Mortgage Group Australia

14/03/2024

Fixed rate home loans - are you paying a fortune for peace of mind?

Are you a planner? Do you like to organise things in advance, and enjoy the security of knowing what the future holds in store? Do you take a comprehensive list with you to the supermarket?

Well a fixed rate loan might be your perfect fit. Fixed rate loans are:

Great for managing a tight budget...

Fixed rate loans are an excellent option for anyone who is operating on a very tight budget. If an extra fifty dollars per week would mean choosing whether to feed your children, or put petrol in the car - this is probably the loan for you.

Great for peace of mind...

If you opt for a fixed rate loan, you will know exactly how much your repayments will be for the duration of the fixed period. Many lenders offer up to 10 years on their fixed rate loans, so this could give you substantial peace of mind.

Fixed rate loans can save you money...

If interest rates increase during the time when your rate is fixed, you will be immune. When everyone else is complaining about having to give up their daily coffee, you're safe in the knowledge that your repayments aren't going to change.

On the flipside though...

You will forfeit your chance to pay a reduced interest rate if the Reserve Bank rate is lowered. When other borrowers are enjoying a well-earned reprieve, you will still be making the same repayments. This can represent a significant cost to you if interest rates drop by half a percent or more.

Less flexibility

If you choose to fix your rate, you get security at the expense of flexibility. You probably won't be able to change the features of your loan during the fixed period, and most lenders don't allow you to make any lump-sum repayments when your rate is fixed.

It's critical that you take the time to research the different loan options available to you, and ask plenty of questions to ensure that the loan you choose is the best option for you. For many borrowers, fixed rate loans are an excellent choice to help you manage your budget and plan for the future.

12/03/2024

Use this free guide to help you make the right choice:https://www.mortgageaustralia.com.au/brokervbank.pdf

There is no better time to get your finances in order than when you are upgrading your home.

Get it wrong and you will pay thousands of dollars more than you need to.

Use this free guide to help you make the right choice:https://www.mortgageaustralia.com.au/brokervbank.pdf

09/03/2024

Switching home loans ?? contact us at Mortgage Group Australia Email:[email protected]

Switching home loans could help pay down your mortgage sooner, providing you are refinancing for the right reasons and understand what�s involved. Here�s our guide to refinancing to help you make the right move when the time comes.

Know the costs:
Paying 0.5 per cent less per annum on a $250,000 principal-and-interest mortgage could save you around $23,000 over the life of a 25-year loan. That�s a sizeable chunk of change back in your pocket over the long term, but there are usually up-front costs associated with switching loans, especially if moving to a new lender.

Know the costs of exiting your current mortgage loan before switching. Depending on the type of variable rate loan you have, the lender may apply fees if you choose to bow out. If you are on a fixed rate loan, a cost will usually apply when paid ahead of the agreed timeframe.

You should also factor in any set-up costs for your new loan, which can be several hundred dollars, and any ongoing account fees.

Only once you have factored in all of the associated costs will you be able to assess whether you gain financially by refinancing, and that�s where we can help you make the right decision.

Compare products and service:
A lower interest rate is a great reason to switch but it shouldn�t be the only deciding factor. Make sure the new loan is flexible enough to meet your needs and help you get ahead as quickly as possible. Some benefits to consider:

Can you make fortnightly repayments? You could pay off your loan quicker making payments every two weeks instead of monthly.

Can you make lump sum payments? Any extra repayments above and beyond your regular schedule will shave dollars and time off your loan.

Does the new loan offer a redraw facility? It�s great to stash extra cash in your mortgage to pay it down quicker but if you think you may need it back at some point, make sure your new loan lets you access those excess funds.

To fix or not to fix? We�re still enjoying low interest rates on the back of the historic lows the Reserve Bank of Australia cash rate is at, but make sure with any change you consider you have some wriggle room for if rates do rise. Make sure you�re future�proofing at every turn.

What features are important to you and think about the ones you could do without. Why pay for the bells and whistles attached to a loan if you don�t use them? Different features when it comes to technology, service and availability rank differently for everyone, so figure out what�s important to you and we�ll help you match it with the right product and the right lender.

Working with us to sharpen the pencil. Just one of the benefits of having us on side when it comes to your finance is our ability to work with the right lenders on the right price when it comes to things like your rate and your ongoing fees.

