idea is that you will be making an extra payment every year without soliciting around for the additional capital.

Make your mortgage priority

You can secure a debt-free lifestyle much sooner by using the extra cash to make supplementary payments on your mortgage. There is no sense in paying for things you don’t need

Make more recurrent payments

Since interest on mortgages is calculated daily, submitting payments more frequently may aid in reducing the interest you clear over the term of your mortgage so that sooner you are a debt-free person. Take advantage of your lenders policies as some lenders may allow you to shift from monthly payments to fortnightly repayments.

Maintain the steadiness of your repayments

Interest rates can decrease. You should keep repaying your mortgage even when the prices are higher. When the rates are lower, the excess money will come off your principal, and this money can support you pay off your mortgage quickly.

Assess the market

There is always competition in the market. In a tight market, your mortgagees will still compete for your enterprise, so you should take some time every year to do a mortgage check and find out what promotions are out there. Don’t just sit and forget about your mortgage. There is always an opportunity to save. Take it.

Dedicate any Bonuses into your mortgage

How much you pay towards your unsettled principal balance matters can play a large role in reducing your overall balance.

Over time, you might find yourself with extra funds and lack a better way to put it into use. Situations under which you can find yourself with excess funds include; a bonus from work, tax refund, and inheritance. Choosing to dedicate these funds to your mortgage payment means serious progress towards your mortgage.

Make use of a mortgage pay off loan calculator

A Loan calculator can be an excellent tool for assessing how long you have until your financial freedom. The calculator can be used for other debt types as well, and it is not just limited to how to pay off your mortgage quicker.

Focus beyond big banks

Big Banks fund and support small banks. Unlike most big banks, smaller banks are ready to compete for their customers harder.

Other than personalized services they offer, most smaller lenders offer mortgage options the big lenders don’t. These options typically include lower interest rates, flexible loan terms, higher lending ratios and lower ongoing loan rates. Above all, alternative lenders are more empathetic to your financial needs.

Consider Downsizing

Shifting from a large house to a relatively smaller one is a harsh step. Nevertheless, if you are determined to pay off your mortgage ultimately, consider selling off your large house. Use the profits gained to purchase a smaller, less expensive home and pay part of your mortgage charges.

The profits you get from selling your bigger home may allow you to pay cash for a new house ultimately. Similarly, you can decide to go for a smaller mortgage. Either way, you will have succeeded in reducing your debt. The lower your balance, the quicker you can pay.

Take Away

Paying off your mortgage quicker is usually a sensible decision. Over the mortgage term, It can save you thousands of money in interest payments. Quickly take a look at all the above steps on how to pay off your mortgage quicker and expect to be among the debt-free persons sooner.

Tags home loan

Refinance and Refinancing

Breaking Down the Notion of Short Refinance

Post author By Diane Challis
Post date 22 April 2018

In everyday life, when you refinance, you simply exchange a pre-existing loan with another one in order to get perks like a better term and lower interest rates. However, sometimes, the lender is the one who tells you to refinance.

It is unfortunate, yes, but many people become victims of foreclosure because they cannot keep the pace with their monthly repayments. You’ve signed a contract, and you knew that it was secured on your house; therefore you were always at risk of losing it if you fail to make payments. But not all is lost, even when you’re on the brink of this abyss.

Why Foreclosure Is Bad for Both Parties

Receiving a foreclosure notice is every indebted person’s worst nightmare. The foundation of your world crumbles; you panic and think you’re going to end up on the streets.

In some cases, that is not far from the truth. With all these, not many people are aware of the fact that foreclosure is a “lose-lose” situation. Why? Let’s imagine that the collateral you’ve secured the loan on is your house.

When foreclosure is involved, the bank will try to get some of the money you owe back by selling the house. If there’s not enough equity in it, they’ll get only a part of the debt back.

So – how do banks prevent this from happening? Through a short refinance program meant to help the both of you.

What Is Short Refinance?

To avoid foreclosure, the lender will volunteer to refinance your mortgage. In this case, the financial difference between the two loans is wiped off. Why would he do such a generous thing for you?

Remember: the last person a lender’s doing this for is you. The process of foreclosure is incredibly costly and, as mentioned above, it is actually a financial loss for the lender, by no means a source of profit.

When foreclosure is initiated, you can stop paying your monthly instalments for a period of up to 12 months. That’s disastrous for the lender.

Does A Lender Have No Other Alternatives?

A lender has two other options, and these are not pleasant: a deed instead of a foreclosure or a forbearance agreement. The former can be less profitable than a genuine foreclosure. The latter is just an embargo anyway, so the lender would have to wait for the money.

A short refinance, as you can see, is the way to go for both the lender and the borrower. I think it’s pretty safe to say no one wants to let a bank continue with the foreclosure process. If your lender is empathic enough to present you this option, accept it.

You’ll be paying less interest, you’ll get rid of some of the debt (the difference), and you won’t lose your house. What more could you ask for when you risk living on the streets? Suing the bank won’t do you much help, either, because it’s obviously going to win.

Do Lenders Always Give People This Option?

No. Even if you propose this to them, they can decide against it. This will happen when foreclosure would make more financial sense to them. It’s cruel, that’s true, but banks are known for anything but their kind spirit when it comes to dollars.

All in all, it boils down to the total extent of the debt, as well as to the lender’s ability to understand why you could not stick to the repayment plan and default.

If you’re dealing with a good lender that actually wants to help you, make sure you listen very carefully, because you’re kind of a privileged person. This type of refinancing is handed out only when lenders want to do it.

The mere sound of the word “foreclosure” can cause goosebumps. Once the foreclosure is part of the conversation, you know you’re in some very serious trouble that can impact your entire life.

If you’re in this unfortunate position, ask about this refinancing method as quickly as you get the notice that informs of the foreclosure action. Don’t waste a single moment. If it so happens that the lender is unwilling to do this, ask about the alternatives.

Try to speak as much as possible about the fact that foreclosure would affect the both of you and that he could get his money back through this type of refinancing. For more info and financial help, contact Australian Lending Centre for a free consultation with one of our experts.

Tags refinancing

Refinance and Refinancing

Will Lender Approve a Home Loan With Unpaid Defaults?

