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Whether you’re financing your next home, funding your investment property, refinancing or applying for your first loan, our expert mortgage brokers have decades of experience in the field. In fact, some would say, they’ve seen it all when it comes to client loan applications. Which is great news because it means they have a wealth of insider secrets to help you avoid being rejected by the banks and for getting your loan approved. Below are 7 of the best…check them out!

  1. Be Prepared- Have all of your documentation ready and available to avoid delays or issues with your application. If you are not sure what’s required, ask your mortgage broker and never apply for a loan if you’re not well prepared.
  2. Stay Put- If you know that you’re going to apply for a loan over the next 3, 6 or even 12 months do not change jobs, cut your hours, go casual or temporary, switch businesses, or suddenly start a new company. Lenders like stability and a steady track record and will request evidence of continual employment as well as business results of up to 2 years, if self-employed.
  3. Honesty is the Best Policy– Do not, under any circumstance, lie, fib, omit details or fail to include relevant financial information on your application. Because the banks will find out and they do not like discrepancies, surprises or deceitful applicants.
  4. Don’t Check Your Credit Score– Banks do their own internal credit scoring on each loan applicant and it’s a little known fact but every credit enquiry you make registers as a negative mark against your credit score. So avoid making credit enquiries as this is not viewed favourably. Instead, have your broker do this on your behalf as this will not impact your credit history.
  5. Your History Counts– Banks see past behaviour as a good predictor for the future and with centralised credit analysis everything counts. So maintain a good credit rating at all costs. Which means paying your loans, bills and credit cards on time, as well as not exceeding your credit limits and demonstrating proof of savings. Banks will check up to 12 months of your statements and your credit history to verify this.
  6. Snow White Spending– Be mindful of your spending habits and keep them clean for a minimum of 6 months prior to applying. Lenders do not like seeing questionable spending on credit or debit cards such as regular withdrawals of cash at the Casino, which could indicate a gambling issue, or constant large purchases from liquor outlets, which could demonstrate a drinking problem. Also, don’t suddenly open new credit card accounts or spend erratically.
  7. Different Strokes for Different Folks- Understand that not all lenders are the same. In fact, some lenders specialise in different areas of lending. This means that just because you have your own business, are self-employed or had an issue with credit in the past that you won’t be approved. Speak with your broker and explain your situation so they can recommend the most suitable lender.

If you have any questions or need help with your loan application, call us today.

Cheers, Harry

“When I was in college, I wanted to be involved in things that would change the world.  Now I am.”  Elon Musk

I am a real fan of Spacex founder and CEO Elon Musk because this visionary entrepreneur dreams big. With his eyes fixed firmly upon the stars, his company is focussing on taking humanity to Mars. In fact he envisions a world where people may be born on Earth, yet live their lives on Mars as part of the first interplanetary human colony. Which is a pretty mind blowing goal.

However, to bring things back to Earth for a moment, you certainly don’t have to go to another planet to get a hot deal on your home loan. In fact there are just a 3 things to do to put yourself on track for securing the best possible home loan for your circumstances.

  1. Do Your Research – Get online, check out your real estate options, use our free mortgage calculator and look around for an experienced, professional mortgage broker. So you know what’s available in the market.
  2. Get in Contact – Pick up the phone or email your potential advisors. Ask questions and connect with professionals in the field. Your aim is to find someone you trust and with whom you feel most comfortable.
  3. Choose Your Team- Once you have found the right fit for your situation, choose your mortgage broker, and meet the team of experts which back them, to help you make your property dreams come true.

If you are looking for help with your home loan, refinancing or investing feel free to call us.  We are here to help.

Cheers, Harry

Bitcoins…love them, hate them or indifferent to them, they appear to be here to stay for the time being. Plus, with Bitcoin, there are now over 1650 other cryptocurrencies in existence which have a staggering combined total market capitalization of around $369 billion USD. So however you feel about the Bitcoin phenomena, you certainly can’t ignore it. *

But why has it caused so much debate amongst financial experts?

Launched in 2009, Bitcoin is recognised as the first cryptocurrency or digital money platform of its kind and has a limit of 21 million Bitcoins ever to be made available. Created by a software developer known only by the pseudonym Satoshi Nakamoto, it is not backed by any central bank, nor regulated by any state. With its original aim being to allow anonymous, untraceable, secure financial transactions to occur across the globe outside the control of governments, business or banks.

