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Car Finance Refinance and Refinancing

How To Refinance A Car Loan?

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.

refinance car

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.
refinance car loan

What To Consider

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

  1. 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.
  2. 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.
  3. 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.
car loan refinance

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.

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Personal Loans Car Finance Refinance and Refinancing

What Is a Good Car Finance Rate?

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?

excited buying new car

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.

Get the best car finance rate
There is a lot to consider before applying for car finance

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:

  1. 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.
  2. 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:

  1. Lower monthly payment
  2. Lower interest rate
  3. Longer loan term
  4. 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.

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Refinance and Refinancing

The benefits of refinance

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.

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Refinance and Refinancing Home Loans

5 Things To Consider When Refinancing Your Home

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

What is a home refinance?

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

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

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

Pros of Home Refinancing

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

Reduce Monthly Repayment

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

Debt Consolidation

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

Greater flexibility

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

Drawbacks of home refinance

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

Extend a Loan’s Term

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

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

Closing Costs

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

Consider the following

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

Know Your Home Equity

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

Know Your Credit Score

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

Your Debt to Income Ratio

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

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

The Cost Of Refinancing

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

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

Know Your Taxes

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

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

Bottom Line

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

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Mortgage Business Loans Renovation Loans

How to Get an Affordable Second Mortgage

By getting an affordable second mortgage on your property, you are not only increasing your borrowing power — but you can use the extra money for your other needs. If you planning to increase your overall borrowings, but you have an existing mortgage, the easiest approach is to refinance it for a higher amount. One of the most important considerations in getting a second mortgage is reducing your balances by up to 50 per cent! You may ask, “How is it even possible?”

The truth is that a lot of people incur interests due to unpaid mortgages which build up over the years. In doing so, they are not only reducing their home equity, but they are also putting their homes at risk of foreclosure. So, if you can successfully negotiate your balance reductions and avoid foreclosure of your property at the same time, grab that chance. It does not only help you save money and at the same time avoid legal actions that may damage your credit status.

Here are tips to help you get the most practical and most affordable second mortgage possible:

Research is key to an affordable second mortgage

You can search for public forums and blogs that talk about the best second mortgage options available for someone with the same situation as yours. It will help you filter debt settlement companies that are willing to work on your case for a fee. By doing your research, you will understand the importance of negotiating for balance reduction, the expenses you have to pay in the process and the available options for you in your area. Just make sure that you know how to filter objective from subjective advice. Otherwise, you may immediately take up an expensive service when there are less expensive ways of solving your mortgage problems.

Weigh the Pros and Cons of Second Mortgages

In reality, it only makes sense to get a second mortgage when you don’t have ready access to funds but want to pay for your mortgages and other high-interest debts. It is also a practical and low-cost alternative for those who want to start a business. Some people who are in serious debt also use second mortgages to consolidate debts. Before applying for an additional mortgage, ask yourself if it is possible to meet your financial need without getting another debt. Or, if the proceeds of the extra money you will get are worth the interests you have to pay for a long period of time.

Choose the right lender

Some mortgage applications take a lot of time. If you don’t want a very time-consuming process, like those in banks which discourage low-income applicants with low credit scores to apply by implementing very difficult qualifying criteria, go for alternative lenders like Australian Lending Centre. The company implements fast approval process because it often handles second mortgage applications and there are no errors and delays involved because the staffs are skilled and experienced in this type of loan. The fees are affordable and manageable as well.

After that, use the proceeds of your second mortgage top pay for your urgent needs. That means you need to learn to prioritise your needs-and spend only on those that would improve your financial situation. For example, if you still have a car which is up and running and you have a huge debt to pay, perhaps it would be wiser to pay off those debts before you buy your dream car.

Thoughts for Consideration on an affordable second mortgage

It is not easy to bring yourself to do all those things mentioned above. Almost everyone knows how difficult it is to get an affordable second mortgage especially if you have a poor credit rating. On top of it all, you may have developed financial habits that diminish your income and your financial strength. But, over time, with practice, you can break habits that you may have been practising for many years.

The pull to take advantage of a second mortgage that offers ‘high equity’ at the expense of high interest may lurk everywhere you turn. There are many loan sharks offering ‘quick approval’ second mortgage online. The ads may show people enjoying a dream vacation, staying in a lavish home or probably spending for a grand wedding despite their bad credit. But the truth is that, when you have a bad credit—you should be careful with whatever money that comes your way.