Post author By Diane Challis
Post date 23 January 2018

A lot of people think that repaying unpaid defaults is important when it comes to being approved for a mortgage, but this isn’t always the case. Yes, you can get a mortgage without your defaults because there are many flexible lenders who are more than happy to approve your application despite a poor credit score. But don’t jump at the first home equity loan available-because lenders aren’t created equal. Here are some factors to consider when applying for a home loan with unpaid defaults.

1. Payment status

Mainstream lenders look favourably to applicants that carry mortgages with settled defaults than those with unpaid ones. Some creditors are concerned with the date default was registered and not when they were paid. Others also use certain parameters in assessing your risk—which includes all other financial information that could boost your eligibility for a mortgage.

2. Existing credit issues

It is difficult to get a mortgage if you have other credit problems. Lenders consider your debt-to-income ratio. So, if your debts are too high, it would surely have a strong impact on your eligibility, loan rate, fees and repayment terms. If you’re using payday loans, it will also affect your chances of getting a loan.

3. Amount of the default

Before applying for a home loan with defaults, it is important to consider how much your default amounts to. Most lenders can approve a loan for you despite a small paid default which is less than $500. If you have a paid default which is less than $1,000 and you have settled it more than 6 months ago, even prime lenders can lend you money, especially if your financial situation is already stable. If you have a bad credit because you have over $1,000 unpaid defaults, you may not have the best of luck with mainstream lenders. Nonetheless, a specialist lender can give you reasonable loan terms. But beyond that amount, you need an alternative lending specialist like Australian Lending Centre, especially if you have more than $5000 of unpaid defaults.

4. Type of loan

Default on secured loans

What would happen to your home loan application if you default on your mortgage? First and foremost, let’s look at the nature of the loan. It has collateral—which is your home. In case of default, your creditor has the legal right to foreclose on your home after issuing a notice to a client in default and asking you to make good on your payment—and you failed to comply. If the bank takes ownership of it and puts it up for resale at a public auction-you can redeem your property by paying the full amount of debt plus fees. Or, you can refinance your home loan using Australian Lending Centre’s Mortgage Arrears program to pay the total amount due even before the lender decides to foreclose your house.

Default on unsecured Loans

Unsecured loans aren’t as risky on the part of the borrower-although the risk of not being repaid is high for the creditors since there is no collateral that they can take in case of default. Not paying after 60 days can cost you late fees and increase. If you don’t pay yet, you’ll definitely have to look for the default status on your credit file. But, the government does not leave you unprotected. You still have to receive a default notice first.

If you have missed payments on your credit card or from a personal loan lender, you have the right to receive a Default Notice which specifies the number of payments you failed to pay and other requirements of the credit contract that you haven’t complied with.

The notice specifies the amount to pay and the period of time you have to do so. It will also warn you of the consequences of failure to pay within the period of notice-such as demanding repayment of the whole credit card balance or loan amount, not just the monthly balance you missed to pay.

How do I apply for a loan when I have unpaid defaults?

Default explanation letter

You have to increase your chances of approval by writing an explanation letter for your default with supporting evidence. For example, if you have missed payments because of sickness, temporary unemployment (but you’re employed now) you must provide evidence of the same. It will back up your explanation of why you defaulted on your loan.

Payment

Pay unpaid defaults and get the credit provider to update them into “paid” on your credit file before you submit your loan application.

Specialist lender

Apply with a lender like Australian Lending Centre that can accept borrowers with defaults. We can help with your home loan arrears, so we suggest that you talk to our financial specialists today at 1300 138 188 or Enquire now.

Tags debt default, Default, defaulting, home loan default, mortgage default, unpaid defaults

Refinance and Refinancing

Differences between Internal and External Refinancing

Post author By Diane Challis
Post date 5 December 2017

Without a doubt, refinancing can bring a range of benefits that enable you to repay your house loan on more favourable terms. Nevertheless, although we know the theory, sometimes it can be difficult to pinpoint whether a financial solution is the right one for us. That being said, today we will have a look at the differences between internal and external refinancing, and what each implies.

Essentially, refinancing is an excellent solution as it gives you the chance to fix your loan terms. Also referred to as balance transfer, this procedure implies selecting a mortgage that is excellently suited for your needs, when compared to your existing loan conditions.

Types of Refinancing

You can choose from internal or external refinancing. Internal refinance implies altering the mortgage but staying with the same lender. On the other hand, external refinance involves switching both the mortgage and the lender.

Irrespective of your choice, you should assess a range of elements, to ensure that the loan works for you. Next, we will evaluate the internal and external refinancing issue.

The Differences Between Internal and External Refinancing

According to an Australian Mortgage Council survey from 2014, more than 30 per cent of consumers aren’t satisfied with their existing lenders. Typically, this is caused by poor communication and deficiency of mutual understanding.

Another survey indicates that over 50 per cent reckon that they could get better deals if they switched lenders.

This is where refinancing could help.

If your current lender doesn’t comprehend your needs, you could choose another lender with whom you communicate better. In this situation, external refinancing could be your best choice.

Bear in mind that even though lenders aren’t permitted to charge exit fees on home loans, you could still be held liable for early repayment and break fees. Also, to get the most out of your refinancing offer, you should be outspoken regarding your long-term financial goals.

Internal and External Refinancing – the Downsides

No matter how much we discuss internal and external refinancing on the pro side, we must also take a closer look at the disadvantages. When it comes to refinancing, there are a couple of things that every customer should consider before requesting this service.

Firstly, you will need to check the market in order to find the best option for your loan. This can be a tricky thing because if you have little to no knowledge about internal vs. external refinancing, you might end up doing more harm than good to your finances. Ask an expert to see if the offer you found is good for your financial situation.

Another thing you will have to learn is that while a low-interest rate is a great thing, internal or external refinancing can come with a lot of fees and costs that you probably haven’t heard about. You will have to pay an exit fee; you will have to pay for all the documentation used and for the new loan.

Some customers may experience limitations with internal and even external refinancing. Some may have their refinance requests denied based on their financial situation or credit history. All in all, it is not as simple as one would expect.

In fact, if you don’t do the math, you might end up getting a bad deal and going back to the original loan might be near impossible. This is why research is detrimental, and that is why you will need expert advice if you don’t know how these services work.

