Interest Rates
Great News…
The Reserve Bank has decided to leave interest rates on hold! At it’s
meeting today, the Board decided to leave the cash rate unchanged at 4.75
per cent.
Economists are divided as to whether rates will go down in the near future
or remain at the current rate, good news is that none at this stage are
anticipating a rise.
Conditions in global financial markets have continued to be very unsettled
with uncertainty increasing about both the prospects for resolution of the
sovereign debt and banking problems in Europe, and the outlook for global
economic growth. While temporary impediments that had contributed to a
slowing in growth in some countries over recent months are lessening, recent
data suggest a continuing period of soft economic conditions in both Europe
and the United States. Moreover, the uncertainty and financial volatility
have reduced confidence, which could result in more cautious behaviour by
firms and households in major countries.
How to effectively manage your Mortgage!
Following are five tips to get you on your way:-
Direct Debit: Make your repayments on time, organise to have your mortgage to be direct debited from your pay.
Never be late: If you cannot make your repayments, organize with your broker to perhaps refinance as an option… much better to extend the life of the loan than to go into default.
Budget: Keep your mortgage the priority even if that means cutting back spending in other places. Make a budget factoring in your mortgage repayments and expenses then keep a diary of your expenditure which will make it easier to stick to your budget.
Pay more than the minimum: Pay your repayments fortnightly which will save on interest charges and when you have extra funds eg. tax refunds, pay them straight of your home loan… it will certainly make a difference in the long term.
Cut Debt: Reduce credit cards and their limits and only use them very seldomly. You will then have more control of your spending which will also make a difference to your mortgage.
Imagine yourself building wealth with property investment
Considering property investment? Come along to a FREE Joyce Property Investment Seminar where you will get the right advice and experience to help you along the way. There is no obligation or sales pitch and you will know more about property investment when you leave than when you came. Bookings are essential so please contact Mark Coonan from LoanEasy on 1300 883 453 or email markc@loaneasy.com.au to discuss your financial situation so as to assess over the phone if you are in a position to look at property investment.
Stay Variable or Fix my Home Loan Rate?
This is the most commonly asked question today regarding home loans… If we look at the average 3 year fixed rate at 6.79% (loans over $250,000 receiving a 20pt discount) and then the current average discounted variable rate at 5.11% for P&I payments for a loan of $250,000, the variable monthly repayment would be $1360 approx. The fixed monthly repayment would be $1630 approx. Therefore, an extra $270 is required.
Often the question then arises if the extra payment is better off used in the principal payment? An option then could be to pay the higher amount (3 year fixed rate payment) and leave the loan on a variable rate. The principal balance should then be reduced and also provide additional funds in redraw. At the end of 3 years with the interest rate rises being chronologically consistent, the variable rate would need to be 8.4% approx (monthly/annual fees have not been included).
7 Things You Need to Know When Purchasing a Home
Stamp Duty: A government cost calculated on purchase price. First home buyers are exempt up to a purchase of $500,000. If building you only pay on the land cost.
Mortgage Insurance: A deposit of 20% or more is required so as not to have to pay Mortgage Insurance to lenders.
Building Insurance: The building, not the land, needs to be insured prior to settlement of the purchase.
Fixed Loan Rate: Penalty fees may be issued if paying loan off in lump sums, making higher repayments or paying off in full before its due date.
Discounted Variable Rate: This rate may only last for a period of one, two or three years and then will revert back the standard variable rate.
Split Loan: Your loan may be part fixed and part variable and some lenders do charge fees for set-up, accounts & discharge on both portions.
Conveyancer/Settlement Agent: A Conveyer organises the legal transfer of property title from the seller to the buyer. A settlement fee will apply as well as other fees including title search.
Grant for First Home Buyers ends 30th September 2009
Only 4 months to go for first home buyers to claim the full grant of $21,000 if signing a contract to a newly built home and $14,000 for an established home.
If the contract is signed after 30th September, but before 31st December a first home buyer will still be eligible to a lower grant of $14,000 for a newly built home and $10,500 for an established home. In 2010 the grant will revert back to $7,000 for a newly built home and established homes.
Call us now on 1300 883 453 or simply get our Free “First Home Buyers” Report to find out more.
The Advantages of Loan Advice
Because of the global credit crisis it is a lot harder for Australians to access finance eventhough there is a lot of lenders and products available to choose from. Lenders policies have changed and some of their products are not available to the purchaser anymore.
Evidence of savings to access finance for Australian purchasers is now a pre-requisite, however the interest rate cuts that we have witnessed recently still make home loans readily available for those homebuyers that have a secure job and a good credit history.
It will be very beneficial to you that you get the right loan advice the first time by talking to a Loan Advisor from Loaneasy to ensure you get a product that suits your individual circumstance.
Mark will cover all aspects of a home loan with you as well as all the additional features so you are fully prepared “For the Great Australian Dream”.
Mortgage brokers work for you: MFAA
Mortgage brokers are there to help you find the most appropriate home loan – you just need to ask the right questions, according to the Mortgage and Finance Association of Australia (MFAA).
“Choosing a home loan can be a daunting task. Mortgage brokers help guide you through the market and find a home loan appropriate to your individual situation. Brokers are there to help demystify the process of selecting a loan,” said Phil Naylor, CEO of the MFAA.
“The first thing you should ask when sitting down with a broker is, ‘are you a member of the MFAA?’ All members of the Association have to abide by a strict accreditation process and Code of Conduct.
“Mortgage brokers can provide you with a lot of information and choice, guide you to avoid pitfalls, saving you time and headache and ultimately, help find the right loan for you,” said Mr Naylor.
The latest MFAA/BankWest Home Finance Index showed that consumers saw clear benefits from using a broker. Respondents listed the main benefits of using a broker:
* They do all the leg work for you (75.1% of respondents)
* They have a wider loan range (72%)
* They are experts in a range of mortgages from numerous lenders (71.1%)
* You can get the right loan for your circumstances (63.7%)
Mr Naylor concluded: “Couple the tips from our consumer education websites, Essentials of Borrowing, with the knowledge and experience of an MFAA broker and you’re set.”
To help consumers better understand all the factors that surround borrowing, the MFAA has set up the Essentials of Borrowing – an educational website that walks people through all they need to know about loans, including some case studies. Visit www.essentialsofborrowing.com.au
(source – MFAA. http://www.mfaa.com.au/default.asp?artid=2253&menuid=381)