Remember that getting into debt is a financial decision with a huge emotional impact. There could be many personal and emotional hurdles that can get in the way of making the best financial decision. That’s why it is important to educate yourself about mortgages and how you can use them wisely to avoid self-blame and guilt when things don’t go as planned.

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News Financial Planning Personal Loans

Private Lenders: An Alternative Source of Financing

Whenever Aussies need a loan to finance a new car or house they go to the bank. Still, they seem to forget that there are also alternative sources of financing in the form of private lending. But what are private lenders and why should someone consider these alternative sources of financing when there are plenty of banks?

Sometimes, traditional banks don’t always approve your loan application due to many different reasons, so people have to look for alternative sources. With a private lender, maybe you will finally get that new car you have always wanted.

What Are Private Lenders?

They can be either an organisation or a private individual. Unlike traditional funding sources, like banks, private lenders don’t have traditional qualifying systems, meaning that getting access to a loan is much easier.

However, because of its “different” nature of funding, lenders come with higher risks for both the borrower and the lender.

What Are the Benefits?

To begin with, private lenders can easily approve your request for a loan. In other words, if you have bad credit or are self-employed or cannot provide proof of your income, a private lender may be more accessible when it comes to requirements. So, no matter your income and your credit score, a private lender will get you the loan you need.

Another reason for applying for private funding is due to the straightforward process they have. Unlike traditional lenders, the private ones will accept your request very fast. Not only that, but your loan could be available right after your application is approved. This can bring a lot of advantages if you are on a tight schedule.

drawbacks

Drawbacks of Using Private Lenders

It almost sounds too good to be true, but private lenders do come with a set of drawbacks that can make them inaccessible to some Aussies.

The first thing to know is that their rates are typically higher than those of traditional lenders. This is how they compensate for the increased risk and they will have high interest rates for those with bad credit.

Some lenders may feature high fees, from the start until the finish of the loan term. In any case, be sure that you know what you are paying for.

Another drawback is that some loans are offered for shorter terms in comparison to what traditional lenders offer. This happens especially when it comes to mortgages. When conventional mortgages have a twenty-five to thirty year terms, private lenders offer smaller mortgages that just fill the gap until securing more traditional finance.

The private mortgages can also be used to cover needs like the construction of a house. They can also cover for the period between purchasing a house and selling one. The term on these mortgages is one or two years, which means that you will have to move fast to pay the loan back.

Another thing you should know about private lenders and their services is that some of them do not offer the same features as traditional lenders do. In other words, some loans may lack features such as redraw facilities or offset accounts. So, if you were hoping for these types of features, you might have a problem.

How Can Private Lenders Help Me?

Private lenders can offer you a lot of options when it comes to loans. Here are a couple of them:

  • Caveat loans are fast-settling loans secured against a property. These loans are short, last sixty to ninety days and settle very quickly.
  • Bad credit loans are the ones you need if you have a low credit score. Be careful though; these loans come with high interest rates, so use the money wisely and make sure you pay back the loan fast.
  • Bridging loans can be offered by private lenders and can be used by the customer to build or purchase a new home before the sale of their old home. These loans have a term of twelve months, and they are paid back when the old property is sold, making them quite useful in the long run.
  • Second mortgages are also offered by private lenders. These loans are available for those who already have a mortgage on a property who are in need of extra funds for multiple reasons. Depending on the lender and the loan terms, these loans could have high interest rates and extra fees. With all these factors in mind, any client should think twice before applying for this kind of service. So be very careful if you do.

Conclusion

Private lenders are here to stay, whether you like it or not. They have a lot of advantages in comparison to traditional lending systems, but they also have some drawbacks. At Australian Lending Centre, we offer second mortgages at competitive rates and flexible repayment terms that can be catered to your specific needs. Contact us today for a free assessment via our enquiry form now!

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Bad Credit Loans Refinance and Refinancing

Is Bad Credit Refinance Home Loan Right For Me?

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.

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News

What Is A Caveat Loan And Is It Better Than Refinance?

If you have a first mortgage on your house and you obtained a caveat loan, it works as a second security. The caveat would be in your title, and will only be removed when you have fully paid the loan. Simply put, a caveat loan is like a second mortgage, except for the short term, where the loan is secured against a house or any real estate property owned by the borrower. But…is a caveat loan better than refinance?

