![Are you flushing money down the drain by putting off refinancing?]()
20 Apr 2018 | Home Loans, Refinancing
Every year thousands of Aussie families flush their hard earned dollars down the gurgler because they put off the simple act of refinancing their mortgage. If you’re overdue, rest assured that it’s much easier than you may think!
While there are no hard rules about refinancing, it makes financial sense to review the loan when your individual circumstances change.
For example, you may be growing your family, moving to a new location, or getting married.
There are also plenty of reasons that exist outside personal circumstances, including the major financial benefits it can offer, and we’ll run through some of these below.
Refinance to get a better rate
Refinancing does not always have to mean changing banks.
There are hundreds of circumstances in which borrowers refinance their loans to get a better rate from their bank.
The mortgage market is very competitive, and a deal signed two years ago may not be in your best interest today.
However, if your bank is not in a position to offer you a better rate, there are many lenders in the market who can get you a better deal.
Lock in a great rate
You may have seen the news recently that the RBA kept the official cash rate on hold at 1.5%, but for how long.
However it won’t stay that low forever!
In fact, half of Australia’s leading economists in Australia’s longest running survey – the BusinessDay Scope economic panel – believe the RBA will lift its cash rate by the end of the financial year.
With so many experts predicting interest rates to rise in the next 12 months, and some banks already increasing their interest rates, now could be a good time to lock in an interest rate on your home loan.
Consolidate debt
Refinancing helps to reduce the interest payable on the different loans you have, which can include credit card, car loans or personal loans.
It basically involves combining all the loans into a new mortgage, giving you one simple repayment to make each month instead of a bunch of them – which can lead to late fees if you forget one.
The best news? All your debts are charged at the home loan interest rate – which is usually much lower than a credit card rate!
Increase your investment
If you are looking at your investment options but are financially constrained, it’s time to consider refinancing your mortgage.
One reason to do so is to buy another property.
Refinancing in this circumstance makes a lot of sense because you could have enough equity in your property, which may enable you to make another house purchase.
Get in touch
If you’re feeling like it’s probably time you should refinance your home loan, but are simply too busy to do so, then we’ve got great news for you: our job is to make it super quick and easy!
In fact, we can help make the whole process so stress free you’ll be kicking yourself for not doing it earlier.
So if you can identify with any of the above reasons to refinance you home loan, feel free to get in touch with us today!
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6 Apr 2018 | Personal Finance
Significant changes have been made to Australia’s credit reporting rules after a new Comprehensive Credit Reporting regime (CCR) came into effect in the new financial year. This means now is as good a time as ever to perform a credit check.
The new legislation forces full compliance from Australia’s Big 4 banks, who have previously refused to take part.
In years gone by most lenders have only shared negative information. However, the new laws require that positive information such as a history of regular, on-time payments and the early repayment of loans is also included.
It is expected that this will result in increased scores for many borrowers.
Why should you do your own credit check?
Lenders will have access to your credit score, and you should too.
You don’t want to have a loan application declined because of inaccuracies, errors, or identity theft – all of which can find their way onto your report.
It’s therefore prudent to review your credit score once a year to make sure there are no surprises.
How can you conduct a credit check in Australia?
You can get a free credit report once a year from one of three national credit reporting bodies (CRB’s) which are listed on this government website.
You can also get a free report if you have had a loan application refused within the past 90 days, or if the request relates to a correction request.
If not, there are a number of fee-for-service options, depending on where you live.
Tasmanians are advised to check with the Tasmanian Collection Service and Equifax, and those living in other states, to check with Equifax, Dun & Bradstreet and Experian.
Keep in mind that it’s possible you could have a credit report with more than one agency.
Next steps
If you find errors in your report, you can get them corrected before they can adversely affect your credit score.
For those who find they have a ‘poor’ credit rating, you can take steps to improve it by clocking up a period of future consistency and reliability.
For those with a good credit rating, you will be better positioned to demonstrate your credit worthiness and seek more competitive interest rates.
If you’d like any help conducting a credit check or addressing what you find out, please don’t hesitate to sing out.
We can walk you through the process to help you secure the credit you need to purchase your next property.
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23 Mar 2018 | First Home Buyers
Saving a home loan deposit can be challenging enough. Then, lenders often will put another hurdle in your way by asking for proof of ‘genuine savings’. Here’s all you need to know about clearing that obstacle.
