Where do you get your information about home loans? From the media? From a friend?
The reality is that most Australians read and listen to advice from the media regarding their mortgage or would prefer to listen to a friend than to a trusted expert. Borrowing for a home is a complex process filled with many possible pitfalls, so it is critical that you seek the right advice from the right source.
Unfortunately your friends & family may not be well informed about finance, or they may give advice that worked well for them however will not work well for you. Mortgage brokers exist because everybody’s needs are different, if there was one best lender for everyone then there would be no need for our help! So in many instances when someone’s friend has recommended the same lender that they used then they are not taking into account the specific needs of that person.
The media on the other hand often gives advice backed up with scant evidence or with comments from an expert in the industry. Newspapers make money from selling advertising, not from giving excellent advice! Their goal is to grab your attention so that you read the article. For this reason articles about interest rates or house prices going up or down are very common. We often see two articles in the same newspaper on the same day, one saying rates are going up, the other suggesting they may go down!
We recommend instead that you only listen to a few select sources when researching your loan. In particular consider the following:
- Independent experts: RP Data & Residex are research / data management companies that work closely with the real estate industry. They are unbiased and are an excellent source of reliable information regarding the future of house prices.
- Industry commentators: Following one expert and their home loan articles is a great way to avoid being confused by conflicting information.
- Specific mortgage advice articles: On our Home Loan Experts website you can find more mortgage articles that will give you the right advice to help you overcome specific problems such as how to value a property or obtain a free copy of your credit file.
- Finance Forums: You can ask questions on our home loan forum or on another industry specific forum such as the Sommersoft or Propertyinvesting forums used by many Australians. A mortgage broker can then reply to your question with specific advice.
Always remember that ultimately there is no substitute to meeting with a finance professional, such as a mortgage broker, in person and completing a full needs analysis. This will get you on the right track to finding the most suitable loan for your situation.
A probationary period is a common part of many people’s employment contracts. It stipulates that your performance within a company will be under review from between three to six months. During this time the employer can decide whether they wish to hire you on a full-time basis, and for you, it’s a good time to see if you fit within the fabric of a company. Whilst probationary periods have many advantages, it could be the one thing that impedes you from getting a home loan.
Lenders and financial institutions see those on probation as a higher risk due to lack of employment stability. They are reluctant to lend to those who are not currently committed to full time work, despite their high salary and professional status.
This is commonly difficult for those who have travelled from overseas and are just entering the workforce, those that have taken maternity and students who are just starting a new job after graduating. Banks often prefer those returning to the same line of work or entering into the field that they have studied in. They may also require evidence of study and birth certificates from mothers who have taken maternity leave.
Further, changing careers, jobs and being head hunted to a new department can also mean that you are subject to a probationary period. Lenders are more inclined to approve loans for those whose new job is in the same industry. Often you will be able to borrow up to 90% of the purchase price.
However, it is important that you speak to the right broker. They can assist you in formulating your application so there is a higher chance of being approved the first time round! Don’t let a probationary period stop you from getting that home loan. Talk to an expert today.
For one who has procured a low doc loan, you must have made a loan either because there was no other option for you, or because of the convenience that a low doc loan provides. A self-employed individual will have a hard time providing the paperwork necessary in order for the regular types of loans to be approved, so often they have to rely on either a low doc loan or a no doc loan.
On the other hand, some other people value their privacy, or just do not want to go through the hassles of preparing voluminous documents. In this case they get a low doc or no doc loan for their own convenience and privacy.
Whatever your reasons for getting this type of loan, the interest rates are usually higher than the regular loans often offered to PAYG income earners. This is because of the higher risks involved where there is little or even no documentation provided. Due to the fact of higher interest rates, these rates often fluctuate and there are times when it would be good to actually refinance as you could save a lot on interest rates.
Fortunately these types of loans often have a refinance option available, hence if you see an opportunity to refinance your loan then it would be ideal to do it, especially if the refinancing will be beneficial to you financially.
Please note that your refinancing may again be a low doc loan, just with better terms and conditions. This means that for those who want to preserve their privacy, they can still refinance and use the low doc option. For those who are willing to submit more documents to the banks then they could possibly get the lower interest rates that come with disclosing more through numerous documents.
The home loan experts have several options available to those who would like to refinance low doc loans. For those who feel they got the short end of the stick, or just got a loan at a bad time, give refinancing some thought as it could be a wise decision especially where interest rates are low.
Everyone needs insurance, as everyone needs to be protected from risk. After the sub prime mortgage crisis hit the United States, it became even more apparent that even the giant companies can succumb to financial problems from poor decision making.
Due to these facts, it is understandable that banks and lenders likewise want to be protected from possible financial miscalculations. Hence, the presence of LMI or Lenders Mortgage Insurance. LMI was created for these banks and lenders. With LMI they are protected from too much risk, especially for loans with 80% LVR or more. When loans are more than 80% then LMI becomes mandatory. What LMI does is when the borrower is unable to make the repayments, and defaults until the onset of foreclosure of mortgage. If after the foreclosure, the amount cannot cover the entire amount of the loan, then the insurance companies come in to cover the losses. Hence, the banks end up with zero loss.