When Is the Perfect Timing to Refinance?

According to research, more than 30 per cent of Australians aren’t acquainted with their loan’s interest rate. That being said, it is important to inform yourself regarding the amount of interest rate you pay on a monthly basis.

The good news is that, based on RBA Cash Rate, interest rates have diminished by 2.25 per cent since 2012, which is excellent especially if you want to consider refinancing.

Consequently, every few years, it’s best to review your home loan terms. The loan market is competitive. That means brokers offer compelling offers to attract new borrowers.

That being said, when it comes to internal vs. external refinancing, it’s all about selecting an offer that is more competitive than your current one, whether it’s from your existing lender or not.

Extra tip: Ideally, you should discuss this problem with your loan provider, who should indicate the amount of interest you currently pay. Afterwards, you can compare your interest rate with the ones on the market.

Final Thoughts

We hope that our article focusing on internal vs. external refinancing has been helpful. If you’re on the lookout for an attractive refinancing option on your home loan, make sure you visit www.www.australianlendingcentre.com.au. Our qualified experts are eager to offer you the most convenient offers! You also give you a free consultation for more information regarding this topic and other financial services and products.

Tags mortgage refinancing

Bad Credit Loans Refinance and Refinancing

Is Bad Credit Refinance Home Loan Right For Me?

Post author By Diane Challis
Post date 27 June 2017

Learn the criteria for determining whether to refinance or not.

The refinancing process can be daunting and confusing. It can also make or break your finances. So, before you get caught up in a pile of debt that you have to pay for a very long time, take time to study the costs associated with bad credit refinance home loan.

Here are some factors to consider when deciding to refinance a bad credit refinance home loan:

Lowered interest rate which is computed over the lifetime of the loan.

First, it is wise to reconsider refinancing if it changes the type of interest rate. Let’s say, Johnny originally took out an adjustable-rate mortgage with a 4-year fixed period. That means, when the 3-year period expires, the interest may fluctuate from time to time. If you don’t want to worry about the rates going up or down, it may be time to consider refinancing your home. Second, the new interest rate is at least 1% less than your current rate.

Supposing you currently have a 30-year fixed-rate mortgage loan for $400,000 with a 6.5% fixed interest rate. The new rates are at 5.5% interest. This could definitely reduce your monthly payment by over a hundred dollars and more than a thousand dollars in a year.

Longer loan term or period of amortization.

Let’s say you originally got into a 15-year home loan. To lower your monthly payment, you can switch to a 30-year mortgage through refinancing.

The overall savings is worth the transfer costs.

Loan redemption charges, admin fees and other costs of transfer are examples of once off transfer costs.

For example, the closing cost amounts to $4000 and your mortgage has more than 40 months on its term. If you can lower your interest rate by 1% p.a. and save roughly $100 a month in installment payments, you can save as much as $12,000 in the next 10 years.

If you divide $4,000 by $100, the break-even point, or the point at which you recover the $4,000 is 40 months (4000/100). In case you leave your home after two years that savings come to $2400 only. If you are not going to stay at least another 40 months in your house, then refinancing may not be a good option.

Assuming that the terms are the same, always calculate the savings and compare it to the refinancing fees before signing up your refinance application.

Is it wise to refinance my home loan?

Refinancing is all about crunching the numbers. Calculate the savings based on the changes in interest rates, loan amortization period and refinancing costs. If you can lower the payment every month and recoup the transfer costs within a year or two, go for it. Shortening the loan term is an added bonus.

There are many advantages of refinancing your mortgage. You can lower the interest paid over the loan’s lifetime, reduce your monthly payments and the total payments over the life of your loan. But, you have to consider the fess you need to pay to obtain the loan, the principal amount and the loan term. Remember that it is still a loan and you have to repay it. If you think you have the financial capacity to pay it off for another 15 years, then shifting from a 15-year to a 30-year mortgage may not be a bad idea after all.

Contact Australian Lending Centre today to learn more about bad credit refinance home loan.

Tags bad credit, refinance

Refinance and Refinancing Self Employed

Guide: Refinancing for Self-Employed Aussies

Post author By Christopher Riotto
Post date 30 April 2017

refinance for self employed

Being self-employed means that you’re going to have to put in a little more effort into finding the right refinancing solution for you. That’s exactly why we’ve put together a self-employed refinancing guide to help you get a clearer picture of what you should pay attention to, how to choose a loan and most importantly, how to find the best option for your needs.

Self-employed borrowers encounter difficulties when they’re looking to refinance their loan. This happens because financial institutions will take a closer look at their income and are sceptical due to not knowing how their business is going to progress.

This refinancing guide will tell you how to start when you’re self-employed.

Talk to a Lender

Finding the right refinancing package relies on how much you earn. According to your income, you’ll know the amount you can borrow and the limit.

Without taking to time to assess the situation, you may end up disappointed, so start slow and talk to a lender that will be able to give you some points on how to proceed and what you should know.

Do the Math

The second part of this refinancing guide is to calculate exactly how much you’ve made in the last couple of years. Two years is usually the amount of time relevant when discussing self-employed people.

Go through your records and place all your receipts in order.

Fill the Paperwork

Get your paperwork in order by gathering financial statements, a notice of assessments and income tax returns. Unfortunately, having a successful business doesn’t get you a free pass on all of these.

Although it’s time-consuming, without the necessary papers, it would be harder to convince a lender that your business is doing well and you can afford to refinance.

Are You Really Self-Employed?

Many people confuse being self-employed with sub-contracting deals or being a contractor. Some lenders might think that as long as you work for others, you might pass as an employee, which could help you skip some steps involved in this refinancing guide.

Be Honest about Your Expenses

A new piece of equipment, a few more employees or a training course might have raised your expenses the last year. Don’t try to hide them from your lender and explain the situation. There’s always a solution, even though it may not be obvious to you just yet.

Adequate Taxable Income

Unfortunately, this is one of the hardest requirements for a self-employed person. Saying and proving that you can afford to refinance a loan are two different things.

An adequate taxable income is a sort of like your green pass when looking into refinancing. Try to get the necessary paperwork to also prove it.

