Tag: home loans

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Mortgage Home Loans Refinance and Refinancing

Refinance Your Home Loan: 5 Powerful Reasons to Save Big

5 Signs It’s Time to Refinance Your Home Loan
Discover 5 signs it might be time to refinance your home loan.

Refinance your home loan if you’re experiencing shifts in the market, changes in your credit score, or evolving life needs. But how do you know when it’s truly the right moment to make the switch? Below are five telltale signs that refinancing your mortgage may be worth exploring.

1. Market Interest Rates Have Dropped

Why It Matters:

If current mortgage rates are significantly lower than they were when you first took out your loan, refinancing can help you lock in a reduced interest rate. Even a small drop, such as 1% or 2%, can result in considerable savings over the life of the loan.

What to Consider:

  1. Closing Costs – Factor in fees and closing costs to ensure your monthly savings outweigh the upfront expenses.
  2. Long-Term Plans – If you plan to move or sell in a year or two, refinancing might not yield enough time to recoup closing costs.

Example:

If you originally had a 4.5% interest rate and today’s average is around 3.2%, you could save hundreds each month by opting to refinance your home loan, assuming you plan to stay put for at least a few more years.

2. Your Credit Score Has Improved

Why It Matters:

Lenders often reserve their best interest rates and terms for borrowers with higher credit scores. If you’ve been diligently paying down debt, making on-time payments, or have otherwise boosted your credit standing, you might now qualify for a better deal.

What to Consider:

  1. Current Credit Threshold – Check where your score stands. If you’re now in a more favourable credit tier, you could see a meaningful drop in interest.
  2. Other Debts – Refinancing at a lower rate may also free up funds for tackling other high-interest debts or boosting savings.

Pro Tip:

Use a reputable credit-monitoring service to verify your score’s improvement, then shop around to refinance your home loan at the best available rate.

3. Your Life Circumstances Have Changed

Why It Matters:

Major life events can drastically alter your financial needs and obligations. Perhaps you’ve switched to a more stable, higher-paying job, or you’re welcoming a new addition to the family. Conversely, you might be down to one income or planning to retire soon.

What to Consider:

  1. Budget Adjustments – A growing family may require a larger budget for childcare, prompting the need for lower monthly mortgage payments.
  2. Loan Term Options – Switching from a 30-year to a 15-year mortgage (or vice versa) could better align with your new goals.

Example:

If you’ve received a significant pay bump, a shorter loan term could help you refinance your home loan and pay it off faster while saving on total interest. Conversely, if your income has dropped, refinancing to a longer term could lower your monthly outlay and free up cash for other needs.

4. You Want to Tap Into Home Equity

Why It Matters:

If you’ve built substantial equity in your home—whether through property value appreciation or diligent payments—you may want to tap that equity for renovations, debt consolidation, or other major expenses.

What to Consider:

  1. Cash-Out Refinance – This type of refinance replaces your existing mortgage with a new, larger one. You keep the difference in cash.
  2. Borrow Responsibly – Keep in mind that increasing the size of your loan means more debt to pay off, even if you’re benefiting from lower rates.

Pro Tip:

A cash-out refinance can be more cost-effective than a high-interest personal loan or credit card debt, especially if you plan to use the funds for improvements that boost your home’s value.

5. You Can Potentially Save on Monthly Payments

Why It Matters:

Ultimately, many homeowners refinance to reduce their monthly financial burden. Whether you’re lowering your interest rate or extending your loan term, a smaller mortgage payment can free up cash for other goals, like savings or investments.

What to Consider:

  1. Break-Even Point – Calculate how many months it will take for your monthly savings to “repay” the closing costs. If you hit that point sooner rather than later, refinancing is likely worthwhile.
  2. Stability – If monthly bills are currently tight, lowering your mortgage payment can provide valuable breathing room.

Example:

If you manage to knock $150 off your monthly mortgage bill by choosing to refinance your home loan, that’s $1,800 saved per year—money you could direct toward an emergency fund or an investment account.

Is It Time to Refinance Your Home Loan?

Refinancing is a powerful tool when used strategically, lowering interest rates, adjusting loan terms, or accessing home equity can significantly boost your financial position. By watching market trends, staying aware of your credit score, and considering personal life changes, you’ll be well-prepared to decide whether it’s time to make the switch.

 

Ready to explore your refinancing options?

The team at Australian Lending Centre can provide insights tailored to your unique circumstances, helping you determine if now is the perfect time to refinance and potentially save thousands over the life of your mortgage. Contact us today to learn more about how we can help you unlock a brighter financial future.

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Home Loans Bridging Finance

Top Tips for Buying Property at an Auction

Buying your property at auction
Buying your property at 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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Home Loans

10 Reasons Your Home Loan Was Denied

reasons why you have been denied a home loan

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

1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. You Asked for an extremely small 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.