Lenders use the term ‘genuine savings’ to describe any funds you’ve saved over a period of time.
Basically, it’s their way of confirming that you’re in this for the long haul – that you’re committed to being financially responsible with your money.
For example, if you’ve received a gift from your parents to help cover the cost of your home deposit, some lenders may still want you to verify that you’re putting an allocated amount of money aside in a savings account on a regular basis.
What many home buyers don’t realise though is that there are several different ways you can verify that your savings are genuine.
Here are some types of savings lenders may consider genuine savings
– Regular deposits into a savings account over 6 months
– Term deposit savings accounts held for at least 3 months
– Shares or managed funds held for at least 3 months
– Rental history for the past 6 months
– Salary sacrificing through the First Home Super Saver scheme
– Additional repayments into a car loan or personal loan
– Deposit paid to a real estate agent, builder or developer that was originally in your savings account prior to being paid (i.e. not borrowed from somewhere else)
Keep in mind that different lenders will have different policies around what they will and won’t accept as genuine savings.
As an example, showing some banks your rental payment history may not be enough without also showing them savings account bank statements that prove you’re depositing money regularly.
What doesn’t count as genuine savings?
Having plenty of cash sitting in your savings account often isn’t enough for some lenders. They may still want to see you’re able to save money over a period of time as well.
Here are some examples of funds that won’t count as genuine savings with the banks:
– Gift from parents or family
– First Home Owner’s Grant (FHOG)
– Borrowed funds (for example money taken from a personal loan)
– Selling assets (for example selling a car or furniture to raise cash)
– Tax refund
– Inheritance
A few final pointers
Keep in mind that some banks may consider using the FHOG towards your overall deposit amount in some circumstances.
Likewise, there are situations where a gift from a family member could be large enough to avoid the need to prove genuine savings at all.
The key to improving your chances of getting your home loan approved is to structure your genuine savings history so that it appeals to the right lender.
If you’d like help setting this up, speak to us to today about the best ways to verify your savings. That way you’ll have a much better chance of getting your mortgage application approved.
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9 Mar 2018 | Home Loans, News
So you’ve found the ideal property and it’s time to source finance? Here’s how to play your cards right and get a great home loan deal sorted before the settlement date.
Educating the kids, wedding planning, plumbing – there are some things in life that are better outsourced to professionals.
Similarly, when you’ve finally found the home of your dreams, and you need to keep ahead of the avalanche of tasks that follow, using the services of a mortgage broker can make the process a lot less overwhelming.
Your three choices
Basically, there are three ways you can go about getting your loan. You can go straight to your bank, you can look for the best deal yourself, or you can seek the help of a mortgage broker.
However, as buying a home is quite likely the biggest single financial transaction that you’ll ever make in your life, it’s important to make the right choice.
1. Going to your bank
For some people, it’s natural to go straight to the bank because that’s what you know and trust and it’s probably what your parents did.
But this can be a mistake. There are dozens of lenders out there who may be offering better deals, and your bank may take advantage of you not shopping around due to your misplaced loyalty to them.
If you have established a good credit history and a steady income, chances are that you’ll still be able to get a good interest rate through a bank. What they can’t and won’t do though is tell you if there is a better deal available elsewhere.
2. Going it alone
You can jump online and start doing loan comparisons yourself. Be aware though, that there are differences in criteria, so it’s not altogether straightforward and online calculators will have built-in assumptions.
You will need to have a good understanding of the industry and a good grip on the terminology.
You’ll also need to understand the implications of loan terms, fixed interest and variable interest options, interest only vs principal and interest, mortgage protection insurance, credit history, and employee vs self-employed status.
Finally, you’ll need to consider redraw options and offset accounts. That’s a lot to weigh up in a short amount of time – especially if you need to source finance quickly.
3. Using a broker
Having a broker is like having a personal shopper who will research and compare hundreds of available market options in search of the best deal for you. We’re also required to hold or operate under an Australian Credit Licence.
A broker will have access to multiple lenders and multiple products, will be able to compare and recommend suitable loan options, negotiate the loan on your behalf, and guide you through from application to settlement.
We also don’t cost any extra. That’s because we’re paid a commission by the lender. Rest assured though, that we’re driven to secure the best possible home loan deal for you.