This guide to refinancing for self-employed contains the significant steps that you’ll have to make to refinance your loan when you are self-employed. There are benefits and drawbacks when you work for yourself, but seek professional advice if you’re having doubts about how to proceed.

Tags home loan refinance, home loan refinancing, loan refinance, mortgage refinance, mortgage refinancing, refinance, refinance process, refinance your mortgage, refinancing, refinancing self-employed, refinancing your mortgage, self-employed

Refinance and Refinancing

4 Important Considerations Before you Refinance Your Home

Post author By Diane Challis
Post date 5 March 2017

Are you planning to refinance your mortgage? If so, here are some important considerations to take into account before you refinance your home.

What is your purpose for refinancing?

Refinancing is a type of debt you will get. So, it is important to determine the whys and wherefores before securing it.

People often decide to refinance their mortgages because of the following reasons:

Lower the current interest rate.

Lowering your mortgage by two percentage points can make a noticeable difference in your portfolio. So, if the original mortgage rate is higher than your refinancing option and the monthly payment will be lower, then you might consider refinancing.

Pay for the closing costs of the original loan.

Homeowners who do not have the funds to bring to the closing table can transfer the closing costs of the initial loan to the new loan.

Invest into retirement.

Homeowners who are nearing g retirement can take advantage of short-term refinance mortgages. They can use the proceeds of the loan to invest in a diversified portfolio. While it is not advisable for those who largely depend on the market for retirement income, retirees with a steady flow of income and large pension don’t have to worry. After all, increasing the number of your finances can help you generate growth even after retirement.

Other viable reasons include managing your credit to improve your credit scores, changing loan type, shortening loan term, and getting cash for home improvement. You can also access the equity in your home to cover important personal expenses and deal with life-changing events such as a wedding, divorce, sickness and financial losses. Refinancing is also a good option for those who plan to consolidate their debts and use cash-out refinance to pay for credit card debts with high interest.

In short, refinancing is a good option for people who need instant cash, and those who want to get out of debt fast, reduce their loan payments, strengthen their portfolio and invest into the future.

How long will you stay in your house?

If you don’t see yourself staying in your property for the next 15-years, or so, when your loan term is longer, then refinancing may be a costly choice for you. Aside from the fact that you cannot move anytime soon, the closing costs would outweigh the savings you accumulated from refinancing your mortgage.

What is the value of your home?

The cash you can get and the interest rate depends on your home’s value. Talk to a licensed appraiser to determine the value of your home, so you can decide whether or not you can make some improvements to increase its value and the chance of getting refinanced.

What are your options?

While traditional financial institutions offer refinancing products, an experienced and highly reliable alternative lender like Australian Lending Centre can help you find the most suitable loan products, based on your needs.

You can talk to our refinance specialists to get the best interest rates, regardless of your credit history and financial standing.

Tags closing costs, investment, lower interest rate, original loan, refinance, refinancing, retirement

Refinance and Refinancing

Refinancing Analysed: Pros and Cons

Post author By Diane Challis
Post date 1 March 2017

Refinancing can be a convenient option in many cases, regardless if you are hoping to get a better interest rate or attempting to consolidate your existing debts. However, it can prove to be pretty tricky in the long run, which is why you may want to learn everything about the refinancing pros and cons.

This option may be perfect for one borrower and a disaster to another. This is why you need to do your homework and read the points below before switching to another loan system.

When Refinancing is Beneficial

When it comes to refinancing pros and cons, there are definitely some benefits you can reap by making the switch. Here are the main ones:

Getting Access to Equity – You can use the equity you collected in your loan for other things such as investing, renovating, buying a new car or going on a vacation.
Getting a Better Rate – You can get a better interest rate by refinancing, which means that your payments will also be lower. This could, in turn, save you a lot of money.
Increase Your Mortgage Length – By increasing the length of your payment, you will have a smaller monthly fee. However, you may end up with a higher interest, causing you to pay more in the long run.
Decrease Your Mortgage Length – The same can apply in reverse if you reduce the mortgage length. Not only will you get rid of the debt sooner, but you will also pay less in interest than before.
Eliminate Fees – You can sometimes get out of paying certain fees by refinancing a loan. If your current loan has built-in fees for additional features that you may no longer need, a refinance may help you get rid of some of these charges.

Refinancing can be a great way to make your payments easier, but you need to be aware of all the refinancing pros and cons before proceeding.

The Drawbacks of Refinancing

Just as there are refinancing pros, there are also particular cons. When checking out refinancing pros and cons, here are the few risks that you need to keep in mind.

Lender’s Mortgage Insurance – Whenever you get a loan, you need to pay insurance to the lender. If you change your lender, it means that you may have to pay that insurance again, even if you already paid it before. This may undercut most of the savings you hoped to get with the refinancing.
Longer Loan Duration – Refinancing means that you may have to pay for longer than you originally had to. This might put a damper on your plans if you had the intention to move out.
Extra fees – You may be required to pay certain exit fees from your own pocket, and these aren’t exactly cheap. Plus, you may be forced to pay even more entry fees upon refinancing.

Refinancing can be a great way to save some money due to its benefits. However, depending on the circumstance, this process may get you paying more than you should have if you are not careful enough. Keep in mind all these refinancing pros and cons before deciding.

Tags Financial Planning, home loan refinance, loan refinance, mortgage refinance, mortgage refinancing, refinance, refinance process, refinance your mortgage, refinancing, refinancing self-employed, refinancing your mortgage

Refinance and Refinancing

Why Should You Consider Refinancing Your Home Loan?

Post author By Diane Challis
Post date 5 February 2017

People take a home loan refinancing into consideration when they’re no longer satisfied with their actual home loan or when they want to make some house renovations.

Refinancing becomes a choice when your lending needs have changed or when your home loan is starting to pose difficulties.

Home Loan Refinancing has lower interests rates

This is the main reason why Australians take into consideration refinancing their mortgage. The easiest way to figure out if it’s worth the trouble to switch your home loan is to calculate if the costs of the refinancing will be paid off in the next two years.

Interest rates and fees can build up, so don’t just look at the lower interest rate that comes with refinancing. Take into consideration all the fees implied in the process.