More recently, Bitcoin has taken the financial world by storm with its meteoric rise in value in 2017. From a relative low of $1260 AUD in January 2017, Bitcoin’s value skyrocketed to approx. $18,840 by December 2017 and today sits around $10,630 AUD. With this massive rise, many unwary investors have seen Bitcoin as a get rich quick investment vehicle. Meaning some have approached their mortgage broker to gain equity from their homes, look at refinancing or considered selling in order to buy the currency.

What’s the risk?

Bitcoin is very volatile. Experiencing huge swings in its price, Bitcoin has surged by as much as 80% within a month, however it has also plummeted in value by as much as -30% to 40% within days. ** So it is seen as highly risky and speculative.

To make matters worse, investors tend to buy when Bitcoin’s price is high and sell when it is low, so there is huge potential for losses. Plus experts are predicting that the bubble could burst, with the legendary stock market guru Warren Buffet warning investors, “Stay away from it. It’s a mirage, basically.” ***

There is also the danger of this online currency to be stolen by hackers or destroyed by computer viruses. So guaranteeing the protection of Bitcoins can be difficult.

Added to this is the cryptocurrency’s reputation for being used for organised crime, money laundering and murky transactions on the dark web. So some governments are looking to regulate.

All up, this is what makes Bitcoin a very risky business to me and you don’t need a mortgage calculator to figure that one out!

Until next time, stay aware, Harry

 

*https://www.fool.com/investing/2018/03/16/how-many-cryptocurrencies-are-there.aspx

**https://au.investing.com/currencies/btc-aud-historical-data

***https://www.mirror.co.uk/tech/what-is-bitcoin-currency-crash-10409961

Budgets…we all know that we need them, yet many of us avoid them like the plague. In fact, most of us will do pretty much anything else but sit down and take the time required to create and manage our own budget.

But when you stop to think about it, organising and managing our finances is an essential part of life. And the paradox is that if we don’t take control and manage our money ourselves, it will be our finances, or lack of them, which dictate to us what we can or can’t do in life. So our money starts to control us! That’s not a great strategy when you are looking at purchasing your own home, refinancing or investing.

So the question has to be asked, “Why do we choose to ignore the important area of budgeting?”

From experience it seems that the answer lies in how we perceive budgets and how they work. Because, let’s face it, spending is seen as fun and sexy, whilst budgets are boring and restrictive. However, there is nothing fun and sexy about not being able to pay our bills, save for our dreams and create the life we aspire to. On the other hand, with a good budget, focus and persistence, we can achieve our financial goals and live a life we love.

So my message to you is to organise your own budget sooner rather than later…you’ll be glad you did.

For some great budgeting tips, check out my previous blog on the subject here.  Alternatively, call us and speak to one of our professional mortgage brokers, we’re here to help.

We are often asked by clients, “Should I fix my interest rate?”

It’s a great question and one which is worth asking. However unfortunately there is no definitive, one size fits all answer to this particular enquiry. This is because it will always depend upon your current circumstances, budget, cash-flow, goals for the property (particularly during the fixed term period), how much flexibility you require in your loan and what you are aiming to achieve with your finances into the future.

On the other hand, if we look to the wider financial and economic environment, there are signs that interest rates may be on the rise in the near future. Firstly, in Australia we have had an unprecedented run of over 80 months straight without an interest rate hike.* In fact, the Reserve Bank of Australia (RBA) hasn’t increased rates since November 2010. Added to this, with the cash rate currently sitting at a record breaking low of just 1.5%, there is talk amongst respected economists that rates could rise within the next 6 months, and even as soon as early 2018. **

However, even with these conditions within the market place, no one knows for certain when and if rates will go up, unless they have access to a reliable a crystal ball. J So with this in mind, perhaps it is time to consider your options in regards to fixing your interest rate or staying with the variable rates available?

