Is it time to fix your rates?

After many months of fixed rates lower than variable rates, December and early January saw fixed rates start to creep upwards which would suggest that at least the fixed rates have bottomed.

New data has found a growing proportion of borrowers are seeking the security that comes with a fixed rate home loan.

According to the latest national home loan approval data from a leading mortgage broker, fixed rate home loans accounted for 22.04% of all loans written in December, up from 19.51% in the month prior. The fourth consecutive month that has seen fixed rate demand increase.

With speculation mounting that the Reserve Bank of Australia may soon lift the official cash rate, it is clear that a growing proportion of borrowers wish to beat any potential rate hikes by opting for a fixed rate home loan.”

Current market conditions combined with a spate of rate increases by Australia’s lenders before and after Christmas has meant a rate rise by the Reserve Bank this year was now more likely than not.

It is also noted that the Reserve Bank of Australia has stated that the time for easing the monetary policy setting has now passed. All of these factors combined would suggest that a rate increase by the Reserve Bank could be right around the corner.

Borrowers understand this and that is why a growing proportion of mortgage holders are opting for fixed rate products to beat the threat of rising rates. Some are also switching to ‘combo’ products which allow the loan to be split into a fixed and variable component.

At Brickhill Financial Solutions we have access to many fixed rate products from a range of Australian lenders. Please give us a call to discuss your options and find out more.

 

Brickhill Financial Solutions – 1300 252 088

Bridging Finance

Ready to build or buy now, but haven’t yet sold your old property? Bridging finance could be the answer to keep the ball rolling.

Trying to sell one property and buy another can be quite a daunting and emotional process, especially when the timelines of both projects don’t match up perfectly.
Generally, people can be a bit nervous or anxious, but it’s an education process for them.
One of the services that we can offer clients is assistance in applying for bridging finance. A bridging loan is usually just an extension of the loan amount on a regular home loan, and it can cover the purchase price or construction costs of a new property while your old one is selling.
Most lenders offer a period of interest-only repayments on bridging loans, allowing borrowers to get into their new home sooner without having to start paying off a full mortgage before selling the old one.

Give us a call on 1300 252 088 to find out more.

7 Things to Know Before Applying for a Home Loan

 

With interest rates still near historic lows many people are ready to buy their next home. Buying a home is a big decision and being prepared for what’s to come will help make the process easier.

 

Here are some things to keep in mind before you apply for your mortgage:

  1. Learn the lingo

There are many different types of mortgages out there and each offers unique benefits. Learn the basics about fixed rates, variable rates, first home owner grants, mortgage insurance. Strive to understand how mortgage interest rates impact your monthly payment.

 

  1. Determine what you can afford and the like instalments

Use a mortgage calculator to figure out what you can afford. Consider making a higher deposit as it will reduce your mortgage payment.

 

  1. Work with your Broker

Your broker will guide you through the loan process. Never hesitate to ask questions. The loan process can be complex, but always seek answers to your questions.

 

  1. Don’t open new accounts

Don’t even apply for new credit cards, mobile service, store accounts or any other lines of credit. Doing so could alter your credit report and have an impact on the type of loan you’ll be able to receive.

 

  1. Don’t close existing accounts

Keep all your active accounts, even the ones with a $0 balance. Existing accounts maintain a credit history. The longer your credit history, especially with a good payment record, the better. Continue to pay down debt, but don’t close the accounts after they are paid in full.

 

  1. Don’t change your job

A stable employment history is very important. It is best if you have been employed at the same job for at least two years and preferably longer. If you haven’t, you may still be able to qualify, but stay at your job if you can help it until the loan process is complete.

 

  1. Pay your bills on time

Avoid making late payments to avoid being denied a home loan or having to pay a higher interest rate. Late payments reduce your credit score, which may  have a direct impact on your loan application.

 

Buying your next home or investment property is an exciting moment in your life. It is also a big decision. If you follow these tips, you can be more prepared to apply, get pre-approved and settle your mortgage. Make sure you ask your lender lots of questions. Strive to understand the process.

 

Give us a call on 1300 252 088 to find out more.

What should your property strategy be in 2017

Did you make a new year’s resolution? What are you looking to focus on this year?

We spoke to property experts to see which areas buyers, sellers, and investors focus on in 2017. Here are the key issues and areas your property strategy should address.

What five things should buyers focus on?

 

What new infrastructure or developments might affect the property you wish to purchase?

In 2017 buyers, should look at future developments and infrastructure projects that could have an impact on properties they wish to own, says buyer’s advocate and qualified property investment advisor Cate Bakos.

Here are the five things Bakos says buyers should keep in mind in 2017

  1. How sure are you of your finance? 

“Lender scrutiny has increased. It’s not as easy to get a loan as it was,” Bakos says.

Lenders are now pickier about who they lend to and how much they lend, following APRA’s changes to borrowing criteria.  Off-the-plan and apartment buys are now heavily scrutinised by the banks.

  1. Where is the market moving?

Despite the talk of demand and high prices, buyers need to look at where prices are actually heading.

“Assuming that prices will fall or remain the same is a little bit naive if we still have the same forces driving our market.”

  1. What’s the real value of the property?

Look closely at what is going on in the area, to work out the value of the property you wish to buy.

