Genuine Home Loans

Genuine Home Loans More than half of Australians now use a broker to secure a home loan. Probably the most important one

I can't believe we are coming to the end of 2023 😢 where has time gone? Thank you for a great year of learning, failures...
18/12/2023

I can't believe we are coming to the end of 2023 😢 where has time gone?

Thank you for a great year of learning, failures, successes and beautiful new friendships made throughout 2023!

Looking forward to a well-deserved break. 👏 and an exciting new year of kicking goals ✨️ 🙌

Wishing everyone a safe and happy festive season !! 🎄

Life is full of changes, and you may not stay in the same house forever. Irrespective of why or when you choose to chang...
17/12/2023

Life is full of changes, and you may not stay in the same house forever. Irrespective of why or when you choose to change your dwelling, closing your existing mortgage and applying for a new one could be cumbersome. With mortgage porting, it's possible to transfer your existing home loan to a new property and preserve your current loan terms.

The portability feature could be helpful if your current loan still suits your needs when you decide to move. The primary advantage of mortgage porting lies in the time and money it can save you by avoiding the need to close one loan and initiate another. However, it's important to note that some costs may still be involved, such as property valuations for your existing and new homes, and a potential small loan transfer fee.

Additionally, if your new loan amount exceeds 80% of the property's value, you might also need to pay for Lenders Mortgage Insurance, even if you paid it when you applied for the loan initially.

Offset accountAn offset account is a powerful tool that could help you pay off your home loan faster. You can think of i...
15/12/2023

Offset account

An offset account is a powerful tool that could help you pay off your home loan faster. You can think of it as a transaction account linked to your mortgage. However, the money in this account doesn't earn any interest. Instead, it is offset against your outstanding loan amount, reducing the balance on which you're charged interest.

For example, if you have a $700,000 loan and $50,000 in your offset account, you'll only pay interest on $650,000. This feature can lead to substantial interest savings over time while allowing you to easily access your funds when needed.

Paying more than your regular mortgage amount could be helpful in many ways. When you make extra payments on your loan, ...
14/12/2023

Paying more than your regular mortgage amount could be helpful in many ways. When you make extra payments on your loan, you save money on interest and can potentially pay off the loan sooner. Some lenders don't charge additional fees for this if you have a variable-rate loan. Even if your loan has a fixed interest rate, you might still be able to use this feature by paying a small fee.

Depending on your situation and the conditions set by your lender, you could opt to make a few lump sum payments throughout the year or add a little extra money towards your monthly repayment. This can help you knock off your debt faster and save you interest in the long run.

If you're worried about needing the money you've put into your loan, some lenders let you use a redraw feature. This means you can take out the extra cash you've paid into the loan if you need it urgently. But remember, using this feature increases your outstanding loan balance again because you're taking out some of the extra payments you've made. Still, in some situations, it might be better than getting a personal loan with high interest rates. It's important to crunch the numbers and consider what works best for you before deciding.

Here are some common home loan features that could make it easier for you to manage your mortgage.1. Extra repayments an...
12/12/2023

Here are some common home loan features that could make it easier for you to manage your mortgage.

1. Extra repayments and redraw facility
2. Offset account
3. Mortgage porting
4. Repayment holiday
5. Repayment frequency
6. Home loan top-up/ equity loan

Securing a home loan is a major financial commitment, and choosing the right home loan can greatly impact your financial...
11/12/2023

Securing a home loan is a major financial commitment, and choosing the right home loan can greatly impact your financial journey. However, it's a common misconception that the cheapest loan is always the best choice, which is far from the truth. To find the ideal home loan for your needs, it's essential to look beyond the interest rates and consider other factors, such as fees and a range of home loan features. These features can significantly affect how well you manage your mortgage.

Can you end up owing more than the value of your house?No, the negative equity guarantee protects borrowers taking out a...
04/12/2023

Can you end up owing more than the value of your house?

No, the negative equity guarantee protects borrowers taking out a reverse mortgage after 18 September 2012.

Negative equity protection was introduced in September 2012 to protect retirees from negative equity. This critical safeguard ensures that borrowers don't end up owing more than their home's worth, even if the value of the property used to secure the loan falls below the outstanding loan amount.

If you're taking out a reverse mortgage, make sure to check your contract for a negative equity guarantee. This important protection ensures that you won't be burdened with debt exceeding your property's value, and it also protects your heirs from inheriting any outstanding loan amount.

