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Homeowners impacted by COVID-19 encouraged to contact lender

Homeowners impacted by COVID-19 encouraged to contact lender

18 Mar 2020 | Home Loans

Homeowners who have had their income impacted by the coronavirus outbreak are being encouraged to seek out hardship options with their lender.

The economic impact of the coronavirus outbreak is evolving daily, if not hourly, across the Australian financial landscape.

Businesses have closed, jobs have been lost, and casual workers have had their hours slashed from work rosters.

If you’re one of the many Australians who have been affected – or are worried that you soon will be – rest assured that you can talk to your lender about hardship options without it affecting your credit report.

Here’s a statement released by Commonwealth Bank CEO Matt Comyn, for example:

“We encourage our retail customers who may be facing hardship due to impacts of the virus to contact us so that we can provide them with assistance, for example hardship options including deferral of loan repayments.”

What are some other options?

If you don’t believe you need to seek financial hardship, but you’d still like a bit of extra breathing room, it may be worth considering refinancing or renegotiating your home loan.

There have been four rate cuts in the past year – including one last month that reduced the RBA’s official cash rate to a record low of 0.5%.

And here’s the thing: lenders don’t automatically drop your repayments when the interest rate falls.

So if you haven’t asked your lender to reduce your home loan rate over the past year – or even the past month – then you may be able to reduce your monthly repayments by refinancing.

Get in touch

We understand that these are tough and uncertain times, yet rest assured we’re here for you no matter what lies ahead.

If you’d like us to help you explore either your hardship or refinancing options then please get in touch – we’re ready to assist you any way we can.

First home buyer numbers spike to 10 year high

First home buyer numbers spike to 10 year high

13 Mar 2020 | First Home Buyers, News

First home buyers are throwing themselves into the property market in numbers not seen since 2009.

The number of owner-occupier first home buyer loan commitments reached its highest point in ten years in January, with newcomers taking out 9,945 loans (seasonally adjusted), according to ABS data.

That’s a 3.2% rise on the previous month and a 20% increase on January 2019 (7921 loans).

A recent upwards trend in the home loan market was also reported in figures released by The Australian Prudential Regulation Authority (APRA).

The APRA data showed a 12.4% increase in the value of new housing loans settled by authorised deposit-taking institutions (aka lenders) in the December 2019 quarter.

What’s fuelling the spike in first home buyers?

Two things, mainly.

The first is the federal government’s First Home Loan Deposit Scheme.

The scheme, which started on January 1, can allow first home buyers to purchase a property with a deposit of 5% without having to pay Lenders Mortgage Insurance (LMI).

As of late February, it was reported that the majority of the 5,000 places available through 25 non-major lenders for this current financial year were still available to be reserved by potential first home buyers. So if you’d like to find out more get in touch!

The other main contributing factor to the growth spurt in first home buyer numbers is low rates.

Earlier this month the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to a new record low of 0.50%.

This came after three cash rate cuts in 2019, with the latest as recent as October.

And interestingly, RBA Governor Philip Lowe has hinted more rate cuts could be on the way in coming months, saying the RBA will continue to closely assess the implications of the coronavirus

Get in touch

For those thinking of entering the property market for the first time there’s a lot of recent changes to consider – including the record-low RBA cash rate and the federal government’s First Home Loan Deposit Scheme.

So if you’re thinking about purchasing your first home soon, get in touch today, we’d love to help you through the process.

RBA cuts cash rate to record low amid coronavirus concerns

RBA cuts cash rate to record low amid coronavirus concerns

4 Mar 2020 | Interest Rates

The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new record low of 0.50% as the coronavirus outbreak impacts global financial markets.

RBA Governor Philip Lowe said the coronavirus has clouded the near-term outlook for the global economy and global growth in the first half of 2020 will be lower than earlier expected.

“Prior to the outbreak, there were signs that the slowdown in the global economy that started in 2018 was coming to an end,” Governor Lowe said in a statement.

“It is too early to tell how persistent the effects of the coronavirus will be and at what point the global economy will return to an improving path.”

The RBA previously cut the official cash rate to 0.75% in October, which was the third interest rate cut in 2019.

More rate cuts on the way?

Governor Lowe also hinted that more rate cuts could be on the way in coming months, saying the RBA will continue to monitor developments closely and assess the implications of the coronavirus for the economy.

