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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

Are you ready to buy your own home, but don’t know what to do next?

For First Home Buyers it can seem like an eternity before you finally feel ready to purchase your own property.  It’s exciting. You’ve done the hard yards, researched the market, put together a deposit, checked out a mortgage calculator and organised your financial affairs accordingly. At last you feel that all of your ducks are lined up and ready to go. But what you do next can make all the difference as to how smooth and stress free the next stage of the process will be.

This is where a simple phone call to a qualified mortgage broker can help. Because seeking professional advice and expert help along the way is the key step to getting it right the first time around with your finances and loan application. In fact an experienced mortgage broker will save you:

  • Time,
  • Effort and Energy,
  • Stress,
  • Potentially thousands, if not tens of thousands, of dollars over the life of your loan by ensuring you get the right mortgage with the best features to suit your specific circumstances.

So if you are ready to own your own place, make sure all of your hard work and effort pays off and call us on 1300 559 229 today. Because the choice to own your first property is an important one, one which can form a solid foundation for your financial success into the future. And that’s worth getting the best professional advice available.

Until next time champions, we’re only a phone call away, 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

The choice to live together, get married or re-married is a life changing one. And even though it’s easy to be swept up in the excitement of new love and the wonder of feeling we have found the one, there is a number of key questions to ask before joining forces and finances. Because being able to have open, honest discussions about your finances now is a key ingredient to building a great relationship and solid financial foundation into the future.

  1. Where Are You Financially? – Make time to discuss each partner’s current financial position before jumping into the next stage of your relationship. This means understanding what each brings to the table, including assets, liabilities, income, expenses, savings and ongoing responsibilities. Speak with your mortgage broker regarding structuring joint loans or refinancing existing mortgages if required.
  2. How Do You Handle Money? – Check out each other’s financial IQ and see where your strengths and weaknesses lie. Is one partner a saver, whilst the other is a spender, does one partner earn a high income whilst the other has built assets or passive income or perhaps one of you is better with budgets and managing money?
  3. What Are Your Future Goals? – Share your financial goals and expectations for the future and see where you share similar dreams or desire different outcomes. Once you’re clear on these decide upon what you wish to achieve as a team. Set joint goals and agreements on how you will reach these together. Check out our online mortgage calculator to help plan your future property goals.
  4. What About Children? – Discuss your thoughts around having children or, if you already have them, how you will care and provide for them into the future. It is wise to discuss expectations around when to start a family and how many you would like, who will be mainly responsible for childcare or how you’ll handle a blended family if you already have children.
  5. What if Someone Leaves? This can be a difficult to imagine, but it’s important to consider what will happen if your relationship ends. Talk about a fair and equitable exit strategy should you break up or divorce. You can put this in writing via a pre-nuptial agreement, especially if you are marrying for the second time.
  6. How Can We Protect Ourselves? Discuss life and health insurance, income protection, structuring joint property, mortgages, assets and superannuation funds so you have a plan should either of you become ill, incapacitated, unable to earn an income or retire.
  7. What if Someone Dies? Finally, it is important to share your wishes in the event of your death or your partner’s. This means creating or updating your Wills and considering how assets and finances will be handled for your spouse and children.

Until next time champions… ask the hard questions today to avoid heartache in the future.

Harry

As the great physicist, Sir Isaac Newton said, “What goes up, must come down.” However, when it comes to interest rates, the reverse is also true. Because we all know that Australia’s historically low rates cannot stay that way forever, and must begin to rise in the not too distant future. And even though there are mixed opinions amongst the experts on when the rate rise will occur, most agree that is only a matter of time before this happens. Which means at least one rate rise, if not more, is predicted in 2018.

7 Things to Do Before a Rate Rise

  1. Contact Your Mortgage Broker – Having a conversation with your broker is vital to keeping yourself informed and up to date with what’s currently available in the marketplace. Because new, improved loan products are continually being released and your broker can recommend the best product for your specific situation.
  2. Check Your Position – Once you understand what’s available, you can go to work and check your current financial position. Use our handy online Mortgage Calculator to run different interest rates and repayment levels to see how a rate rise could affect you.
  3. Consider Your Options – Ask yourself, “What would be the best scenario for my circumstances and what do I want to achieve for the future?” By being clear on the various choices available to you, you will make better decisions for the long term.
  4. Refinancing – Are you able to refinance your current loan or perhaps you may wish to fix your interest rate at the current low level for a period of time? Each has their potential benefits, but you must choose the best option for your situation. Ask your broker how.
  5. Budget, Budget, Budget- Create a budget and stick to it. This means being mindful of your money, cutting costs, spending less and living within your means. By doing so you won’t be over extended and financially stressed when rates do go up.
  6. Pay Your Mortgage Down – By paying your loan down faster with extra payments or by depositing lump sums, you can save money now and have your mortgage paid off years sooner. Plus when rates do rise, you’ll already be ahead of the curve with less to pay off in the future.
  7. Pay at the Higher Rate – Try paying off your loan as if you already had the higher interest rate on your loan. This means you’ll be paying off more each month and will be comfortable with the new amount when the rate rise occurs…because it will.

Until next time, stay prepared!

Cheers, Harry

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.

When it comes to financing the purchase of your property or refinancing your current loan… the simple truth is your numbers count. So it is very important that you get to know your numbers before applying for your loan. And the best place to start with this process is by using the humble Mortgage Calculator.

Why? Because to use one of these super handy little mathematical geniuses you’ll need to get very clear on your particular set of numbers. These include the following variables:

Total Transaction Amount- This is the total dollar amount required to cover your property purchase and includes the agreed price of your property, stamp duty (if applicable) and any other associated in costs.

Deposit Amount- This is the total amount of cash funds and savings you have available to put towards your purchase.

Loan Interest Rate- This is your estimated % interest rate for the loan. Your mortgage broker will help you get the best rate possible for your circumstances.

Term of the Loan- This is the period of time over which you will repay your loan. This can range from 5 to 30 years, depending upon your situation.

Payment Period- When do you intend to make your loan repayments? Do you prefer weekly, fortnightly or monthly repayment cycles?

Repayments- This is the dollar figure of your regular minimum repayment amount and will be determined by your other numbers. Call us to calculate this for you.

Feel free to call us at Mortgage Coach and speak to one of our professional mortgage brokers to help answer your questions.

Until next time, here’s to knowing your numbers.

Harry

You should always take into consideration your personal circumstances as mortgage calculators do not take into consideration fees and service charges and any changes that may happen during the period of the loan. They should only ever be used as a guide.

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

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