Below is a quick outline of some features of Fixed versus Variable Interest Rate Loans to help you to make an informed decision:

Fixed Rates

  • Interest Rates – Fixed for the term of the loan, usually from 1 to 5 years. If interest rates rise, you benefit, however if they fall you don’t. At the end of the fixed period, you can re-fix, or roll it over into a variable loan. It’s important to note that the roll over variable rate is not usually the most competitive, so ensure you make arrangements to get a better rate.
  • Flexibility– Once fixed, you can’t simply un-fix the rate during the period of the fixed term. So if you need to exit the loan early, there may be large penalties imposed by the bank, particularly if interest rates have moved upwards. Basically the lender will measure the economic cost of breaking the fixed contract and pass this on to you.
  • Extra Repayments and Redraw– Apart from one or two lenders, fixed loans don’t usually allow extra payments to be made or restrict extra payments to a small yearly allowance. And if you do make extra payments, once the money is in the loan, you can’t access it until the fixed period expires.
  • Best the Use When– You believe rates are going to rise and want to lock in a known interest rate before they do. When you are on a tight budget, don’t want to risk rising repayments, plus want the comfort of set repayments. Also, you know it will be unlikely for you to sell your property during the fixed rate period

 

Variable Rates

  • Interest Rates – These will rise and fall generally in line with the interest rate announcements of the RBA. If the rate falls you benefit, however if they rise then so will your interest rate and repayments. Lenders quote their Standard Variable Rate (SVR), however most of the variable loans we do are at a discount off this rate.  So, don’t judge the lender by their published SVR, but rather by the rate of their specific loan products. Discounts can be from 0.5% upwards, which can make a big difference.
  • Flexibility– A variable loan can be fixed at any time during the term of the loan. Apart from the cost of discharging the mortgage, around $350 for most lenders, there are no penalties for exiting the loan early.
  • Extra Repayments and Redraw– Variable loans usually allow you to make extra payments into the loan. And any extra funds you pay into the loan are available to redraw. Because of this, it can be a great way to maximise the interest on your savings. Plus, you could pay the loan down, but not pay it out fully. This would give you easy access to redraw funds without going through a full loan application process again.
  • Best the Use When– You believe interest rates will fall or stay stable and still want the freedom to make extra payments. When you have lump sum savings you can park inside the loan for some time. Or if you may wish to sell the property in the next few years.

As always, if you have questions or require further information, feel free to call us so you can speak with one of our experienced Mortgage Coaches. We’d love to hear from you.

Until next time,
Harry

Sources

* https://www.theguardian.com/business/grogonomics/2017/sep/24/the-markets-are-betting-on-a-rate-rise-by-mid-2018-im-not-so-sure

** http://www.abc.net.au/news/2017-10-02/interest-rate-rise-likely-within-six-months-economists/9007482

 

Have you ever had one of those turning point days in life? You know, the type of day which stops you in your tracks, shakes you to your core and seemingly changes everything overnight. I know I have. In fact, I can still clearly remember the specific situations and experiences which made me truly question where I was at and more importantly where I would end up if I continued on my current path.

Now these momentous days can occur in regards to our health, finances, relationships, career, business, family, personal beliefs or any area of life. Interestingly, at the time they occur we may not welcome the insights they bring and may even try our best to avoid facing up to the choices they offer. However, ultimately these defining experiences can bring great gifts if we have the courage to learn and grow from them. Better still, they can be the catalyst to shift the course and trajectory of our lives forever.

Perhaps one of my all-time favourite examples of the day which turns your life around comes from the classic wisdom of the late, great speaker and author, Jim Rohn. He was a man who inspired millions around the globe and he also influenced many of today’s leaders in the personal development industry. Additionally, Jim was a wonderful story teller and often shared insights from his own life to teach the universal lessons of success he wished to share.

I hope you enjoy his simple yet powerful story, because sometimes it is the smallest of events in life which can have the greatest impact upon our future results.

The Day that Turned Around Jim’s Life

Born and raised on the family farm in Idaho, USA, Jim Rohn was the only son of the local minister and his wife. Growing up Jim learned the value of hard work and persistence, but not much about how to create the life he dreamed of. From these humble beginnings and after a year at college, he dropped out to get a job as a department store clerk. Reasoning that after a year of college he was, “…thoroughly educated.”

However, by the age of 25 with a wife and children to support he was going nowhere fast in his career. To make matters worse he was just scraping by on his meagre salary, in debt and with no savings or cash available. And even though he knew he should be doing better he felt stuck in a rut of his own making. Then one day a small incident changed his attitude forever.

It was a sunny spring Saturday morning and Jim was home alone as his wife and children were out. Hearing a knock at the door, he opened it to find a rosy cheeked young girl, immaculately dressed in her Girl Scout’s uniform holding a basket of the famous Girl Scout cookies. With a smile, the youngster enthusiastically launched into her simple sales pitch for selling the cookies and finished with a very polite question, “Would you like one box or two, Sir?”

