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I love being a Mortgage Broker!

Helping people achieve their dreams whether it’s buying their first home or adding to their retirement investment portfolio is immensely satisfying.  Unlike a bank manager, my job is to sit with my client and navigate the thousands of options available from multiple lenders to ensure we find the most suitable one.  I also make sure they know what extras might be advantageous to their specific circumstances.   In many cases, customers are unaware of the many extras that exist!

We have a great team at Origin Finance!  If you have ever thought about becoming a Mortgage Broker, give me a ring and I’ll give you the scoop!

Your Loan Approval May Not Be Worth The Paper It Is Written On

Over the past few days the banks, prompted by regulators, have made it more difficult to get an investment loan. So, you may want to get a second opinion on whether your loan approval still stands.

 

Here is what has happened

Prompted by pressure from the Australian Prudential Regulatory Authority (APRA) to limit property investment growth to 10 per cent per annum, the banks have announced new lending policies which will make it just a little tougher for investors to get a property loan.

 

All banks have announced different policies, but here are some examples of what has happened

 

 

  • Westpac only takes into account 60 per cent of rental income when assessing an some applicant’s income
  • NAB no longer discounts interest rates for investors
  • Bankwest now only lends up to 80 per cent of the value of an investment property (was 95 per cent)
  • AMP no longer accept all of rental income when assessing an applicant’s income
  • Macquarie has introduced tougher lending standards

 

 

What it Means

If you are currently looking to buy an investment property and (believe) you are armed with a bank pre-approval, it may no longer be valid.

 

What Should You Do

Contact your me immediately to double check how much you can borrow

 

Bank Manager

We May Have Had a Rate Cut, But the Screws Are Being Turned

Whenever the Reserve Bank reduces interest rates, it is always a case of good news/bad news.

 

Sure it is good news that mortgage repayments become lower. But it is also means that the economy is slowing.

 

The implications of this week’s announcements are more nuanced than ever before – some investors will be better off and some worse off. Meanwhile the outcome for others will depend on which bank they are with and their portfolio split.

 

While the Reserve Bank reduced rates by 0.25 per cent, most banks only partially passed this on to customers. So, if you are an ANZ borrower, you are probably happy because they were the only big bank to pass the rate on in full.

 

CBA only passed on 0.2 per cent of the cut. Not-so-good for borrowers, but if you are a CBA saver, you may well be better off as, at the same time, CBA correspondingly increased the interest rates on its savings accounts.

 

Some have argued that CBA increased its deposits rates to give it access to more funds which it can then on-sell to borrowers.

 

But, chances are, it is due to the Australian Prudential Regulatory Authority tightening the screws on speculative lending. Coincidentally, Westpac and NAB had their annual results in the same week, what the banks said about lending was highly relevant. According to one analyst, Westpac now has tighter criteria for loan approvals as it strives to limit its growth in investment loans to 10 per cent as APRA is recommending.

 

Similarly, at NABs results it confirmed that steps are being taken to slow growth in investor mortgage lending to meet APRA’s 10 per cent figures. NAB believes that it will achieve APRA’s guidelines by June 2015

 

So, what does all this mean for property investors?

 

If your loan application is currently considered marginal by the banks, it will increasingly be considered marginal by the banks.

 

But, if you are a blue-chip client the recent rate drop could increase how much the banks will lend you.

Looking for your first home in this crazy Sydney market?

Did you know we can organised pre-approved finance BEFORE you find your new home.

This will give you the advantage and confidence to enter negotiations and make an offer quickly, reducing the changes of your missing out on your dream home.

In a hot market like the one we are experiencing in Sydney, and particularly in the eastern suburbs, let me help you today!

 

We May Have Had a Rate Cut, But the Screws Are Being Turned

Guest post by Graeme Salt, 14 May 2015

Whenever the Reserve Bank reduces interest rates, it is always a case of good news/bad news.

Sure it is good news that mortgage repayments become lower. But it is also means that the economy is slowing.

The implications of this week’s announcements are more nuanced than ever before – some investors will be better off and some worse off. Meanwhile the outcome for others will depend on which bank they are with and their portfolio split.

While the Reserve Bank reduced rates by 0.25 per cent, most banks only partially passed this on to customers. So, if you are an ANZ borrower, you are probably happy because they were the only big bank to pass the rate on in full.