After all, having you tell family and friends at your house warming party about how we secured you a great home loan is much more valuable to us than slight variations in commissions.
The choice is yours
Any of these three options will get you there, but choosing a mortgage broker like us is likely the best way to be fully informed before you commit to a loan.
We’re happy to answer any questions you have, any time, meaning you don’t have to trawl through pages upon pages of Google to find the correct answer.
It’s also the most stress free way of getting your finance lined up in time, so that the home of your dreams doesn’t get snatched up by someone else!
If you’d like to know more about how we can secure a great home loan for you, get in touch today.
2 Feb 2018 | First Home Buyers
Are you looking to purchase your first home? Or do you know someone who is looking to get into the property market?
Today I discuss 5 questions that First Home Buyers should ask themselves before they commit to purchasing their first home.
If you would prefer to read instead of watching the video, scroll down to see a transcript.
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Transcript
Hello, Brendan from Buyers Choice, your home financing specialist.
Out enjoying this beautiful weather we’re having again in South East Queensland.
Today, I thought I’d take the opportunity to talk to you about five questions that first home buyers should be asking themselves before they take out a home loan.
Question 1
So straight off the cap, number one, is it the right time? We’re always worried about missing out on things.
You see it in the media, they’re talking about housing markets going up, it’s getting more expensive for first home buyers to get in. So the desire is to move now and not to wait too long before buying your first home.
- You need to ask yourself, is now the right time?
- Are you better off waiting another six months, 12 months?
- Is renting a better option for you than going down the path of home ownership?
I know the great Australian dream is to own your own home, but it may not be the best answer for yourself.
Question 2
How much money do I need?
So purchasing a new property, you’ve gotta put down some of your own hard earned dollars, there’s no two ways about it.
- So how much do you need to have saved?
- How much have you got saved?
- Are you going to put down 20% and avoid Lenders Mortgage Insurance?
- Are you gonna go to a lender who will let you borrow the maximum amount and, as a result, charge you Lenders Mortgage Insurance to do it?
Most likely, a higher interest rate as well, but go down a path which will allow you to buy a place with the least amount of money. You need to have the answer to that question before you proceed.
Question 3
You should be asking yourself is, can I afford the repayments?
And it’s not as simple as, I’m earning X amount of dollars, the repayments are Y, yep, I can afford them.
- Is it gonna affect your lifestyle?
- Are you going to have to give up things to be able to afford to move into your new home?
The answer is not yes or no, because you might have to give up things to get in there, but your desire to get into a new property is bigger or more important than what you’ve gotta give up.
You need to understand what the costs are, whether you can afford them, and do you need to make some sacrifices to be able to afford it? And then make an informed decision.
Question 4
You should be asking is there any government grants that I can access?
A lot of the states have a The First Home Owners Grant, need to understand what’s available, what are the conditions?
- Is it only for a construction?
- Can you get it on an existing property?
- What are the catches?
- What does the government need to you to do?
- Do you need to live in the place within 12 months?
- What are the rules around the grant?
You need to look at that, understand it, and it forms part of your decision-making process.
Having asked yourself those first four questions, you understand whether it’s the right time, how much money you need, how much money you can borrow, whether you can afford the repayments, and what support’s out there from the government.
Question 5
The final question, knowing all that, is, are you, yourself, ready?
Do you want to make that commitment?
Because it is a big commitment. It is something that you have to be ready, not just financially, but mentally, to go ahead with. I can remember myself, nigh on 20 years ago, when I bought my first property. I went from having minimal debt one day to owing $300,000 the next.
As a young guy in his late 20s, mid-20s, something in my 20s, that’s for certain, it’s a big commitment. Having that type of debt, can you sleep okay at night, knowing that you owe someone all this money, and it’s going take you the next 30 years, most likely, to pay it off?
That is a decision that only you can make. No one else can make that decision for you.
So work through these five questions.
- Is it the right time?
- How much money do I need?
- Can I afford the repayments?
- Are there any grants available?
- And the big one, am I ready to proceed?
Before you get too far along.
If you like this video and like this type of content I’m putting out, please hit like down below. Leave a comment, tell me whether you agree with this, whether there’s another question you should be asking yourself.
Let me know what you’d love to hear.
Brendan from Buyers Choice, I’m going to continue enjoying this beautiful weather, and talk to you next time.