Switch to save:
Many borrowers refinance to consolidate debts, bundling credit card balances, personal loans or car payments into their mortgage, which usually carries a much lower interest rate. The benefit is lower minimum payments on your debts overall, which can be a benefit for cash flow. But that doesn�t mean you are saving on your home loan. Try to make the most of the lower rate to knock down the total debt quicker so you are not simply adding to the duration of your mortgage. And make sure you cancel any credit cards once you have transferred the balances into your mortgage so you are not tempted to rack up more debt.

Direct your debits:
If you switch to a new loan, make sure you also switch any direct payments and debits. It�s easy to lose track of what�s being paid, and how and when. Run through the most recent three months of statements for your original loan to identify any direct payments, and notify the biller as soon as possible so you don�t jeopardise your credit rating. You should also give your employer your new account details if your wages are paid directly into your mortgage.

Check your borrowing power:
One of the biggest oversights borrowers can make when shopping for the right home loan deal is their current financial situation. Has it changed since you took out your original loan? If the answer is yes, and it�s not for the better, you may find your borrowing power has shrunk, which could limit your refinancing options.

You may have: started a family and no longer have two full-time incomes; switched careers and now earn less; started your own business, creating a less regular income stream; accumulated other debt, such as credit cards or car finance; or eroded your credit rating through late payments. Any of these factors can impact your borrowing credentials, and may give you fewer bargaining chips than when you took out your original loan.

Do a thorough assessment of your total income, expenses, outstanding debts and credit rating so you understand your true financial position before shopping around.

Talk to your broker:
Take the time and stress out of shopping for a new loan by letting us as your mortgage broker handle it for you. We have access to multiple lenders with multiple products, allowing us to cast a wider net than you probably can on your own to find a home loan deal that suits your needs and circumstances. Brokers can also often gain access to lenders who are happy to take on self-employed borrowers, or those who don�t advertise heavily to consumers, but still offer competitive home loans. The benefits of having us onside are numerous; and the reason that now more than 52 per cent of Australian borrowers use a mortgage broker to arrange their finance.

09/03/2024

https://www.moneysmart.gov.au/

A wise person once said: failing to plan is a plan to fail. As probably the most significant purchase of your life, saving for a home definitely takes prior preparation and planning!

- How much can I afford?

You may have a dream home in mind but you first need to work out if you can afford it. There are many factors that feed into our decision around what to buy and where - proximity to work and family and our stage of life are just a few - but the single biggest decider is nearly always what we can afford.

It's really a case of looking at the big picture and working your way back from there. Consider your household income and what you realistically can afford in loan repayments, taking into account all of your expenses.

As a guide a mortgage calculator can be a great place to start, but it won't take into account all of your personal circumstances or eligibility for a loan so talk to your local Mortgage Broker to get your plan underway.

https://www.moneysmart.gov.au/

- How much do I need for a deposit?

Ideally, you should start with a 20% deposit to avoid paying lenders mortgage insurance (LMI). This is a one-off insurance payment charged by lenders to those borrowers who are considered a higher financial risk.

Your risk is determined by your loan to value ratio (LVR), which is the amount you wish to borrow divided by the lender's valuation of the property you wish to buy.

Lenders generally like to have at least a 20% buffer so if you have to default on the loan, they stand a good chance of recouping the loan amount through the sale of your property..

Although LMI can add several thousand dollars to property purchase costs, many borrowers consider it a worthy investment to help secure a loan with a lower deposit.

The critical factor is whether your income can support the higher loan repayments. Ask your broker for an LMI estimate based on your financial situation before deciding how much you need for your deposit.

- Saving for a deposit:

Working out how much you need for a deposit can be fairly easy compared to actually saving for it. Sacrifices are generally in order!.

?Budget cuts

The best place to start is a budget. Review all of your expenses, including day-to-day costs like lunches, coffees and transport, and your bigger bills, such as rent and electricity.

Don't forget to also include any annual bills such as car insurance and registration, which can sabotage your savings. Then it's times to get a little ruthless and look for ways to cut back on costs.

Here are just a few ideas:

- Make your lunches.
- Dine in, not out, with friends.
- Ditch the gym membership and start exercising outdoors.
- Make a list for your groceries and stick to it.
- Save, don't spend, your tax return and/or salary bonus. https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/mortgage-calculator

04/03/2024

Mortgage Group Australia

Avoid trouble when the bubble bursts - 5 ways to spot a housing bubble.

Purchasing a property is a major financial commitment, and hopefully a great investment that will serve you well. Unfortunately though, many purchasers don't recognise the warning signs, and make this great leap in the middle of a 'bubble' - when housing prices are suddenly inflated.