Immediately Jim’s heart sank. He would have loved to purchase two boxes from the eager faced Girl Scout in front of him. The problem was, not only did he not have the $4.00 in his pocket to buy two boxes of cookies, he didn’t even have the $2.00 needed to buy one box. Feeling ashamed and embarrassed he quickly lied to the youngster that he didn’t like the Girl Scout cookies and hurriedly closed the door. But that was not before he saw the disappointment and defeat written across the little Girl Scout’s crest fallen face.

Jim was devastated. In fact, this seemingly simple encounter left him feeling so disgusted with himself and the circumstances in which he found himself that he resolved to do something about it. He vowed then and there that he would turn his life around. It was from that point onwards that Jim Rohn, a penniless, debt ridden young man began to change his life forever. He found himself a mentor coach, created a plan and began to alter his attitude and actions. Over time Jim went on to become a self-made multi-millionaire and one of the true legends of the personal development arena.

So if you are feeling you’d like to turn your home ownership dreams into a reality sooner rather than later, why not call one of our experienced and qualified Mortgage Coaches today. They can advise you on your options and help you plan for your property purchase.

Perhaps this could be the day that you begin to turn your financial life around?

To your success champions,
Harry

As you may know, at Mortgage Coach our coachess get an extra special kick out of helping First Home Buyers (FHB) get into their own homes. So we are always looking for ways to assist them with their goals and smooth the way forward with their home ownership dreams.

So this week, I’m sharing some cool insights from a fascinating and enlightening new research paper by the Reserve Bank of Australia (RBA). * Apparently the RBA have been looking at changes in activity and purchasing success within the First Home Buyer (FHB) sector in Australia over the last 10 to 15 years. Some of the interesting stats they discovered include:

  • There was a downward trend across the sector with less FHB actually transitioning to home ownership in the years from 2008 to 2014 forward, as compared with during the previous years from 2001 to 2007
  • The biggest fall in numbers within the FHB sector, amongst those who became home owners, was within the 25 to 34 year old age group. This group fell from just under 12% of all FHB to just under 9%, with them delaying purchasing and therefore effectively becoming part of generation rent.
  • This delay in entering the housing market seems to be strongly related to increasing house prices within many of the capital cities across Australia, which has been making it more difficult to save for a deposit.

However, the points which stood out most clearly to me from this report were:

  • Even though FHB numbers may have fallen during this time, it was noted that those who successfully made the transition to home ownership were likely to be more capable with handling their loan responsibilities. They were also more likely to pay down their loans sooner and reduce their debt more quickly over time.
  • However, the FBH across all age groups, who had received financial assistance from their family and/or friends to create their home deposit, were much more likely to experience financial distress and hardship over the lifespan of their loan. They were also more likely to have to later rely upon family and friends to assist them with their mortgages and financial affairs.

Now, from these very salient insights into the current FHB market, I think there are a few important take home points on the benefits of developing the saving habit for FHB.

  1. Learning How to Save is the Key: At any stage in life, possessing the discipline of saving is a powerful habit to develop. However, when it comes to FHB it is an absolutely essential skill to possess. Not only does it demonstrate that you can live within your means and spend less than you earn, it also shows that you have the ability to manage your money and your financial affairs over time.
  2. Savings Builds Financial Resilience: Once you have mastered the skill of saving on a small income, this can later be applied to larger amounts as your income and expenditures grow. It also means that you will be more likely to be able to handle your affairs if you ever experience financial challenges because you have a proven track record that you can be responsible with your money.
  3. Demonstrating that you Have Genuine Savings: Perhaps most importantly for FHB, by having a solid savings history and a healthy self-generated deposit for your home, your lender will see that you are a good candidate for a mortgage. Because, as these stats show, if you can save first and manage your money well to create a home deposit, you are more likely to be able to do so into the future. In this way everyone wins as FHB are better money managers, more financially resilient and more likely to pay off the home loans, whilst the banks and other lenders gain clients who are deemed to be lower risk and good financial managers.

So if you are looking for ways to improve your saving habits in regards to your home deposit or have some questions on how you can get on the fast track to home ownership, feel free to contact us at Mortgage Coach.