Caveat loan is usually approved within 24 hours. No valuation is necessary and you can get it regardless of bad credit history. The interest is already prepaid. But, it is not applicable to all borrowers because of the quick settlement feature, which often ranges from 3 to 6 months.

How can I repay a caveat loan?

You can repay it through refinance, sale or any other exit strategy that the caveat lender approves of.

The lenders have their own criteria in determining how you are going to give them their money back at the end of the loan term. If you are selling your asset within 3 months, the caveat loan will be serviced out by the proceeds of the sale.

Does caveat loan settle quicker than a second mortgage?

It depends on the lending agency. The Australian Lending Centre, for example, has a remarkably speedy settlement process for refinancing that settles much quicker than other lenders. They have refinance specialists that help borrowers choose the best refinancing product to help them, get the money they need in the soonest possible time.

Is caveat loan a practical loan alternative?

If you are sure that the buyer of your house would pay before the term of the loan ends, why not? But, if you don’t have a ready-buyer or you simply rely on refinance as your exit strategy, it may be difficult to count on it because you don’t know exactly when that money is really coming in.

I took a caveat loan and its due in a month. But my loan is not yet discharged and the money I am expecting is not yet in my account. What should I do now?

You can give yourself enough flexibility by applying for refinance or short-term loans to pay off your caveat loan before the term ends.

Australian Lending Centre offers mortgage refinancing products with lower repayments and interest rates that would not only allow you to pay off your caveat loan but your multiple debts as well. Its debt consolidation product rolls over high-interest credit card debts, personal loans and other loans.

Caveat loans often come with high-interest rates. If you want to take care of this type of debt easily you can refinance your existing home loan, consolidate your debts and take advantage of ALC’s low variable rate. You can also switch to fixed-rate or lock-in interest rate if you want.

Caveat loan or refinance?

If you don’t want to face the risk of not being able to repay on time, you can instead access the equity in your home through refinancing.

Contact the Australian lending Centre for more information on caveat loans and refinance.

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Refinance and Refinancing Self Employed

Guide: Refinancing for Self-Employed Aussies

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.

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Refinance and Refinancing

4 Important Considerations Before you Refinance Your Home

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.

Contact us today and we will do our best to help you refinance your home loan.

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Refinance and Refinancing

Refinancing Analysed: Pros and Cons

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.

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Refinance and Refinancing

Why Should You Consider Refinancing Your Home Loan?

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!

Categories
Home Loans

NSW Tops Home Loan Default List

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

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

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

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Refinance and Refinancing

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.

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Refinance and Refinancing

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
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Refinance and Refinancing

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.

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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.

 

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Refinance and Refinancing Home Loans

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.

  1. Your ability to pay. It is important that you have a regular income.
  2. Your credit history.
  3. 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.
  4. 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.

Categories
Debt Management

Credit Card Debts Can Lead to Home Repossession

Home Repossession

A Brisbane couple lost their home valued at $315,000 over a credit card debt of only $8000. They only found out that it went to auction after the home was sold for $20,000 at a bailiff’s auction.

Legal Aid Queensland (LAQ) says it is just one of several cases of debt collection companies moving to sell homes at bailiffs’ auctions to recover credit card debts of any amount.

Since November, LAQ has handled five such cases, negotiating with creditors and stopping the auctions at the last minute in four of them. In one case a debt collection company tried to sell a home over a debt of only $850.

It has been reported that some major banks and multinational lenders are allowing customers to increase their credit card limits by as much as 40%. The Congratulations, You’re Pre-Approved report, commissioned by the Consumer Action Law Centre, said banks and credit card providers were using psychological tactics to trick consumers. The report called for law makers to consider banning, or at least restricting the marketing of unsolicited credit card limit increase offers.

If you receive a letter from your credit card lender offering you an increase on your credit limit, we advise you to think of the repercussions of getting in over your head before accepting. If you are currently struggling with debt there are alternative solutions to having your house repossessed.

We may have a debt consolidation option tailored to your situation. If you have debts of $10,000 or more, don’t wait another minute. Pick up the phone and call us today on 1300 138 188 and receive a free consultation with one of our debt consultants.