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Displaying items by tag: investment loan

Negative Gearing Here to Stay

25 April 2016, 12:00 am
Published in Featured Blog

The Coalition confirms it will rule out negative gearing from tax reform ahead of the election.

After weeks of suggesting the government might make some changes to negative gearing at the higher end of the income scale, Mr Turnbull said it was "common sense" to make no adjustments to existing arrangements.

RBA held interest rates steady at 2.00% for a 10th straight policy meeting today as widely expected.

However the door was once again left open to a rate cut should developments in economy, such as inflation, unemployment or risks from offshore warrant it, but there was little sign a move might be imminent.

"The board judged that there were reasonable prospects for continued growth in the economy," RBA Governer Glenn Stevens said in a brief statement.

"Continued low inflation would provide scope of easier policy, should that be a appropriate to lend support to demand," Mr. Steven said.


RBA left the official rate on hold for March 2016

1 March 2016, 12:00 am
Published in Blog

The Reserve Bank of Australia (RBA) has left the official cash rate on hold at 2% at its second monetary policy board meeting for 2016.

The cash rate was largely tipped to remain on hold today, with most economists and analysts agreeing the cash rate would steady.

Strong economic data, including moderate property price growth and a bounce back in consumer sentiment, provided the Reserve Bank of Australia with no reason to change the official cash rate.

In addition to the recent bounce back in consumer sentiment, data from CoreLogic shows property values continue to rise, with dwelling values across the combined capital cities climbing 0.5% throughout February.

RBA seemed to have more concern in labour market conditions and didn't rule out a rate cut this year.

If you are interested to know how to position yourself financially in current market condition, please contact us to arrange a discussion with one of our experienced lender manages.

Is your mortgage protected?

28 August 2015, 12:00 am
Published in Blog

Take out a mortgage is a big commitment. Like anything valuable in life, such as car, house and own health, mortgage needs to be protected in case something unexpected happens.

Many Australians with mortgages do not have adequate cover in place to service their loan in the event they lost their job, suffered a serious illness, injury or death.

It is important that you take the time to consider how you would meet your loan repayments should the unthinkable happen. 

We can arrange a simple, easy to understand and affordable solution that provides peace of mind by helping you and your family, your assets and lifestyle.

Simply ask your personal lending manager for the options.

Is your mortgage up to date?

2 December 2015, 12:00 am
Published in Featured Blog

Gus Friends, a corporate accountant, had had a mortgage with one major bank for several years.

Recently he completed a mortgage health check which eventually saved him more than two thousand dollars a year. "We took out a mortgage for our first home with one big bank three years ago. After we have had a child, our income was reduced as my wife took maternity leave. We felt a bit stretched financially. So we had a mortgage health check with a lending manager," said Gus.

A quick mortgage health check lets you get a clear picture of where you stand with your mortgage and finance and find out if you are paying the best possible interest rates and how much you can reduce the repayment.

You might have a higher interest rate loan when you took out the mortgage because of higher LVR at the time. With increase in property value and reduction of loan principal over period of time, the loan LVR may have well dropped which makes lower interest rate loans available for you.

For a loan of $500,000, a reduction of 0.20% in interest rates can save you more than one thousand dollars a year in interest cost.

“The whole process was straight forward and helped us see how we can improve our cash flow,” Gus said. “Our lending manager then gave us a tailor-made solution to reduce the repayment. We also got a free valuation over our property.”

Through a mortgage health check, you may also identify other opportunities hidden in your properties, either for investment or lifestyle.

To find out if you are having the best interest rates and receive a free and obligation-free mortgage health check with a complimentary CoreLogic RP Data property valuation, simply give us a call on 1300 884 689 or send us an email now.

Family Guarantee Mortgage

28 January 2016, 12:00 am
Published in Featured Blog

With property price goes north quickly, it is getting more and more difficult for first home buyers to save up enough deposit to get a foothold in the property market.

Family Guarantee/Pledge Mortgage is a mortgage scheme designed to enable parents to help their children bridge that deposit gap.

The basics of family guarantee mortgage is that parents are allowed to guarantee a specific amount to their children’s home loan, usually up to 105% of the price of new property.

Here is an example.

Julie wanted to buy a property of $500,000 as her first home. As part of purchase, she also needs to pay stamp duty and other cost total $25,000. So she needs $525,000 to complete the purchase. But she doesn’t have deposit.

Her parents David and Michelle agreed to offer her a guarantee of $125,000 with family guarantee mortgage with their property.

With this guarantee mortgage, Julie can borrow $400,000 with a mortgage over her new property plus $125,000 with parents’ guarantee mortgage.

Different banks have different rules for family guarantee mortgage. But the main principal rules are:

  • The principal borrower, Julie in our example, is responsible to regular repayment of total loan, $525,000 in our example;
  • Principal borrower secures a loan of 80% of new property value. $400,000 in our example;
  • Parents must offer their property as additional security towards mortgage. If there is an existing loan for parents’ property, the existing loan plus guarantee mortgage cannot exceed 80% of property value.

For example, David and Michelle’s property is worth $1.2 mil and they still have a loan of $300,000.

With family guarantee of $125,000, the total loan will be $425,000, which is under 80% of $1.2mil.

  • Parents are legally responsible to repay the mortgage up to guarantee amount in case principle borrower failed to repayment the mortgage.

