Nowadays, banks and nonbank financial institutions have stricter requirements with regards to their Home Deposit Loans. Most of these lenders have reduced the loan to valuation ratio that they are willing to offer to their borrowers.
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Investing in the property market requires you to maximize your budget, especially if you are planning to buy a new home for your family. Joining in the property market would cost you a lot. You will have accountabilities such as legal expenses, deposits, and some other costs adding up.
But, nowadays, anyone can already reach their dream of having their own home in a cost-effective way. To find a home loan that is perfect for your budget and lifestyle, you need the help of a mortgage broker.
Continue readingBorrowers have one important question to themselves regarding their Home Loan and that is either “to fix or not to fix?” It is crucial to think about your decision many times in order for you not to encounter difficulties in the process of settling repayments.
Australian borrowers are mostly attracted to fixed-rate home loan offers because of assurance. A fixed-rate home loan is the advisable home rate loan for first-home buyers as they are the ones who are tight on their budget. In doing so, they can carefully plan for their budget and stay on top of their repayments.
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There are 6 lenders with variable Home Loan Rates with a 2 at the beginning, according to a report from RateCity.
They are expecting 6 to climb to 20 at the next RBA (Reserve Bank of Australia) cut if banks pass on at least 0.20 % to borrowers.
Sally Tindall, the RateCity research director have stated that the owner-occupier rates beginning with a ‘2’ could become the new norm if the central bank made 2 more cuts to the cash rate.
“With 2 more rate cuts on the cards, we could see the lowest variable rate drop below 2.60, maybe even below 2.50%.”
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Home Construction Loans allows a new home to be built through the term of construction. It is based on the time needed to build a home, and it usually ranges from 6 months to a year. Once your construction loan is approved, your lender will pay your builder every period, after work is completed. As soon as the home construction ends, your loan repayment begins.
Most first home buyers prefer having their home construction loan be combined with their standard mortgage plan, into something termed as a construction-to-permanent loan. This avoids the need to refinance after construction and go through 2 different closings.
Continue readingThis move from the major bank (Westpac) is to allow owner-occupied loans to be secured against an investment property. It is for the situations that may happen wherein the loan is to be secured by a non-owner-occupied residential property. Westpac has already informed their brokers about it and this update will be effective on Tuesday, November 19, 2019.
The Revised Owner-Occupied Lending Policy will be implemented in the following instances wherein; this update does not intend to generate income as well as not a tax deduction for investment.
It was also noted on the revised policy that the use of non-owner occupied residential property as a security in purchasing an owner-occupied home is acceptable. It is not only limited to the former but also on the use of the equity in non-owner occupied residential property to fund owner-occupier purposes such as the renovation of an owner-occupied property. The exception of this policy is on non-owner occupied residential property to be used as security for bridging loans, as the bank will now allow it.
The announcement for this revision came after less than a month when Westpac has announced that it would be increasing the maximum LVR (Loan-To-Value Ratio) for investor loans with an interest-only term rates at 80% – 90% which also includes any capitalized mortgaged insurance premium this follows the decision from the Reserve Bank of Australia to reduce the official cash rate.
Westpac general manager for homeownership Will Ranken stated that “Providing the support and finance to help buyers purchase their next investment property is a key focus of our lending strategy. “ He then concluded, “We believe this change will provide a competitive proposition for investors looking to purchase their next property.”
The effect of lower mortgage rates will fail to stimulate lending within Australia unless banks will ease their credit policies, which were tightened in the midst of investigation from the banking royal commission.
Managing director of the Finance Brokers Association of Australia (FBAA) Peter White, has said Reserve Bank of Australia’s rate cuts isn’t enough to stimulate the housing market on their own, especially as banks use unrealistic credit criteria to push legitimate buyers out of the market and disadvantage borrowers.
During the FBAA’s annual conference, White said, “We need a more considered approach to credit policy because right now there are borrowers with the capability to pay a mortgage that is being rejected for a variety of reasons.”
White stated that banks are beginning to take action as they continue to lose business, citing Commonwealth Bank’s recent decision to lower its floor rate the second time in four months as an example.
“Banks are being forced to act because the market is flat, and we will no doubt see that other banks will follow,” he added.
“The FBAA has said before that the buffer used by banks is ridiculously obstructive to borrowers.
“In no way am I suggesting we loosen the credit criteria, but in an economy that needs stimulating, interest rate cuts are only a part of the solution.
He then concluded, “Denying legitimate and credible borrowers a loan due to credit policies that make no sense doesn’t help anyone.”
An increase in income means that people can afford to spend more on housing. Within the time of economic growth, demand for houses are expected to increase. Also, the demand for housing tends to be a luxury good. Thus, an increase in income causes a bigger percentage of growth in demand.
Continue readingHousing in Australia is crucial to the economy’s growth and the welfare of the people. Australia is always a matter of the moment relating to the Property Market.
The housing finance industry had influence significantly the global market in the past decades. It is because of the increase in demand for housing and homeownership. However, in recent years, Australia has experienced a sudden decrease in demand in the property market.
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It can really be overwhelming for anyone who plans to buy a property, most especially if it is your first time. It is crucial to know all the available loan options before deciding to make a purchase.
As the years go by, the demand for home loans is continuously increasing. So nowadays, there are different types of home loans that are being offered by banks and lenders. These home loans can cater to many people, however, it is required to thoroughly understand the loan options available in accordance with your needs.
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