Remember that just like any other financial product, it's important to carefully evaluate the pros and cons of a reverse mortgage before deciding to apply for one. Reverse mortgages typically charge a higher interest rate than regular mortgages, and depending on your situation, other options might be available that better suit your requirements. Consulting with a financial expert or a mortgage broker can help you make a well-informed decision. You may also want to discuss the matter with your family members, as their inheritance is likely to be affected.

The amount you can borrow for a reverse mortgage depends on your age and the value of your property. Most lenders allow ...
04/12/2023

The amount you can borrow for a reverse mortgage depends on your age and the value of your property. Most lenders allow you to borrow up to 20% of your property's value when you turn 60. According to MoneySmart, this borrowing limit may then progressively increase by approximately 1% for each year of age.

Cons1. Compounding interestOne of the main drawbacks of a reverse mortgage is the accumulating interest. As there's no r...
29/11/2023

Cons

1. Compounding interest

One of the main drawbacks of a reverse mortgage is the accumulating interest. As there's no requirement to make any repayments, the interest on the borrowed amount accumulates over time, and the interest charges keep getting added to the outstanding balance. This compounding interest can significantly increase the overall debt by the end of the mortgage term.

2. Reduction of equity

As the debt grows, the equity in your home gradually reduces. Over the years, this reduction in equity may limit the available funds for other financial needs, such as moving into aged care or medical expenses. Additionally, it could also impact your estate planning by reducing the inheritance you leave behind for your loved ones.

3. Old age home

If you access funds using a reverse mortgage, your age pension eligibility may be affected. Consider speaking to an expert to find out about the effect of a reverse mortgage on any government payouts you receive or are eligible to receive.

4. Eligibility criteria

Not everybody might be eligible for a reverse mortgage. A reverse mortgage is generally only available to borrowers aged 60 years or above. Additionally, you should own the home outright to be able to take out a reverse mortgage.

A reverse mortgage is one option that retirees have to support their lifestyle by using the equity in their home. Howeve...
26/11/2023

A reverse mortgage is one option that retirees have to support their lifestyle by using the equity in their home. However, even though a reverse mortgage can be a helpful option for seniors who want to stay in their homes and need extra funds, it's essential to learn about the potential pros and cons to make an informed decision.

Pros:

1. Extra funds

A reverse mortgage can be a source of extra funds for retirees, allowing them to enhance their lifestyle or cover unexpected costs without the burden of making regular repayments.

2. No repayment obligations

Unlike traditional loans, a reverse mortgage doesn't require the borrower to make regular repayments. As long as the borrower lives in the house, no repayments need to be made, which may help reduce financial stress during retirement.

3. Retain the ownership of the house

A borrower retains full ownership of their property during the term of the mortgage, allowing them to continue living in it as long as they wish.

What is a reverse mortgage?A reverse mortgage can be understood as a special kind of home loan that retirees can access ...
16/11/2023

What is a reverse mortgage?

A reverse mortgage can be understood as a special kind of home loan that retirees can access to unlock the value tied up in their family home. Also called an equity release loan, a reverse mortgage allows retirees to borrow money against the value of their house to support their lifestyle in their retirement years.

The best part about a reverse mortgage is that one doesn't need to move out of the house or make any repayments until they continue living in the house. However, the loan must be repaid, along with the accrued interest, when the house is sold. This may happen when the borrower moves out of the house to shift to aged care or passes away. The money received from the sale of the house is then used to repay the outstanding loan, including the interest charges and fees.

Note that while you don't need to pay anything when you're staying in the house, you can choose to make voluntary repayments to reduce your debt. However, there are no mandatory minimum repayments or fixed repayment dates.

The interest continues to accrue and gets compounded throughout the duration of a reverse mortgage, adding substantially to the debt over time. This could pose a problem when you finally decide to sell the house, as there might be little equity left to pay for other expenses after the sale proceeds are used to repay the loan. Your heirs may also miss out on their inheritance if a substantial part of the house's value is used to cover the mortgage debt.

If you're heading into retirement and looking for a way to get access to some additional cash, it might be possible for ...
14/11/2023

If you're heading into retirement and looking for a way to get access to some additional cash, it might be possible for you to take out a reverse mortgage on your home. But it's important to understand how reverse mortgages work and their pros and cons before deciding whether it's the right option for you.

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3978

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