“The Board is prepared to ease monetary policy further to support the Australian economy,” Governor Lowe said.

Prime Minister Scott Morrison earlier in the day said he expected the big banks to “do the right thing” by Australians and pass on any rate cut in full.

“And honestly, I don’t see it any different to what Qantas did when we called out to Qantas and we said, we need your help to get some people out of China,” the Prime Minister said.

Want to know what this rate cut means for your home loan?

With this being the fourth RBA cash rate cut since June 2019, it can get a bit confusing as to just how much of these cuts your lender is passing on to you.

The good news is we’re following the market closely and can tell you which lenders pass this fourth rate cut on to their customers in full, and which lenders don’t.

So if you’d like to find out, then please get in touch – we’d be happy to help break it down for you.

How long does it take to find and secure your dream home?

How long does it take to find and secure your dream home?

28 Feb 2020 | Home Loans

It takes most first home buyers longer than a full working week to house hunt and apply for finance for their ‘dream’ property, according to new research.

The 2020 St George Home Buying Survey found that it takes first-home buyers an average of 44 hours to research properties, hone in on one they like, and begin the home-buying process – including applying for a mortgage.

Why does it take that long?

Eight in ten people surveyed said they found the application process for a home loan time consuming and inconvenient.

What are they finding difficult about it? Well, more than half said they were ‘pained’ by the overall amount of information they need to process.

The other main hurdles facing home buyers included:

– Understanding what was involved (73% of people surveyed)
– Learning about the housing market (71%)
– Working out their financials (64%).

How we can help cut down that time

We go through this on a daily basis so we can help make the process a whole lot less time consuming, confusing and inconvenient for you.

We can help you understand what’s involved and help you work out your financial hurdles.

Don’t forget government assistance

On a related note, it’s worth noting that the federal government’s First Home Loan Deposit Scheme, which started on January 1, still has most of its 5,000 non-major lender scheme places available.

The scheme can allow first home buyers to purchase a property with a deposit of 5% without having to pay Lenders Mortgage Insurance (LMI).

To find out more, get in touch. We’re more than happy to run you through the scheme and how it may help you crack into the property market sooner.

Downsizers tipped to be a ‘powerful force’ in 2020

Downsizers tipped to be a ‘powerful force’ in 2020

21 Feb 2020 | News, Property

Downsizers are tipped to take advantage of ‘the perfect storm’ and get the most out of the property market this year, predicts the national body representing professional buyers’ agents.

With softer lending conditions and strong property prices tipped for 2020, cashed-up downsizers looking to sell the family home and move into apartments or regional areas are in the box seat, says Real Estate Buyers Agents Association (REBAA) president Cate Bakos.

“With the potential for further low interests, softer lending conditions and low stock levels, it could be ‘the perfect storm’ for downsizers this year,” says Ms Bakos.

“The sorts of challenges that most buyers face – including valuations and gaining finance approval – is obviously not a concern for a buyer who is not impacted by a shortfall.”

A ‘formidable force’

Ms Bakos adds that low loan-to-value ratios, or even cash purchases, will eradicate any concerns about valuation dilemmas and make downsizers a formidable opposition at any auction.

“There is no doubt that wealthy older buyers – downsizers, baby boomers, empty nesters, retirees – will be a powerful force in the property market in 2020 and one that won’t be going away soon,” she says.

Downsizing doesn’t necessarily mean smaller

Interested in the idea of downsizing? You’re not alone.

In fact, more than half of Australians over the age of 55 are open to downsizing, according to another recent report by the Australian Housing and Urban Research Institute (AHURI).

According to the report downsizers are mobile, with nearly half moving to new neighbourhoods; the main reasons for downsizing were lifestyle, financial considerations and reduced maintenance.

“While downsizing may include a reduction in dwelling size, to older Australians it points to a housing aspiration where the internal and outdoor spaces are manageable, and represents a financial benefit,” explains lead report author Dr Amity James.

In fact, most downsizers move into a dwelling with three or more bedrooms, the report shows.

“Most downsizers still want space and regard spare bedrooms as necessary in a dwelling,” Dr James adds.

Get in touch

If you’re interested in downsizing to improve your lifestyle and reduce home maintenance then feel free to get in touch.

We’d be more than happy to chat with you about all things finance for that new home you’ve got your eye on.