Although the scenario may seem to benefit only the lender bank, it can also benefit possible borrowers in a positive way. It helps by allowing the borrower to get into the real estate market much earlier. This is done by not needing to provide the usual deposit of 20% before their loan can be granted. It is no joke saving 20% for a deposit, and it can literally take forever to do. Without LMI no deposit home loans would not be possible, as you would always be required to post a deposit. Those who do not know how to save will never be able to get a loan if the setup was like this.
LMI is a complicated topic and guidance should be taken from the home loan experts. With the help of the experts, they can assist you in deciding whether it would be practical to get LMI, or to just save up for a deposit. There are endless possibilities in home loans, and with the aid of the home loan experts. These possibilities can be shown to you in full detail so you should be comfortable with the fact that you left no stone unturned.
Credit cards are constantly being used to purchase things we need instantly. Even though we do not have the available cash, a credit card can be a tool to buy us more time to purchase something that we need now.
There is a similar product when it comes to home loans, and this is called Lenders Mortgage Insurance or LMI. A home is a necessity, and nearly everyone would like to own their own home, and would like to avoid renting a place if possible. However, this is often made difficult by the requirements of deposits before loans can be granted. A 20% is standard, and 20% is no paltry sum.
However, with the use of LMI, those who would like to be home owners earlier can now have an option to use LMI instead of saving for a deposit. The concept is very similar to a credit card, where you need not save for the item since you can use your credit instead. Like a credit card however, LMI can result in higher interests and overall higher costs, especially with loan to value ratios of more than 80%. This is because for loans of more than 80% the premiums spike in prices, so it would be ideal to keep the LVR at a maximum of 80% or less.
Would you like to save for the deposit or would you like to purchase your home now? The experts on home loans can help you decide which would be more practical for your particular need and specific circumstance. With their help the topic of LMI would not seem that complicated, and deciding on what to do should be much easier. Enquire online now about LMI, and whether it would be advisable to get it for your loan.
Being an owner builder in Australia is a truly challenging proposition. You are faced with the challenge of overseeing and building your own home. For those who would really like a true challenge, they would handle everything themselves, and handle each miniscule detail from the ground up.
However, there are a lot of problems faced by these first time owner builders. This is especially true if they have no construction experience in the first place. This means that work can be slow, mistakes can be made, materials may be overpriced because of lack of exposure. Due to these risks it may be difficult for an owner builder to get home loan approval. This is because of the fact that banks will refuse to take the risk if they think that it may jeopardise their financial situation and the loan may not be repaid. Where an owner builder however, is a contractor who is accredited by the lender or bank, they have a much easier time.
One must understand before applying for an owner builder home loan it requires commitment to be able to go all the way, as there is a tendency to leave the project have finished because of the difficulties of building it on your own. Tempers may flare, and costs may not be what they expected, and these are conflicts that can hamper the building of your own home.
The home loan experts would like to offer their services in order for you to be able to build your own home. Keep in mind that it is very difficult to find a bank actually willing to let you do your thing, and that means choices are few and far in between. To hasten your search the expert can provide you with a plethora of knowledge and options that one can do to ensure that the owner builder house is finally completed.
Real estate business is a risky business, and when one is not careful enough, disaster can happen. That is exactly what happened in the United States and the sub prime crisis that they experienced. 
When the real estate bubble burst, it sent shockwaves throughout the world and toppled a lot of hopes and dreams.
Fortunately, in Australia there is such a thing LMI or lenders mortgage insurance as protection from taking too much risk. Risks are possible of being taken, as long as there is enough security for it. That is exactly what LMI provides, protection from too much risk and exposure. LMI is also a good way to be able to get a 100% home loan. Usually the regular amount of loans can extend only to about 80%. However with LMI, it is easily possible to get a loan of up to 100%.
In addition to LMI there are also other methods of getting a loan of up to 100%. This can be done through the use of another property as additional mortgage. With the addition of property, banks and lenders can rest easy in the fact that, if the loan is not paid, they have access to at least two properties to recoup their losses.
With these factors considered and put into place, there are a lot more safeguards when it comes to purchase of Australian real estate. This ensures that the banking system is protected, and at the same time, borrowers still have access to 100% loans.
The home loan experts can guide you through the process of getting a 100% loan. Whether it be through LMI or through the use of another property as security, the 100% loan can be easily made. Enquire online about the 100% loan now.
There are several reasons why one would get a low doc loan. Often, the primary reason is that there is a lack of documentation that the borrower is able to provide the bank, which results in having no other choice but to get a low doc loan. However, the common
problem with low doc loans is that because the banks and lenders do not have any solid basis to grant a loan, interest rates of these loans are set fairly high. This means that if one is given a chance to save on interest, then low doc loans are not the way to go.
For others, they may be in bad credit, and there is no other loan available to them but these types of loans. What most people forget is that it is still very possible to refinance a low doc loan. The basic first step that is usually taken is to check the existing interest rates for low doc loans. If they are lower than the rates given to you previously then it means that refinancing is a good option. This is easier said than done because one has to go through a lot of banks and lenders first to find the best interest rates.
An easier method would be to ask help from home loan experts. They have access to a lot of lenders and they can set up a new low doc loan package for you that will save you a lot of money and interest expenses.
You may not realise it, but now should be the best time to refinance a low doc loan. This is because a handful of banks and lenders have slashed interest rates, thus making refinancing your loans a truly attractive option. There are numerous ways to save, and having a chance to refinance loans is one of these interest saving devices.