It’s more compatible with your renovation project

Home loan refinancing brings benefits to homeowners who desire to invest in structural renovations that aren’t compatible with personal loans.

Refinancing allows you to use the equity in your property as collateral. This is an option only if the value of the house outpasses the cost of renovations.

Some home loans don’t offer the option for a construction loan, so you may just have to go into refinancing in order to find one that fits your needs.

Consolidating debts is a good option

Home loan interests rates are lower, and this is why many people add their personal loan or car loan to their mortgage. Dividing the payments over the course of the next 25 to 30 years will ensure much smaller monthly payments, but raise the interest rates.

You could benefit from this option of refinancing if discipline and regular payments are something that you’re used to. You could add a personal loan to your house loan, but instead of paying it off for 25-30 years, choose to pay it over the course of the next five years. This will allow you to sort your personal debt faster and even save almost 75% of the interest rate that you would have spent by prolonging the payments to suit your house loan.

Refinancing offers flexibility

If you’ve come to the point where a fixed rate isn’t your best alternative, and you want and actually can pay out the loan faster, then home loan refinancing is an alternative. Being able to pay according to your income will get you out of debt faster, and it also comes with the split facility, a redraw facility, and an offset account.

When mortgage payments are too big

Sometimes, our finances can’t support the mortgage payments and we’re forced to look for an alternative that requires a smaller amount per month. Even though the interest rates could go higher, there are times when our budget isn’t able to cover the payments, so refinancing is in order.

Home loan refinancing comes with advantages and disadvantages, so before taking the step, see if it will suit your needs!

Tags home loan, home loans, investment, loans, mortgage, mortgage repayments, mortgages, refinance, refinancing

Debt Consolidation Interest Rates Personal Loans Refinance and Refinancing

Interest Rates, What Do They Mean For Us ?

Post author By Diane Challis
Post date 8 November 2016

Interest rates – They’re unavoidable when it comes to getting a loan, but knowledge is power… If you are aware of what interest rates mean then you can take advantage of them. Read on to find out more…

What’s happening at the moment?

After reaching a record low of just 1.5% in August this year, the reserve bank has remained faithful that the cash rate will act as a catalyst for economic growth. Glen Stevens, the governor of the RBA stated that “overall growth is continuing at a moderate pace, despite a very large decline in business investment”. So, the economy is functioning at a
“moderate pace” but business investment is low. It seems that current economic growth has therefore been offset against consumer consumption. I mean there are many factors to which the Australian economy relies on for growth. One of those factors is business investment. But a recent decline in investment must be met with an increase in both consumer and government expenditure for the economy to operate at a “moderate pace”. Now the Australian budget for the 2016-2017 financial year was recorded at -2.2% of GDP, 0.2% improvement from the 2015-2016 budget outcome of -2.4% of GDP. The trend, a decrease in government expenditure. Therefore, one could come to terms with the fact that the government is becoming more interdependent on consumers to fund economic growth. At a time where the cash rate is just 1.5% the risk in today’s financial markets is low. Inflation is currently subdued at 1.3% – which is well below the RBA’s target of 2-3% – prices are flat across the economy. I honestly wouldn’t be surprised if I saw a half of Australia’s banking sector at Bondi Beach.

Act now or Act later?

My suggestion, get busy spending. Refinance your loan, seek personal loans, many brokers will help in providing short term loans. If you have debt that needs to be consolidated, do it now. Of course, you can wait, and even then I wouldn’t suggest you refrain. Franklin Templeton – which had $733 billion of assets under management at the end of September – is betting that the RBA will cut the cash rate two more times, indicating a positive direction for consumers who wish to borrow by mid-2017. But like the missus, the future is an unpredictable game, where the odds are skewed. Either way, saving is a non-viable option and many Australians have recognized this trend with the Australian Household Savings Rate declining from 8.8% in the July quarter of 2015 to 8% in the July quarter of 2016. Today is a period which is conducive of wealth building, the economic conditions are right for it. So get started, I know I have.

Home Loans Interest Rates Refinance and Refinancing

Do Rentals Mean Losing Money?

Post author By Diane Challis
Post date 29 December 2015

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.

Tags buying, home owners, home ownership, money, rentals, renting

Refinance and Refinancing

Home Repossessions Becoming More Common in Australia

Post author By Diane Challis
Post date 23 May 2011
No Comments on Home Repossessions Becoming More Common in Australia

In 2009 more than 30,000 homes in Australia will be repossessed or foreclosed and almost half a million Australians plunged into severe mortgage stress by the end of the year, according to a new industry report.

Repossession Across Australia

Repossession occurs when you can no longer meet your mortgage repayments on your home loan and your bank or lender takes over your home and sells it in what is called a mortgagee sale. In an optimistic property market, this might well leave you with some money, but in a weak market, there’s a chance you will walk away with nothing.

One third of the expected repossessions will be first time home buyers who purchased their property in the last 12 months, the monthly Fujitsu Mortgage Stress report predicts.

Tags australian home market, foreclosed, foreclosure, repossession

Refinance and Refinancing

Home Owners Struggle – Time to Refinance

Post author By Diane Challis
Post date 20 May 2011
No Comments on Home Owners Struggle – Time to Refinance

Australian home owners are predicted to spend the remainder of 2010 forking out 50% of their income on debt repayments.

A recent study shows that more than 40% of Aussies spend about half of their monthly income on repaying home loans, credit cards and/or personal loans. This survey also indicates that many Australians have little cash left over to play with at the end of the month – which only goes to show that every time the Reserve Bank of Australian (RBA) and major banks increase interest rates, a majority of home owners struggle further.

Tags consolidate, consolidation, debt repayments, home loan refinancing, refinance, refinancing

Refinance and Refinancing

Aussies in Debt

December 2009 was the largest monthly spend by Australians in history, increasing the average credit card balance to $3,250. The majority of Australians are well aware of the risks involved in leaving credit card debt unpaid. A popular solution to credit card debt is to consolidate your debts into one loan. Aussies in debt is a growing concern, if you are struggling with debt try consolidation.

Over the recent holiday period, Australians demonstrated their confidence that we are coming out of the Global Financial Crisis (GFC) fairly unscathed. This was evident by the December spending peak of $22.02 billion, which was a vast jump of $2 billion from November.

