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Choosing the person who will help you make one of the most important decisions in your life can be daunting. Here’s how to find your finance broker. Many people find the right finance broker by asking their friends for referrals. This is a fantastic place to start. But sometimes, no one can recommend one in your local area, or you find you just don’t ‘click’ with an adviser someone recommended. Before talking with any finance broker, find out if they are an ‘MFAA Approved Finance Broker’. You can use the MFAA website’s ‘Find a Member’ tool to check. This accreditation ...[read more]
That depends on who ‘you’ are. When you take out a mortgage or home loan, you can choose to have an interest rate this is fixed, variable, or split (a combination of the two). There is no right or wrong option – it all depends on your circumstances. Fixed rate home loans With the fixed rate home loan, the interest rate on your mortgage doesn’t change for an agreed period (usually 1-5 years) – no matter what happens to official interest rates. Variable rate home loans With the variable rate home loan, the interest rate on your mortgage can change. If official interest rates go down, ...[read more]
With the RBA setting the official cash rate at all-time lows, it’s a good time to work out how this impacts the interest rate on your home loan and whether you are getting a good deal or not. When the interest rate on your home loan fluctuates, it can feel as though you don’t have control of your debt. Despite being frustrating, interest rate changes are a part of every loan’s lifespan and warrant your consideration. The interest rates that banks charge on their home loans are influenced by the Reserve Bank of Australia’s (RBA) cash rate. The cash rate is reviewed by the RBA on a ...[read more]
Getting your mortgage application together can require quite a bit of financial scrutiny. In order to figure out your serviceability, your potential lender will look deeply into your finances. It’s a no brainer to take your credit card debts into consideration when applying for a mortgage. But what many people do not realise is that high credit card limits will not bode well for a home loan application. If you have a high credit limit, you also have a high debt risk in the eyes of your lender. As the logic goes, there is no stopping you from boosting your credit card limit the day after your...[read more]
Before you take the leap into holiday-home investment, it is essential that you consider all angles. This means taking your heart out of the equation and giving thought to rental returns. When deciding whether or not to buy a house or unit, you’d be best served to consider location first. In fact, location has a great deal to do with the success of your investment property if you will be renting it as a holiday destination. “Sometimes people are torn between where they would prefer to holiday as opposed to looking at the logistics of what will rent better, and what niche markets they can ...[read more]
When was the last time you looked closely at your loan, the progress you are making on paying it off and how it compares to others in the market? Analysing your mortgage could mean savings for you, as well as the opportunity to pay it off more quickly, invest in other assets or reach financial freedom sooner. Make smaller payments, more often To cut the size of your payments, make more of them. This could even see you pay off your loan faster, and therefore pay less interest overall. If you pay your mortgage monthly, consider changing to fortnightly repayments. For example, if your mortgage ...[read more]
Late payments and loan defaults leave marks on a credit history that can complicate any effort to refinance or secure a loan in the future. Default can also lead to a home being repossessed and sold by the lender, so it’s very important to act quickly to avoid it. While late bill payments and a loan in arrears can impact your credit report and lead to difficulty securing finance in the future, the worst case scenario is repossession of a property. In the past, lenders may have taken months to start the proceedings that lead to repossession. However, according to the Financial Rights Legal ...[read more]
When you’re desperately trying to save up a deposit for a home and just see the prices of property climbing and climbing, it’s difficult to remain patient. But there is another way: a guarantor can help. If you don’t have a substantial deposit for a home loan, there are still a number of ways to obtain credit. These are known as family pledges and there are two types available to borrowers: service guarantees and security guarantees. Service guarantees are less common that security guarantees, explains an MFAA-accredited finance broker, and they involve a family member guaranteeing all ...[read more]
Rising house prices are making it increasingly difficult to enter the market. Parents who guarantee their children’s loans can help, but it is important to understand how this can impact the parents’ retirement or investment plans. Being a guarantor generally means using the equity in your own property as security for your child’s home loan. It can help a first-home buyer to secure finance for a property they can afford but may not have a large enough deposit for, and to avoid the added cost of lenders mortgage insurance. There are other advantages as well. “By guaranteeing a loan, ...[read more]
The stakes were high for David and Karen, who were dealing with a child’s ill health and, as a result, extreme financial and emotional stress. David and Karen were facing a number of difficulties in their life. First, their second child had fallen seriously ill. The family was regularly flying interstate to a Melbourne hospital for the best treatment available, leading them to require time off work. Ultimately, the situation began to take a toll on their finances and they were struggling to juggle their mortgage and three overdrawn credit facilities. Not surprisingly, it was also taking its ...[read more]