What happens next can be a devastating blow - the bubble bursts and your property is now worth less than what you paid for it.

Don't let this happen to you - look out for these 5 ways to spot a housing bubble...



Housing prices have increased rapidly

If prices in your area have climbed by 20% in the past few months, there might be other factors at play. Beware of sudden increases to property values, and try to find out who is paying more. In the past, Government incentives such as enormous 'first home buyer' grants have caused property values to rise with speed. When the schemes come to an end, the market will adjust itself accordingly, and many new purchasers can be caught unaware.



Affordability Figures are low

If housing affordability figures indicate that median house prices have become unaffordable for the average Australian, chances are that they will settle back down again at some stage.



Interest Rates threatened to increase

When interest rates are low, property sales figures are often very strong. Unfortunately once interest rates begin to rise again, property prices and selling rates will drop accordingly.



Relaxed lending criteria

Lenders tend to adopt stricter lending criteria during tough economic times. During the Global Financial crisis, many lenders required a 20% deposit on all new loans. When loans are being awarded freely, and lenders are advertising 95% finance or more, there is often trouble on the way.



Delinquencies

The United States was heavily impacted by the GFC, and the first sign of trouble was a higher rate of delinquencies. Freely available loans and very long mortgages contributed to a situation where finance was given to many purchasers who could not afford to service their loan.

Look out for a high rate of delinquencies which could signal that the bubble is almost ready to burst.

02/03/2024

Looking to refinance or buy a new
Home - contact Sara at [email protected]

Your Perfect Match - How to find a loan that keeps you warm at night.

Do you find that you're usually attracted to the same type of person? We all have a mental image of our perfect mate - some people are even lucky enough to wake up next to that person each day.

Just as the dating market can be tricky to navigate, it's easy to miss the signs and find yourself attracted to the wrong home loan.

To help you find a loan that loves you unconditionally, here is a quick run-down of the different types available.

Basic Loan

The basic home loan usually doesn't have a lot of fees. What you see is what you get. Usually you get a low interest rate, but you don't get much else. If you want some features, and flexibility this might not be the match made in heaven.

Introductory Rate loan

Otherwise known as a 'Honeymoon loan' this one is a bit like some new relationships. You get a really good deal at the beginning, and everyone is happy. After a year or two the honeymoon is over, and you find out what the loan will really cost you.

A good option if you want to keep your repayments down in the beginning - but make sure you investigate the interest rate that you will be charged after the introductory period.

Standard Variable rate loan

For those who want to be able to pick and choose their features, the standard variable rate loan could be your perfect mate. You generally get a low interest rate, but the flexibility to select some options that suit your needs.

Low-doc Loan

A low-doc loan is a good alternative for Self-Employed borrowers who are often unlucky in love when it comes to finding their ideal mortgage.

Low-doc loans allow you to use different methods of proving your income. The rules are usually a little less restrictive - but you will pay a much higher rate.

On top of this - most lenders require self-employed borrowers to contribute a 20% deposit, and cover all upfront costs such as Stamp Duty and Lenders Mortgage Insurance (LMI). This is a good option for people who don't have any other options.

100% home loan

Also known as a 'No-deposit' loan, this one allows you to borrow 100% of the purchase price. Don't be fooled though - this is not a free ride.

Most lender still require you to save a 3% deposit to cover the LMI, and you'll also need to make sure that you have enough left over to cover stamp duty, moving costs and conveyancing - and any other associated costs.

Sometimes these loans are available, sometimes they are not, it depends on the current lending environment - but it never hurts to ask.

25/02/2024

Can you find your Perfect Match ? Email me [email protected] and I can help you.

Your Perfect Match - How to find a loan that keeps you warm at night.

Do you find that you're usually attracted to the same type of person? We all have a mental image of our perfect mate - some people are even lucky enough to wake up next to that person each day.

Just as the dating market can be tricky to navigate, it's easy to miss the signs and find yourself attracted to the wrong home loan.

To help you find a loan that loves you unconditionally, here is a quick run-down of the different types available.

Basic Loan

The basic home loan usually doesn't have a lot of fees. What you see is what you get. Usually you get a low interest rate, but you don't get much else. If you want some features, and flexibility this might not be the match made in heaven.

Introductory Rate loan

Otherwise known as a 'Honeymoon loan' this one is a bit like some new relationships. You get a really good deal at the beginning, and everyone is happy. After a year or two the honeymoon is over, and you find out what the loan will really cost you.