On the average debt of $3,250, credit card spenders making minimum repayments of $100 will take years to repay their balance. However, Australians can save themselves on interest repayments by comparing rates to get the best deal. Another popular credit card debt solution is a consolidation loan. They are perfect for those who need to consolidate multiple credit cards, store card debt and personal loans and can drastically reduce the amount of interest you pay.

Tags credit card debt, Debt Consolidation, debt help

Refinance and Refinancing

Now is the Time to Refinance

Post author By Diane Challis
Post date 20 May 2011
No Comments on Now is the Time to Refinance

After the RBA’s decision this week not to increase interest rates at present – home owners should consider refinancing right now.

Refinancing your home loan can allow you to access cheaper interest rates or even unlock the equity in your home to renovate, buy an investment property or consolidate debt.

Some of the advantages of refinancing a loan include:

Lower monthly repayments when you refinance
The ability to pay off multiple debts through refinancing schemes
Reduced risk by changing from a variable rate to a fixed rate when you refinance
Access to cash to cover major expenses when you refinance

Tags consolidate debt, Debt Consolidation, refinance, refinancing

Refinance and Refinancing

Home Loan Stress from Interest Rates Hike

Post author By Diane Challis
Post date 20 May 2011
No Comments on Home Loan Stress from Interest Rates Hike

As some of the big banks have raised their interest rates higher than the Reserve Bank, many Australians are looking for a way to defuse their mortgage stress.

By refusing to pass on all interest-rate reductions, inflating the Reserve Bank’s increases or adding hikes of their own, the banks have widened the gap between the cash rate and their key interest rates by as much as 1%.

If you’re struggling with home loan repayments you may want to consider refinancing your home loan. Refinancing can allow you to access cheaper interest rates or even unlock the equity in your home to renovate, buy an investment property or consolidate debt. The Australian Lending Centre has years of experience helping people to refinance to achieve these goals.

Tags home loan stress, interest rate hikes, interest rates, refinance, refinancing

Refinance and Refinancing

Refinance for a Better Home Loan

Post author By Diane Challis
Post date 20 May 2011
No Comments on Refinance for a Better Home Loan

It is estimated that 30-40% of home loan applications are people interested in refinancing their mortgage.

More than two-thirds of people who refinanced their home loans recently were able to secure a lower interest rate, a mortgage broker’s survey shows.

Tags better interest rates, mortgage repayments, refinancing your mortgage

Refinance and Refinancing

Time to Refinance

A recent industry study has shown that 38% of all mortgages arranged in May were for refinancing purposes, while only 15.4% of all mortgages were sold to ‘upgraders’.

Investors accounted for 36.7% of all activity, while 9.9% of all mortgages arranged in May were for first home buyers.

If you want a better interest rate or to reduce your monthly repayments, now is the time to consider refinancing. Even if you simply want to tap into your home’s equity and free up some money to invest, renovate or even consolidate debt, a new home loan can meet your changing needs.

Tags loan refinance, loan repayments

Refinance and Refinancing

Desperate Mortgage Stress Fuelled by Rate Hikes

Post author By Diane Challis
Post date 12 May 2011
No Comments on Desperate Mortgage Stress Fuelled by Rate Hikes

Australian home owners are falling into increasing despair as interest rates continue to rise. Mortgage stress is hitting hardest even in what are deemed the more affordable parts of state areas.

As home owners struggle under the climbing mortgage repayments nation wide, more and more Australians are falling into debt. New figures released by debt collector and credit reference group Dun & Bradstreet expose a sizeable 12% increase in the number of debts referred for collection in 2007. Struggles to meet these mortgage repayments have ensured “unprecedented levels of bankruptcy and repossession and loan defaults” as Australian Property Monitors general manager Michael McNamara stated.

Mr McNamara described “Property prices have increased 250 per cent since 1996 but mortgage debt increased by five times in the same period.”

With so many Australians living on the knife’s edge, it is of no surprise people are looking for ways out. Loan Market chairman Sam White advised struggling borrowers to “consider re-financing” before it becomes too late.

If you need assistance with refinancing your mortgage debts, ALC can help. Contact us now on 1300 138 188.

Tags mortgage debt, mortgage refinance

Refinance and Refinancing

Consumers Unhappy With Their Mortgage

Post author By Diane Challis
Post date 16 February 2011
No Comments on Consumers Unhappy With Their Mortgage

In the financial market today, competition among banks and lenders tends to run high to try and land clients. As the consumers are first pulled in by flashy mortgage offers and promises, once the initial honeymoon stage phases the consumers find something they are unhappy with.

In a recent report released by a professional in the industry, they claim about 47% of current mortgage holders are not satisfied with their current mortgage. The majority of the unhappy mortgage holders feel that changing their home loan will be too hard or cost too much in time and money.

Refinancing is the solution to the misconception that changing home loan providers will not improve their situation. Choosing to refinance your home loan is a great option to take advantage of lower interest rates or to source additional cash available from the equity in your home. As this is becoming a more well-known issue, providers are offering increasingly competitive rates and incentives to choose a refinancing product.

Australian Lending Centre has done the leg work and found some of the most competitive refinance products available on the market today, which ultimately will save you time and money as we’ve done the research for you.

Through the refinance process, your current home loan will be paid out in full and you may be able to also pay out additional loans or release some funds in your home loan for a project such as home renovations. The new home loan will often utilise a lower interest rate and also should provide you with a lower monthly repayment.

In addition to refinancing, Australian Lending Centre offers products such as debt consolidation that will allow you to control and eliminate your debt. Debt consolidation focuses on all the debts you have; a personal loan, credit cards, etc and combines them all into one lump sum loan. Similar to refinancing, it creates an easier loan to manage with one low interest rate and one monthly payment. As we have many lenders available, we are sure to provide you with excellent options.

If you are unhappy with your current mortgage or are drowning in debt repayments, contact Australian Lending Centre today on 1300 138 188. Our debt consolidation consultants will assist you in find the best option. Alternatively, complete the enquiry form on the right and a debt consultant will contact you shortly.