Until next time, wishing you happy saving,
Harry

* Source report from the RBA

 https://www.rba.gov.au/publications/rdp/2017/pdf/rdp2017-05.pdf

We are told from a young age that the quality of loyalty is an important one to develop within ourselves. And in Australia, with the almost mythological status we place on the loyalty of mateship, it is also prized as the sign of a truly trustworthy and honourable character.

However, perhaps this old piece of wisdom is not always true or suitable in all situations? Especially when it comes to being loyal to our bank just because we feel it is the right thing to do. In fact, recent evidence has shown that for many Australians with loans, our loyalty could be costing us tens of thousands of dollars over the life of our relationship with our bank. Because even though we Aussies are very likely to shop around for the best interest rates at the time of taking out our loan, we are also equally likely to stick with our bank even if we can get a better rate elsewhere.

So the question has to be asked, “Is your loyalty to your bank costing you big time?”

For me, this is definitely the case when it comes to the interest rate on your home loan. Especially as a small difference in your interest rate can make a big difference to your total repayments. Therefore perhaps it is time to review your current home loan and look into refinancing with another lender?

This is where your qualified Mortgage Coach can easily help you with identifying refinancing options. And the process is not as difficult as you might think when you are in the hands of someone who knows how. Better still, by taking this one step alone you could literally save yourself tens of thousands of dollars, or more, in the long term.

For example, if we look at a few simple home loan scenarios, it’s easy to see how a simple switch to a lower rate of just 0.5% to 1% you could start saving thousands of your hard earned dollars straight away.

  1. On a home loan of $450,000 with an interest rate of 4.44%, over 30 years, your monthly repayments would be $2264 per month and your total repayments would be $815,065.
  2. On a home loan of $450,000 with an interest rate of 3.94%, over 30 years, your monthly repayments would be $2133 per month and your total repayments would be $767,820.
  3. On a home loan of $450,000 with an interest rate of 3.44%, over 30 years, your monthly repayments would be $2006 per month and your total repayments would be $722.037.

Now looking at these figures, if you can achieve as little as a 0.5% reduction in your interest rate, you could save yourself the tidy sum of $47,245. Which is a great result in my book.

However, it gets really interesting if you can gain a 1% reduction in your rates, because as you can see, this could equate to a whopping $93,028 saving across the life of your loan. And that is a fantastic result for anyone.

So my advice to you this week is to consider switching from an outmoded sense of loyalty to your bank, to a greater level of loyalty to yourself and your finances. Because with refinancing as a very real and viable option, you’ve really got nothing to lose and everything to gain.

As always, feel free to call us at Mortgage Coach to discuss your refinancing options.

Until next time champions, Stay loyal to yourselves.

Regards,
Harry

Number 1
A Mortgage Coach has an intimate knowledge of the lending secrets of the banking industry (Which means they know all the tricks for getting you the best deal possible—including access to the specialist loan products that the public are often unaware of)

Number 2
A Mortgage Coach is able to access specialist mortgage brokers’ networks at all the major banks (Giving them “inside track” access to the personal relationships commonly unavailable to the general public.)

Number 3
As accredited Mortgage Brokers, our coaches are members of the Mortgage Industry Association of Australia (The MIAA is the premier mortgage association in Australia and stringently regulates and monitors the people they accept for membership, meaning your personal details are in safe, trusted hands)

Number 4
As active and practicing professionals, Mortgage Coaches have many years of hands on experience in the finance and banking industry (And because they each write large numbers of loans a year, across varied and unique circumstances, these Mortgage Brokers are able to help ordinary Australians… just like you… secure the best finance options possible.)

Number 5
Approved Mortgage Coaches can access over 300 loans products through 30 different lenders (Which means you’ll get the widest variety of choice and flexibility so you’ll get the most up-to-date, best deal possible for your circumstances!)

Number 6
Professional Mortgage Coaches are trained to source the right loan for just about anyone (Including credit-impaired, self-employed or specific circumstance clients right through to the most credit-worthy of borrowers, and can help you tick all of the boxes with the bank, smoothing the path for your loan.)

Number 7
You’ll find it easy to deal with a Mortgage Coach as there’s one in your area, standing by to save you from the hassle of going into a bank, dealing with parking or navigating the many inconveniences some banks will happily put you through. In fact, your Mortgage Coach will meet you at home, work, (or even at a local coffee shop if you’d prefer!)…on your timetable… at your convenience.

 

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