A good option if you want to keep your repayments down in the beginning - but make sure you investigate the interest rate that you will be charged after the introductory period.

Standard Variable rate loan

For those who want to be able to pick and choose their features, the standard variable rate loan could be your perfect mate. You generally get a low interest rate, but the flexibility to select some options that suit your needs.

Low-doc Loan

A low-doc loan is a good alternative for Self-Employed borrowers who are often unlucky in love when it comes to finding their ideal mortgage.

Low-doc loans allow you to use different methods of proving your income. The rules are usually a little less restrictive - but you will pay a much higher rate.

On top of this - most lenders require self-employed borrowers to contribute a 20% deposit, and cover all upfront costs such as Stamp Duty and Lenders Mortgage Insurance (LMI). This is a good option for people who don't have any other options.

100% home loan

Also known as a 'No-deposit' loan, this one allows you to borrow 100% of the purchase price. Don't be fooled though - this is not a free ride.

Most lender still require you to save a 3% deposit to cover the LMI, and you'll also need to make sure that you have enough left over to cover stamp duty, moving costs and conveyancing - and any other associated costs.

Sometimes these loans are available, sometimes they are not, it depends on the current lending environment - but it never hurts to ask.

13/02/2024

Mortgage Group Australia

One size doesn't fit all when it comes to home loans. Make sure you choose a loan with the features and benefits that are right for you.

Here's a guide to common loan features and benefits.

1) Interest only repayments

You only pay the interest on the loan, not the principal, usually for the first one to five years although some lenders offer longer terms.

Many lenders give borrowers the option of a further interest-only period. Because you're not paying off the principal, your monthly repayments are lower.

These loans are especially popular with investors who pay off the principal when the property is sold, having achieved capital growth.

2) Extra repayments

If you pay more than the required regular repayment, the extra amount is deducted from the principal. This not only reduces the amount you owe but lowers the amount of interest you repay.

Making extra repayments regularly, even small ones, is the best way to pay off your home loan quicker and save on interest charges.

3) Weekly or fortnightly repayments

Instead of a regular monthly repayment, you pay off your home loan weekly or fortnightly. This can suit people who are paid on a weekly or fortnightly basis, and will save you money because you end up making more payments in a year, cutting the life of the loan.

4) Redraw facility

This allows you to access any extra repayments you have made. Knowing you have access to funds can provide peace of mind. Be aware lenders may charge a redraw fee and have a minimum redraw amount.

5) Repayment holiday

You can take a complete break from repayments, or make reduced repayments, for an agreed period of time. This can be useful for travel, maternity leave or a career change.

6) Offset account

This is a savings account linked to your home loan. Any money paid into the savings account is deducted from the balance of your home loan before interest is calculated. The more money you save, the lower your regular home loan repayments.

You can access your savings in the usual way, by EFTPOS and ATMs. This is a great way to reduce your loan interest, as well as eliminate the tax bill on your savings. Lenders provide partial as well as 100% offset accounts.

Be aware the account may have higher monthly fees or require a minimum balance.

7) Direct debit

Your lender automatically draws repayments from a chosen bank account. Apart from ensuring there is enough cash in the account, you don't have to worry about making repayments.

8) All in one home loan

This combines a home loan with a cheque, savings and credit card account. You can have your salary paid into it directly. By keeping cash in the account for as long as possible each month you can reduce the principal and interest charges.

Used with discipline, the all-in-one feature offers both flexibility and interest savings. Interest rates charged to these loans can be higher.

9) Professional package

Home loans over a certain value are offered at a discounted rate, combined with discounted fees on other banking services.

These can be attractively priced, but if you don't use the banking services you may be better off with a basic variable loan.

10) Portable loans

If you sell your current property and buy somewhere else you can take your home loan with you. This can save time and set-up fees, but you may incur other charges.

11/02/2024

Mortgage Group Australia

Do you feel a bit ill when you open the letterbox and see your credit card statement? It's happened to most of us at some point - a few untimely expenses pop up, and suddenly that credit card has a life of its own.

The good news? There is hope. You can get control of your credit card debt today with a few simple steps.



Stop the bleeding

It might sound obvious, but the first step to cutting down your credit card debt is to stop growing it. If you have any direct debits connected to the card, make other arrangements for these to come out of a bank account. Then, use whatever means necessary to destroy the card so that you can stop accruing debt.