Tags home loan, refinance process

Refinance and Refinancing

Benefits of Downsizing Your Home & Mortgage

Post author By Diane Challis
Post date 30 August 2010
No Comments on Benefits of Downsizing Your Home & Mortgage

The amount of people downsizing to smaller homes is adding even greater pressure to property prices as empty-nesters and households under financial stress compete with younger families and investors for homes in the popular middle-price ranges.

Job losses, family separations, the global financial crisis and lifestyle changes are some of the main reasons people are downsizing. However, increasing demand from these buyers is pushing prices up, wiping out much of the expected savings. Empty-nesters and retirees, in particular, are often now faced with little or no extra cash left over after they sell the family home and downsize.

Then why downsize?

Downsizing your home & mortgage is generally a good idea, but it only works if the new property gives both the kind of swap in lifestyle and finances a person is looking for.

Downsizing your home is most commonly associated with empty-nesters and retirees looking for smaller spaces after the children have grown and moved out. However downsizing has also become a popular move for a growing number of homeowners as it makes a lot of financial sense. Families are buying smaller homes to reduce their debt – by selling up and buying a smaller and less expensive property, they can reduce their mortgage and create a comfort zone.

Downsize to reduce mortgage repayments

The monthly mortgage payment is generally the largest single expense consumers face. It often accounts for 30% or more of an average gross income, which accounts for 50% of net income. Downsizing your home can have a dramatic effect on your mortgage repayments. At the very least, it can result in a significant reduction in your monthly expenditure, a significant increase in your cash flow and massive savings in interest over the term of your mortgage.

When you downsizing into a smaller home, you will naturally incur reduced expenses, such as a lower heating bill (as there obviously is less space to heat) – and this is just one of the savings opportunities that will become available to you. Consider this – if by downsizing your home you are able to save $600 per month, that turns in to $7,200 per year, which is a massive saving of $72,000 over the course of a decade. Think of what you could do with that money in ten years: take a well deserved overseas holiday, pay for your children’s weddings or tertiary education, or perhaps even invest it into another property.

To learn how the Australian Lending Centre can assist you to decrease your mortgage repayments simply fill in the enquiry form to your right or call now on 1300 138 188 to speak with a loan consultant today.

Tags mortgage repayments

Refinance and Refinancing Debt Consolidation Home Loans

Top Reasons for Refinancing Your Home Loan

Post author By Diane Challis
Post date 29 July 2010
No Comments on Top Reasons for Refinancing Your Home Loan

You may have heard a lot about the mortgage term ‘refinancing’. Used effectively, refinancning your home can be a great way to consolidate debt, release home equity and get a better interest rate.

Refinancing Explained

To refinance your mortgage (or home loan) refers to the replacement of an existing home loan with a new home loan, with different terms and usually increased savings.Top Reasons People Refinance their Home LoanThe top reasons people refinance their mortgage includes:

To get a lower monthly mortgage payment – this is achieved by refinancing into a new, lower-rate home loan. It could be a fixed rate loan, a variable rate loan or a split rate loan (which is a combination of both).

One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%. However, many lenders say 1% savings is enough of an incentive to refinance.
Investopedia

Refinancing Your Home To Consolidate Debt

Like the majority of Australians you could have a number of debts – generally a home loan, personal loans, and the dreaded high interest credit card balance. These multiple debts involves juggling lots of different repayments of different amounts at different times of the month.

If you refinancing your home loan you could provide an opportunity to simplify your debt. This has the potential to reduce the high interest you may be paying on all your debts. This process is called ‘debt consolidation’. Debt consolidation combines several high interest debts into a single lower rate debt, possibly your mortgage, which could reduce, or at the very least simplify, your total monthly repayments.

Do note however that debt consolidation has some negatives. A short term loan such a personal loan becomes a long term debt (your mortgage), and that can result in interest on the balance for a longer period. If you aren’t savvy, it could cost you more in the long run.

Debt consolidation can be truly cost-effective, if you commit to making additional repayments to pay off the bigger loan as quickly as possible, thus taking advantage of the lower interest rate.

Refinancing a home loan to access home equity

Your home is probably one of your most valuable assets. With optimising you home equity you can work towards building additional wealth or achieve personal goals.

You can refinance your home loan to draw cash from your home’s equity for the purpose of either debt consolidation, home renovations, investments or simply to have access to some extra cash.

To reduce or alter risk

If you currently have a variable rate home loan, but now feel as though you would benefit from fixed payments, you can refinance your home loan into a new fixed rate loan to better meet your changing needs (or vice versa: change a fixed rate to a variable).

To pay off your mortgage sooner

If you want to pay your home loan off sooner, you can build up the equity in your home quicker by refinancing into a new home loan that allows you to accelerate your repayment schedule.

Tags home loan refinance, low rate home loan

Refinance and Refinancing

Borrowers Refinance While Rates Are Still Low

Post author By Diane Challis
Post date 29 June 2010
No Comments on Borrowers Refinance While Rates Are Still Low

With interest rates broadening between loan providers and some borrowers feeling frustrated with a lack of customer sympathy from their lender, now is the perfect time of year to decide whether you can work within the features of your current mortgage to improve your cash-flow, or if you’re better off opting to refinance to a new home loan that better meets your needs today.

When considering whether the time is right to refinance, it’s important to know that there are a range of options that mean you can save over the long term.

Refinance Options:

Refinancing to a lower interest rate than you presently have. It goes without saying that a lower interest rate means you will save money, but also consider the Reserve Bank of Australia will most likely increase interest rates again in the coming months so grabbing your opportunity of a lower rate now is sensible.
Switching to fortnightly payments instead of monthly, which not only lessens the impact of paying one large lump sum each month but also means your home loan will be paid off sooner.
Refinancing can also include consolidating any credit card debt, store card debt and personal loan debt (which is accumulating high interest) into your mortgage. Refinancing these debts into your new home loan will allow you to concentrate on paying off one lower interest loan and can possibly save you thousands.
Refinancing can allow you to switch to, or from a variable or fixed rate home loan. You may want to take advantage of a low variable rate while it’s available, or perhaps you would prefer to lock in an interest rate you’re comfortable with by choosing a fixed rate which can reduce the risk of higher repayments in the future.
Another option is directing any savings from other accounts into your mortgage, consequently lowering the principal and reducing your repayments.