“Be prepared to do your own research and track what properties sell for, or looking at recent comparable sales is really important if you want to be able to understand where you need to pitch your offer or prepare yourself for an auction,” she says.

  1. Is it located in an appealing area?

Bakos says buyers should try to secure a property in an area that is desirable to residents in the long-term.

Factors such as proximity to public transport, good local cafes, parks and leisure facilities will attract more buyers to your area in the long term. This helps with the resale value of the property.

  1. What zoning may apply to the purchase?

Bakos says buyers should check the zoning for the property and make sure the bank is comfortable with it, before signing an unconditional contract.

What five things should sellers focus on?

Make sure you have done all the repair jobs the house needs before you list the property for sale.

Buyers should do their homework and be ready to make their move in 2017, says LJ Hooker Head of Real Estate Christopher Mourd.

Here are the five issues he thinks sellers should focus on to make the most of market conditions this year.

  1. Clearly identify the next step

Many people may sell the family home first before buying the next property. Mourd says sellers need to be prepared for what happens next, which could involve things like renting until the right property has been secured.

“Be clear on the next step. So you cannot make a decision on selling your home, you cannot make a decision on price on your home, until you understand where you are going to. Many people leave that quite open and hope to sell and then clearly research what they’re going to do next. I say research that up front,” he says.

  1. Be sales ready

Buyers notice when all the little maintenance tasks and repair jobs have been completed before a property is put on the market, Mourd says.

Make sure the house isn’t cluttered and the garden is clean and tidy. Consult an agent first if the home requires major repairs to avoid over capitalising.

  1. Know the competitive stock in your area

The price the bloke down the street got for his place isn’t that relevant, says Mourd. Go to open for inspection for homes that are similar, better and priced lower than your own to get a full picture of the competitive stock in the area.

  1. Attend auctions before and after listing your home for sale

Be disciplined and attend all the local auctions, both before and after you list your home for sale.  This helps with things like demand, realistic price comparisons and buyer demographics for homes like yours.

  1. Is site amalgamation an option?

Love thy neighbour and thy neighbourhood when you go to sell.

Research the zoning in your area, and if your home is in an area that is earmarked for higher-density housing, are your neighbours also willing to sell? If so you could attract a much higher price than selling on your own.

What five things should investors focus on?

Regional areas can offer good returns. Propertyology’s Simon Pressley says 2017 will be a big year for investors who need to look beyond the headlines.

  1. Look forward, not backwards

“Don’t be a creature of habit and make a decision based on what’s happened in recent years. You need to look at the front windscreen, not the rear-vision mirror,” he says.

  1. Be realistic about cash flow

Given the amount of investment loans that have been approved for new buildings, particularly in Melbourne and Sydney, investors need to be realistic about rental returns.

“Don’t be surprised if rents actually ease in those two big cities,” he says.

  1. Take a good look at regional Australia

Pressley says regional towns with good essential infrastructure and a range of employment opportunities across different industries often have more affordable housing with strong rental returns, particularly areas with a local hospital or university.

He says places like Cairns (QLD), Bendigo (VIC), Tamworth (NSW), Busselton (WA) and Launceston (TAS) can offer great opportunities for investors.

  1. Look closely at housing supply

The supply of housing stock, particularly in places like Sydney, is set to change. Investors need to thoroughly research the housing developments in the area where they wish to buy. It could be that four new apartment blocks have already been approved for construction in the same street.

  1. Ignore your personal taste

Investors are buying a property to make money and you won’t live there says Pressley. Ignore how suitable the property might be for your tastes and lifestyle and think about what potential renters want.

Danielle Cahill – Realestate.com.au

 

If you need any advice or assistance with the finance for your property strategy,

please give us a call on 1300 252 088

What Do I Need to Know About Debt Consolidation?

If you’re swamped with credit card debt and personal loans, it can sometimes help to talk to a professional about debt consolidation. However, you need to be wary. You might end up paying more in the long term and/or reduce the equity in your home.

What is debt consolidation?
Debt consolidation is where you transfer your credit card debt and any personal loans to your mortgage. The advantage of doing this is that the interest rate on your home loan is likely to be lower than you’re paying on your smaller debts. You might also benefit from a regular manageable repayment. However, there are some things you need to be aware of.

Debt consolidation is not debt elimination
Since debt consolidation clears the debt from your credit cards, the temptation is to think that you’ve paid off the debt. But you haven’t. You’ve merely transferred the debt to your mortgage. So, once you’ve consolidated your debts, consider snipping your credit cards in two. Otherwise, you could get trapped in a debt spiral.

Remember the 80% LVR threshold
When you took out your mortgage, you might have been under the 80% loan to value ratio, which meant that you didn’t have to pay lenders mortgage insurance. Be careful when you consolidate your debts that you don’t reduce the equity in your home and have to pay lenders mortgage insurance.

Personal loans aren’t tax deductible
Interest charges on an investment loan are tax-deductible but interest on a home loan isn’t. When you consolidate your debts, you need to be mindful of how much interest you can claim as a tax deduction. Seek advice from an accountant or tax agent before making a decision in this area.

Give us a call on 1300 252 088 to find out more.