Pay more than the bare minimum

If you only pay the minimum amount each month, you'll see many birthdays waiting for your credit card debt to decrease. In most cases, you will only be paying the interest on the debt without reducing what you owe. It's time to sit down and make a budget, and look for ways to pay as much as possible off your credit card each month.



Work out your priorities

If you have debts on more than one credit card, your instinct might be to pay the largest amount off as a priority. Alternatively, try focussing on the card with the highest interest rate. It's also worth knocking over your smaller cards first (and then cancelling them) so that you can concentrate on one monthly repayment.



Try a balance transfer

Many lenders offer great introductory rates on new credit cards. Some even offer rates of 0% for the first 6 or 12 months. This presents a great opportunity to work on getting your balance down, without being charged interest.

Beware though - it's important to investigate what your interest rate will be after the introductory period. It's also vital that you do pay as much as possible off the balance. If you don't reduce your debt, and if the standard interest rate is higher than what you had before - you will only do further damage.



Save for a rainy day

Many of us get into trouble with credit cards because we don't have adequate savings when something unexpected comes up. While you work hard at reducing that credit card debt, try to put a little bit in savings each month and build up a buffer. That way if you suddenly need a new set of tyres or a hot water service, you won't undo all of your good work by whacking it on the credit card.



Put your hand up

If you can't seem to get control of your finances and you feel like the situation is getting worse every day, it might be time to ask for some help. There are experienced financial counsellors and legal representatives who can help you to make a plan and get back on top of things again.

04/02/2024

It’s really important that you take the time to
R to compare the loans available to you , and choose the loan that suits your lifestyle and budget. Contact me today @ Mortgage Group Australia Sara on 0424363808

Variable Interest Rate - Are you sure this is the right choice for you?

With so many different loans on the market, it's easy to get a little confused. It's not always simple to work out which lender is offering the best deal, or who has the best interest rate.

One of the main choices you need to make early on, is whether to opt for a standard variable interest rate, or a fixed rate loan.

Many lenders offer fixed rate loans for 1 to 3 years, some even offer periods of up to 10 years without a change to your interest rate. So with all of this certainty on offer, what are the benefits of the old-fashioned variable interest rate?

Lower interest rate

Usually your rate will be lower than a fixed rate mortgage, meaning that you pay less interest. Variable rates are generally lower than fixed rates. If you choose to fix your rate, you're paying for the certainty that this offers.

Take advantage of decreasing cash rate

If your lender reduces their standard variable interest rate, your interest will be reduced accordingly, meaning that you always pay the lowest standard rate that your lender is offering. So when the Reserve Bank lowers the official cash rate, there is a good chance that your repayments will reduce.

Features and Flexibility

Usually standard variable rate loans offer an array of features that you don't get with a fixed rate loan.

Most variable rate loans give you the flexibility to make additional payments when you want to, but then redraw the extra money again later if your situation changes.

Many lenders also allow offset accounts for your savings which reduce the overall interest charged on your loan - because the bank takes your savings into account before calculating your interest.

When you opt for a variable rate loan, you always have the flexibility to fix your rate later, meaning that you can wait and see if rates are further reduced, potentially saving you money. If you have already fixed your rate, you will continue to pay the same interest rate even when the official cash rate continues to decrease.

On the other hand though, if the official cash rate rises, your loan repayments will increase accordingly. Did you make the mistake of borrowing too much? If you opt for a variable rate loan, and then interest rates start to rise, you might find that you struggle to meet your repayments.

To avoid issues in the future, it's really important that you take the time to compare the loans available to you, and choose the loan that suits your lifestyle and budget.

26/01/2024

Is 50 sneaking up on you or has it arrived for someone you know?

The biggest question on most people's minds (in the age group 50 to 65) is... "Will we outlive our savings?"

There are plenty of options available to properly fund your retirement, as long as you start early enough.@ Mortgage Group Australia

Is 50 sneaking up on you or has it arrived for someone you know?

The biggest question on most people's minds (in the age group 50 to 65) is... "Will we outlive our savings?"

There are plenty of options available to properly fund your retirement, as long as you start early enough.

For more details, read our "Is 50 quickly approaching" guide.https://www.mortgageaustralia.com.au/email/files/is50quicklyapproaching.pdf

10/01/2024

Mortgage Group Australia Mortgagegroupaustralia

We can relate to this 😊

If you spent a bit too much this Christmas, a debt consolidation loan at rates far less than your credit card's is a great way to get back on track.