Another reason many Aussies are choosing to refinance is to gain access to the equity in their homes. This can be done for a variety of reasons, but commonly people are unlocking their home equity to renovate, purchase an investment property, take a holiday, plan a wedding, purchase a vehicle, pay some outstanding bills or simply to have some extra money to play with.

Another end of financial year is upon us, so if you can benefit from refinancing, now is the time to get your financial affairs in order. Simply fill in an enquiry form to your right or contact one of our refinancing consultants today on 1300 138 188.+++

Tags credit card debt consolidation, investment property loan

Refinance and Refinancing

Refinancing Explained

Refinancing is a term we hear more and more these days, but what does it actually mean? Below is refinancing explained

Basically refinancing is where you take out a loan, in order to repay an existing loan. Refinancing allows you to modify your mortgage, to better suit your changing needs.

Many people choose to refinance when their circumstances change – some are fighting back against rising interest rates, others have experienced changes to their employment status or relationships at home. You may refinance your mortgage by switching to a different lender, in order to take advantage of a lower interest rate, therefore reducing your mortgage repayments and saving on interest over the life of the loan.

Many people refinance their mortgage, as a means to borrow additional funds. This is done by using the equity that they have built in their property. Refinancing is commonly used by people wanting to; renovate or landscape their home; buy a new car; go on a holiday or even pay for a wedding.

Refinancing is also a popular way to consolidate all of your debts into one repayment, generally with a lower interest rate. This can include debts such as credit card debt, store card debt and personal loan debt.

Benefits of Refinancing Explained:

Make improvements to your home i.e. renovate
Consolidate your debts
Change to a lower interest rate
Change from a variable rate to a fixed rate interest rate; this enables you to have control of your monthly repayments
Change from a fixed to variable rate, this enables you to pay off your home loan faster
When you refinance you can gain access to cash for major expenses

A large majority of people assume that their application for a loan will be turned down due to having bad credit history. However, many homeowners have succeeded in refinancing their mortgage despite having a bad credit rating. In many cases refinancing your mortgage may improve your bad credit rating as it shows you were successful in obtaining a loan.

At the Australian Lending Centre, we believe every person should have the opportunity to lock in a better deal, including those with past credit issues (such as a bad credit rating). What makes us different is our ability to help people the banks have turned down. If you’re tired of mistakes in your past constantly haunting you when you apply for a loan, then talk to us – we understand circumstances do change. Simply call 1300 138 188 or fill in an enquiry form to your right, and we will contact you shortly.

Tags refinance

Refinance and Refinancing Home Loans

Advantages of Refinancing

Post author By Diane Challis
Post date 26 November 2009
No Comments on Advantages of Refinancing

Refinancing refers to the process of paying off your current loan with a second loan. If the timing is right for you, refinancing can be a very beneficial exercise and may ultimately save you thousands. Learn the advantages of refinancing here.

When is the best time to refinance your mortgage?

Refinancing your mortgage works best when the interest rates are low. If they aren’t lower than your current rate, then refinancing is probably not worth your while. The idea of refinancing your home loan is for the likelihood that the monthly repayment amount will be reduced noticeably resulting in a considerably lower home loan repayment in the long-term.

How do you measure costs and advantages of refinancing my home loan?

There are advantages and disadvantages to refinancing your home loan. The idea is to understand what you’re in for with your particular situation. For some people, the best method when considering whether to refinance is a simple comparison.

Compare all the costs of your current home loan to the new loan over a future period. Since the loan period may vary according to how steadfast your repayments are, just make the best guess as to how long you will have the new home loan. If the total costs are going to be lower with the home loan, then you should refinance.

How much are you able to borrow by refinancing your home loan?

Most lenders will consider the following four aspects when assessing your home loan refinance application.

Your ability to pay. It is important that you have a regular income.
Your credit history.
All other monetary obligations. It is important for a lender to understand your current financial commitments so that they can determine if refinancing is going to be the best option for you.
The value of your property. This is usually in the case of home equity loans.

The advantages of refinancing are astonishing, provided that the situation is right for a home loan to refinance. What makes it stand out is the fact that it can cost you less compared to most loans and refinancing can be very effective to consolidate high-interest debts.

If you would like to speak with a consultant to find out if refinancing is the best option for you, please call 1300 138 188 today, alternatively fill out an enquiry form on the right and a consultant will contact you shortly for a free appraisal.

Tags interest rates, refinance, refinance your mortgage, refinancing

Refinance and Refinancing

Generation Y Expects the Parents to Help Financially

Post author By Diane Challis
Post date 12 June 2009
No Comments on Generation Y Expects the Parents to Help Financially

A recent research project has revealed that two-thirds of Generation Y (16 to 29 year olds) expect their parents to help them out by paying their rent, assisting in purchasing a home, paying for their wedding and purchasing a car.

The research uncovered a concerning disconnect between what Gen Y expect from their parents in terms of financial support and what parents are now able and willing to provide.

Unfortunately for Generation Y, it has become evident through another study that 70% of baby-boomers (Gen Ys parents) have suffered financially as a result of the global financial crisis. Baby-boomers themselves are in the midst of amending their own financial problems by refinancing, consolidating debts and using new and innovative methods such as Debt Agreements to assist with their own repayments.

The research shows that 44% of Gen Ys expect their parents to pay for all or at least part of their wedding, 40% expect assistance in purchasing a house and 34% expect financial support for their education.

However with these high expectations it was astounding to see that 65% of Gen Y admitted to having no knowledge of their parents’ financial situation.

With the alarming figures of debt this generation has, it may finally be starting to sink in that they need help with managing their debt and another credit card is not the best solution.

Generation Y has become the latest casualty of the economic crisis. Credit reporting agency Veda Advantage has revealed a large drop in Gen Y applications for personal credit. Veda Advantage’s May figures show a drop in all account credit applications, including hire purchase, credit cards, personal loans and mortgages. Gen Y credit card inquiries fell 26% and mortgage applications declined 5%.

If you are struggling to pay your debts, don’t rely on your parents to assist you, simply call Australian Lending Centre and find a solution that is suited to your needs. Dial 1300 138 188 to speak with one of our experienced consultants today.

Tags Financial Planning, generation y, parents help, personal assistance, personal loan