It is possible that parents keep existing mortgage unchanged while offering family guarantee mortgage to another bank.

It is also possible for family member to help other family members using family guarantee mortgage.

Family guarantee mortgage has become a popular scheme for parents to help children overcome difficulty of deposit.

Not all lenders offer family guarantee mortgages, nor every lender has the same rules, it is advisable for borrowers to obtain professional advice from mortgage professionals.

We also strongly recommend both parents and children obtain legal advice before taking family guarantee mortgage. We are expert in family guarantee mortgages.

If you are interested in getting advice and sourcing family guarantee finance, please contact us to arrange a discussion with one of our experienced lender manages.

As a home owner or investor, when choosing a home or investment loan you should consider more than just today’s interest rates and which lender to choose. You must decide between fixed or variable rate loans and choose the loan that’s right for you.

A variable interest rate loan is a loan in which the interest rate charged varies as market interest rates change. As a result, your payments will vary as well.

The main feature of variable rate loan is its flexibility. You are usually allowed to make unlimited additional repayments as well as redraws. Many variable rate loans also offer facilities such as offset account.

Fixed interest rate loans are loans in which the interest rate charged will remain fixed for the certain period of time, from 1 to 10 years, no matter what market interest rates do. This will result in your payments being the same over the entire term (as long as you choose principal and interest repayment). Shorter term fixed rates are usually lower than longer term ones.

Compared with variable rate loan, fixed rate loans are less flexible. There are limitations on additional repayments and redraws. Also if you want to terminate the fixed rate loans before the term expires, you are subject to lender’s break cost.

Generally speaking, if interest rates are relatively low, but are about to increase, then it will be better to lock in your loan at that fixed rate. Your interest rate on the loan will remain fixed, even if interest rates climb to higher levels.

On the other hand, if interest rates are on the decline, then it would be better to have a variable rate loan. As market interest rates fall, so will the interest rate on your loan, hence your repayments.

If you are on a predictable income and want to stick with the loan repayment in the near future, a fixed rate loan is a good choice for you, as your loan repayment will be locked in for the entire fixed rate loan term.

On the other hand, if you plan to sell your property or rebuild your home, the flexibility from variable rate loan may be more important for you.

Why not taking the benefit from both worlds by mixing variable rate and fixed rates? It can be a good choice as well.

Above discussion is simplistic, as which loan or combination of loans are right for you depends on your individual situation and requirement. Are interest rates going to rise soon? How much more repayment I can afford if rates do rise? How about for investment loan?

Ask our lending manager. With experience of structuring loan solutions that are right for individual borrowers, they will give you the right answers.

The Reserve Bank of Australia has kept the cash rate on hold at its record low level of 2 per cent.

It is the eighth month in a row the RBA has left the cash rate on hold, with most economists expecting no change until the second half of this year at the earliest.

Mr. Glenn Stevens let the market to guess when and even whether next rate cut to come. On one hand, he left the door open for further monetary easing in the statement accompanying the rate decision. On the other hand, he remained optimistic about the local economy as a whole.

For home loan borrowers, more interesting is what the banks will do without RBA's cash rate movement.

In the end of day, banks determine their mortgage rate by so called "lending cost", not RBA's cash rate, and the margin they want to put on as their profit.

It is most evident by fixed interest rates which are totally independent of RBA's cash rate decision.

Recently we have also experienced banks increasing variable rates on their own.

Major banks started dancing to their own tune by raising interest rates between 0.15% to 0.20% in October, blaming tougher lending regulation. And smaller lenders all followed suit, even though the regulatory changes didn't apply to them.

Is it going to become a norm? Only time can tell.

Application Made Easy

28 February 2016, 12:00 am
Published in Blog

Loan application can be daunting and complex. 

We have made the whole loan application process easy for you.

Before anything else, your application is managed by a dedicated personal lending manager. Your personal lending manager will be with you at every steps of process, from choosing right loan structure, preparing application, collecting supporting document to status follow up and settlement.

With us, you don't need to complete application form. We will do it for you.

And we only need to collect the minimum supporting documents.

In most cases, we will arrange up-front valuation for your property, so that you will know exactly how much you can borrow before actual application process.

During loan assessment process, we will keep you informe with every stages of application. We will use any type of communication methods you prefer, such as email, phone calls, sms and facebook private messaging. 

We will also assist you with completing and signing loan contract.

During settlement stage, we will liaise with your solicitor / conveyancer to ensure a smooth settlement.

With rich experience and state-of-art technology we ensure your next loan application to be a smooth and hassle free one.

To find out more about our easy application process and how personal lending manager will help you, simply contact us now. 

ave to pay higher rates just because the loan is for investment. We have helped many borrowers get investment loans at lower rates. 

Changing bank has become easier with our personalised services and simplified application process. 

Our lending managers are experienced and focused to ensure you will get a better loan solution than the current one to achieve savings.

Interested in knowing how your home loan will improve with smart switch over? Simply give us a call on 1300 884 689or make an enquiry now.

RBA makes the final call on interest rate for 2015

1 December 2015, 12:00 am
Published in Blog

The Reserve Bank of Australia has decided to keep the cash rate on hold at its record low level of 2 per cent.

It is the seventh month in a row the RBA has left the cash rate on hold, with most economists expecting no change even at its next board meeting of in February.

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