10. 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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Mortgage

When Is It Best to Apply for a Mortgage Without Your Spouse?

bad credit home loans

Applying for a mortgage is a tough decision to make, especially when you have a spouse and/or kids. There are cases when in fact it’s best to apply for a mortgage without your spouse. We’ll tell you all there is to know about mortgages and what helps you get your application approved, or what could get it dismissed.

Although starting a marriage and looking for a home might be a dream come true for most of us, applying for a mortgage is a rational decision to make. This takes time and ultimately, it might be smarter to apply separately for it.

Let’s see when it’s the best time to apply for a mortgage without your spouse:

If One of You Has a Bad Credit Score

Applying for a mortgage with your spouse means that both of your credit scores will be put on display for the lender to check and compare. Unfortunately, even if one of you has an excellent score, the one with the bad credit can bring both of you down.

The bank will pay more attention to the negative score even if the other score could balance the negative one. As a general rule, it would be best for both spouses to have a medium rating, rather than big discrepancies.

In Case of Identity Theft

There’s nothing worse than applying for a mortgage and finding out that someone has used your name, destroyed your credit score, made many debts and, in addition, had a high credit usage.

To avoid this, check your credit score regularly. As rare as it is, identity theft is hard to prove and it also takes time to sort out the situation.

If your spouse has fallen victim to this sort of crime, but you’ve already found the perfect home, applying for a mortgage on your own is a wise decision.

In Case of Excessive Debt

A high credit card usage is considered to be over 20% of the current loan you’ve taken. Applying for a mortgage when your spouse’s debt has a high-income ratio might come with a denied mortgage application.

If the loan is still approved, consider that you’ll have to deal with higher interest rates, so it might be best to choose to apply on your own.

If There Is No Credit Score

Let’s say that maybe a person has saved money, and never had to take on a loan. From the bank’s point of view, that individual presents a risky application. By not knowing anything about his/her finances and not having any proof that the applicant is trustworthy, the bank will be sceptical in approving the loan.

Your spouse’s non-existent credit history or a short one will certainly be detrimental when applying for a mortgage.

Start by checking both of your credit scores and then talk to a mortgage specialist to give you some advice. He/she will surely tell you if it’s best to apply together, or on your own.

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Refinance and Refinancing

Why Should You Consider Refinancing Your Home Loan?

Short Term Loans

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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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!

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First Home Buyer News

Should you access superannuation for buying a house?

superannuation for home ownership

It is every young family’s dream to buy a house to make into a home but with rising property prices, it is becoming more difficult for first home buyers to enter the market. A young family might not have much in the way of savings and it can seem impossible to come up with the minimum amount needed for a deposit on a mortgage. The Australian government, under Treasurer Joe Hockey’s suggestion, is considering letting people access their superannuation account for the purpose of putting that money towards buying a house.

Superannuation for a new home

The retirement funds are generally not allowed to be accessed until a person is the age of 60 but the federal government is taking a lead from other countries such as Switzerland, Canada and Singapore and thinking of letting people dip into their retirement funds early to invest into a home. The idea has gotten a lot of backlash from the opposition government and it probably should. Although the money is for that person to spend however they want, it also serves as a safety net to make sure that people can afford their needs when they get older. Instead of having the capital being held by the government at a secure interest rate and knowing it will be there in the future, it might soon be possible to take a risk and use some of that money in the real estate market.

The proposal hopes to have several positive and negative effects. Getting young families into homes is a major goal of the current administration. But the goal also includes letting people become more self-reliant and less dependent on the superannuation scheme. The 5% taken out of Australians’ pay cheques is usually something that all Australians are looking forward to one day. However there is a possibility that many will not have as much as they might have had when it comes time to enjoy their golden years if this proposal gets approved.

The access to retirement funds might just fuel home prices higher and have a muted effect on making homes more affordable. Any large decision like buying a home is already big enough and maybe it is not the best decision to risk your superannuation funds on the volatile property market. There are many ways to get the loans needed for a mortgage and with the current low interest rates it could be wiser to leave your superannuation alone and buy a house the old fashioned way.

The old fashioned way being; acquiring a home loan or a debt consolidation loan from a trusted bank or a trusted lender, usually at a more competitive rate. Speak to a financial consultant about the right type of loan for you and your family to buy a new home.

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Interest Rates

4 Reasons Why the Australian Reserve Bank has not Cut Interest Rates

interest rates||RBA Interest Rates

Australian Reserve Bank has not Cut Interest Rates

The Reserve Bank of Australia (RBA) has slashed interest rates to 3%, a record low, in November 2011. For the last 15 months, it has refused to increase or further cut it. The central bank has decided to leave the rates unchanged during its first policy meeting for this year, which was held in the first week of February. As it seems, the monetary policy of the country keeps the mode on a wait-and-see program.

