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With over 25 years experience in Banking and Finance, I am ideally qualified to assist you with your current and future finance needs. Working in both the Banking and Mutual industries I have been able to assist clients from all backgrounds with their financial requirements in particular with the purchase and sale of residential proprieties. Loan types I specialise in: • Home loans • Investment loans • Business loans • Car loans • Commercal loans • Construction loans • Self Managed Superannuation Funds With over 30 lenders at my disposal, offering all forms of personal, business and commercial finance I am confident I will be able to meet your financial lending requirements and objectives. Mortgage Broker - Albion Park, Shellharbour & Wollongong The opinions expressed on thispage represent my own and not those of Loan Market.
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Taking the plunge as a First Home Buyer.... Looking to buy your first home? Congratulations! There’s is a lot to take in when you start out, so here is an overview of some key things to consider when you’re buying property. Contact me to get more information and find out how I can help you get into your new home. Your deposit. Have you got enough? Now’s the time to think about how much you want to spend and start a savings plan to reach the deposit you need. The ultimate goal is to save 20% of the property value. It’s ok to feel like that’s out of reach, it’s a daunting figure. But don’t be put off, some banks will lend up to 95% of the property value, meaning you might only need to save 5% for the deposit. Your borrowing capacity. How much can you borrow? The maximum amount you can borrow is called your borrowing capacity. Borrowing calculators will give you an idea of what you can borrow, but I can work out your actual borrowing capacity based on your income and debt. You can maximise the amount you borrow by paying off debt, reducing your expenditure and staying on top of your finances. Am I eligible for the First Home Owners Grant (FHOG)? The FHOG is a state government initiative helping you financially into your first home. The grant and stamp duty concessions differ from state to state, so give me a call and we can chat about what is available to you. You have to meet certain eligibility requirements so it’s important to get the right advice. Don’t forget you might need Lenders Mortgage Insurance (LMI) Loans over 80% of the property value attract a one-off fee called LMI, which insures the bank against a default on your loan repayments. The fee depends on the percentage of your deposit - so the more you can save, the less you will pay in LMI. Finding the right loan for you Some banks offer loans especially for first home buyers, with ‘honeymoon’ interest rates and options for your family to help you too. I have access to more than 1,000 loans from over 30 lenders and can help you compare what’s on offer. Don’t go it alone. If Mum, Dad or your siblings own property, they might be able to help you secure your dream home. Some banks offer a family pledge where an immediate family member can pledge equity from their own property towards your deposit. Another option is asking a family member act as guarantor on the loan - they offer their property as security for part of the home loan (usually around 20%). You can buy your home sooner, and avoid paying LMI. Get pre-approved and get shopping Ready to start house hunting? A formal pre-approval from me takes into account your income, debts and credit history as well as any mortgage insurance you’ll need to pay if you’re borrowing more than 80% of the value of the property. Your pre-approval generally lasts three to six months, assuming your financials stay the same. You can shop confidently knowing your limit and having a green light when you find the one. You’ve made an offer. What next? Once you’ve found the right home, I’ll get formal approval for the sale from the lender. The lender will value the property, process your application and make a final credit assessment. This is when your deposit will be due. Once your approval is confirmed, you’ll receive the final documents for you (and your legal adviser) to review and sign. Settle in Settlement is the formal exchange of money and titles. On your settlement date you’ll be able to collect the keys and start the big move.
The loan process explained As a mortgage broker it’s my job to make the loan process as smooth as possible for clients. While they usually don’t want to know what happens in the background, my business partners often ask “How does it all work?” So, here is the home loan process explained from a mortgage broker’s perspective. Step 1: Understanding the client’s needs I always spend some time in our first meeting to better understand the client’s current financial situation, what they would like to achieve from their next purchase and their longer term goals. Step 2: Determine borrowing capacity Usually clients have an idea of how much they want to spend before they see me. Often they’ve used an online calculator to get an estimate of how much they can borrow but they’re surprised with the different amounts and options we can offer. My software enables me to assess a client’s borrowing capacity from over 1,000 products and more than 30 lenders. By inputting a variety of information I can sift through the offers available. Generally, the factors that determine a client’s borrowing capacity: • Credit card limits • Income and type of income (whether they’re casual, contract or full-time employees) • The size of the loan compared to the property value • Number of dependents and their situation • Type of loan required • Living expenses • Their deposit and/or existing assets. I take the client through how a loan amount will translate into ongoing repayments. Once we decide on a comfortable loan amount they’ll have an accurate figure to narrow their property search. Step 3: Calculate the required deposit, loan and purchase costs If they don’t have the ideal 20% deposit, which is common, I take them through the other options available to them. Accessing equity in other assets, guarantor options, mortgage insurance and grant eligibility are covered. In addition to the deposit, I discuss other purchasing costs to help with budgeting and managing expectations, including: • Loan application fees • Valuation fees • Stamp duty and other statutory government charges • Conveyancing and legal fees • Lenders Mortgage Insurance (LMI) if they’re borrowing more than 80% of the property value. Step 4: Review suitable loan options Once I understand the client’s needs, financial situation and goals I can take them through the most suitable loan products and we’ll compare their options. I’ll compare rates, features, fees and charges, and discuss the impacts of each with the client so we can determine what’s important to them. Step 5: Apply for pre-approval Once the right loan has been determined I’ll produce the paperwork for pre-approval. A formal pre-approval works the same way as a formal loan application, except without the security details. The lender assesses income, expenditure, assets and liabilities to confirm how much you can borrow. As soon as the pre-approval is confirmed I advise the client so they can begin property hunting seriously and with confidence. Step 6: Advice before making an offer When a client finds a property they like I organise a valuation. If the property is to be auctioned, they’ll also need to arrange building and pest inspections at this stage. An auction will also require a deposit if their offer or bid is accepted so I advise clients to go prepared to cover at least 5-10% of the purchase price. Before an offer is made I suggest they have their solicitor check the contract of sale for conditions and inclusions. Step 7: Finalising the loan When an offer is accepted I begin finalising the loan by packaging the application with supporting evidence and lodging it (usually online) with the chosen lender. The lender will assess the application and let me know if they need any additional information. I advise the client as soon as the application is unconditionally approved and arrange to meet or send a formal Letter of Offer for the client to sign. Settlement is underway with the receipt of loan documents. I liaise with the client’s solicitor and lender who schedule the settlement date. The first loan repayment will usually be due one month after settlement. During the settlement process I keep the client informed of progress. I also raise the matter of insurance, such as building and landlord protection, and if I’m working with an investor, suggest considering a property management service. When the property has settled and is transferred into the client’s name I call to congratulate them and remind them of the date of their first loan repayment. It’s a great feeling every time I make that call.
RBA holds rates for longest time in 10 years... At its October meeting the Reserve Bank of Australia (RBA) announced it will keep interest rates at 2.50%, extending its long period of rate stability to 14 months of no change. Loan Market Chairman, Sam White, says the consistency of the official cash rate (OCR) is great for first time buyers and homeowners alike, as the property market continues to remain strong. “Spring is traditionally a time for people to be on the move and the fierce competition among lenders, offering extremely low fixed rate products and even cash incentives, means consumers now have more options than ever to secure the best deal.” However, with recent findings showing over one in three home loans being financed as interest-only, Mr White warns of the dangers of getting in over your head. “With such low rates on offer it’s tempting to borrow big and let the banks dictate your debt level. The best way to avoid this is to use the services of a mortgage broker who will work with you to understand your objectives and explain both your options and your obligations.” “An even better strategy is to take advantage of this steady period to pay down as much debt as possible. Fix your rate lower for the short to medium term and own your home sooner,” Mr White says. In recent weeks there has been talk of the RBA introducing macro prudential measures, whereby restrictions are put in place on high risk lending rather than raising rates, as a way to slow down the strong real estate market. “Broadly we support this way forward. However, we’d urge the RBA not to penalise first home buyers from entering the market, as has happened recently in New Zealand,” Mr White concludes. Continuing to combat the effects of a high Australian dollar, a booming housing market and a decline in non-resource sectors, the 14 month rate hold is the longest in over 10 years. The RBA meets again on 4th November.
Interest-only loans explained.... Popularity for interest-only home loans appears to be increasing among both investors and owner occupiers. Structured much like any other mortgage, the main difference with interest-only loans is that borrowers repay only the interest instead of paying back both the interest and principal loan amount. This interest-only repayment pattern is normally for a set period of time, usually five or 10 years. Typically, interest-only loans are a strategy used by investors to help them juggle their property portfolio, however many borrowers are now using this type of loan for their own homes. As a Loan Market broker I can work with your clients to determine which type of loan is best suited to their needs and guide them every step of the way. Below are the ins and outs of interest-only loans, for both investors and owner occupiers. And if you have any further questions, please get in touch. Investors You can increase and manage your cash flow more effectively by minimising monthly mortgage repayments. You can also claim tax deductions on repayments each month. BEST for quickly building wealth through property and keeping expenses down while managing your portfolio. BEWARE of relying too much on the value of your property increasing, whilst only paying back just interest. Without a capital gain at the time you decide to sell, you may find it hard to meet your obligations on the full principal loan amount. Owner occupiers By increasing the flexibility of your monthly repayments you can ease the strain on your finances, particularly if you know you have some heavy expenses. BEST used as a short term solution to meet your immediate commitments or at a time when you need maximum cash flow. BEWARE of your limits. Don’t take on a loan if you have no hope of paying back both principal and interest amounts, especially when interest rates rise or your interest-only term ends. Also be mindful that by not paying back any of the overall mortgage, you aren’t building any equity in your home.
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