Interest rates were last trimmed down to help spur possible growth after the then decade-long mining boom had indicated clear signs of losing its momentum. The economy somehow slowed in the entire 2012 because export demand for raw materials coming from the country eased.

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Financial Planning

How Can Financial Distress Impact Your Health

bad credit loans

The stress caused by the economic downturns and financial shortcomings can literally make you sick. This is quite logical. In the recent global economic downturn, many evidences were recorded linking financial distress to various health conditions. That link is not surprising.

In 2005, a research was conducted in the US to identify possible health implications of financial distress. That study explored specific health effects that are often and logically associated with financial problems. It surveyed random individuals from across the country.

The results showed that there are various perceived possible effects of financial stress on both physical and mental health. Financial problems and poor health are associated. Stress is the main health impact of job loss, piling debts, loan defaults, and budget shortages. From there, many other health conditions can possibly ensue.

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Bridging Finance

How a Bridging Loan can Help You Secure the Property of Your Dreams

bridge loan

A bridging loan is a temporary loan that is intended to ‘bridge the gap’ that could exist when a homeowner is still selling his house and when he is set to take another mortgage. In other words, when a homebuyer is purchasing a new home before completely selling his current house, the bridge loan can be a source of cash needed to pay the down payment of the new home purchase.

Bridging loans are supposed to use the buyer’s existing house as security. The facility can provide sufficient amount of money to fund the down payment, which is a requirement to buy and relocate to the new move-up home. There is doubt that a bridging loan can help you finally buy your dream house.

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Financial Planning

Calculating your Net Worth

how to calculate your net worth

Your net worth could be an effective indicator of your financial condition. It could measure your annual progress financially. In general, the net worth is the overall sum of all your current assets or properties minus the sum of all your liabilities. This way, you could instantly and clearly see if your assets are still bigger compared to your liabilities, which is the ideal scenario.

Calculate your net worth to determine your current personal financial performance. Do not worry if you think you would obtain a negative figure. Instead, be positive about it and set effective goals to emerge out from the situation. It would surely be helpful and more advantageous if you knew your present financial condition. Furthermore, computing net worth is not as difficult as you think it is.

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Interest Rates

Australian Economy is Growing – Interest Rate Impact

Australian Economy Snapshot

The Australian economy grew 1.2% in the second quarter of fiscal year 2011. That growth exceeded expectations of a 1% economic expansion. This surprised numerous economic analysts and market observers, who mostly predicted a slower growth in the period. According to some experts, the economic boost could be attributed to stronger performance of several sectors aside from mining, which for quite some time has been solely driving growth of national economy.

Investors look at this news as an additional positive development. A better performing Australian economy could translate to better profitability. Most company shares in the market have been rising following the announcement of the better-than-expected economic growth. The local currency is also gaining strength against the dollar, which is ideal for many businesses, especially those that require importation of raw materials. But what is the impact of this news to consumers, particularly to the interest rates?

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First Home Buyer

First Home Buyers Being Priced Out

bad credit home loans

In recent times it has become even harder for Aussies to get their foot in the door of the property market. First home buyers are quickly being priced out of the market, as investors are snapping up properties right in the midst of a housing shortage.

It seems as though our buoyant economy and strong job prospects have spurred established home owners to invest in property or upgrade their homes.

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Bridging Finance

Bridging Finance

bridging finance

Home owners have been making the most of rising property prices.  Sydney, Melbourne, Brisbane and Adelaide all had significantly more properties up for auction than on the same weekend last year, with 1991 homes listed, which was up from 847 last year.

According to Australian Property Monitors, the total weekend auction revenue was up $208 million on the same time last year.

Auction clearance rates in Sydney reached 70.7% at the weekend, up 6.7 percentage points from the same weekend last year.  But Melbourne was by far the busiest city for auctions, with 1072 properties listed for auction, 75.5% of which were sold.

Australian Bridging Finance

If you are selling or have recently sold your property and are in need of a quick short term loan, you should consider bridging finance.  Bridging finance is a very popular way to receive funds and fast, while waiting for your property to settle. Bridging finance is commonly used to assist with the completion of purchasing a new home before settlement on an existing property takes place.

Bridging finance can also be used to access funds for your business, or simply to pay some bills.  Whatever the reason is, if you need a short term loan or cash advance, call us today.

We have our own in-house funding pool, which allows us to facilitate short term funds for a range of personal, business or investment needs. Our loans are hassle free, and approved quickly which sees our clients returning to us time and time again.

A short term loan through the Australian Lending Centre offers competitive interest rates, requires minimal financials and gets approved quickly.

To speak with a consultant today to learn how Bridging finance or a short term loan from the Australian Lending Centre could assist you call 1300 138 188 or simply fill out the enquiry form to your right.