CBA only passed on 0.2 per cent of the cut. Not-so-good for borrowers, but if you are a CBA saver, you may well be better off as, at the same time, CBA correspondingly increased the interest rates on its savings accounts.

Some have argued that CBA increased its deposits rates to give it access to more funds which it can then on-sell to borrowers.

But, chances are, it is due to the Australian Prudential Regulatory Authority tightening the screws on speculative lending. Coincidentally, Westpac and NAB had their annual results in the same week, what the banks said about lending was highly relevant. According to one analyst, Westpac now has tighter criteria for loan approvals as it strives to limit its growth in investment loans to 10 per cent as APRA is recommending.

Similarly, at NABs results it confirmed that steps are being taken to slow growth in investor mortgage lending to meet APRA’s 10 per cent figures. NAB believes that it will achieve APRA’s guidelines by June 2015

So, what does all this mean for property investors?

If your loan application is currently considered marginal by the banks, it will increasingly be considered marginal by the banks.

But, if you are a blue-chip client the recent rate drop could increase how much the banks will lend you.

 

screw

Is spring the right time to buy?

Spring is widely known as the busiest time in the home buying calendar as the nicer weather draws more buyers out to property inspections, and drives more vendors to list their properties. But is spring really the best time for buying a home, or is it merely an industry myth?

It’s true that spring is often the most active time in the property market. Many real estate agents will advise sellers to hold off in listing their property over winter and wait until spring so that their properties look more attractive to buyers in the warmer weather.

For this reason, there is often an oversupply of houses over spring due to the rush of sellers suddenly flooding the market. This can sometimes work in the buyer’s favour, as the volume of sellers to buyers means there are a larger variety of homes to choose from.

However, the reverse can also be true as buyer numbers often swell in spring. The cold weather can deter buyers from shopping for a home in winter, while many prospective buyers may be planning to go on holidays for the summer months so will avoid buying a home during summer. That means that buyers are often at their most ‘serious’ during the spring season, when they have the time and inclination to adequately search for a property.

Of course, the number of buyers on the market will also be influenced by the current economic climate. In a low interest rate environment, demand for property usually increases as home loans become more affordable, while people will often put off their property investment plans when interest rates are high.

Heading into a spring property season where interest rates are at record lows, it is likely that the coming spring buying season will be quite competitive. This means it might be more difficult for buyers to negotiate a lower price for the home they want.

If you’re thinking of buying your next home soon, Choice Home Loans can help. Our experienced brokers will talk through your financial situation and goals with you, and find a loan to suit your needs. Make an appointment online to talk to one of our friendly staff today.

Steps to building a successful investment portfolio

Thanks to our strong property market and tax concessions for investors, property investment is a popular pastime in Australia, and can even provide a full-time income for some people. But how does a would-be investor get started in the property market, and ensure they make the most from their investment? Read on for Choice Home Loans’ top tips.

Hold your property for the long-term

The associated costs with purchasing and selling property – stamp duty, agents’ fees, legal costs and home loan interest charges – mean you will get more out of your property if you hold it for a number of years, rather than regularly buying and selling out of properties. In addition, property markets fluctuate in a similar way to other asset classes like shares, so if you hold for 5-10 years, it’s more likely that you will experience a complete property market cycle.

Seek out experienced professionals

Property investment can be a complicated process, particularly if you are looking at developing a portfolio of several properties over time, so you will need to enlist the help of legal and finance professionals who are skilled in this area. Accountants, lawyers and a good mortgage broker are essential to ensure you are developing a suitable structure for your investment and getting the most appropriate loan for your needs and goals.

Consider an equity home loan

Like all property purchases, you will need to put down a deposit of at least 10% of the property value to secure a loan for your investment property purchase. If you already own a home and have paid down a significant portion of your mortgage, you might want to consider accessing the equity in your home through a refinance to fund a second property purchase. If you’re a young first home buyer, you could also approach your parents to help fund your property purchase in this way.

Consider the tax implications

Although it’s unwise to buy an investment property purely for tax reasons, it’s definitely important to factor tax into your property investment strategy. For instance, capital gains tax will apply when you sell your property, while income tax will apply to any rental payments you receive from leasing it. Negative gearing also means you are able to receive a significant tax refund from the government if the costs of owning your investment property outweigh the income you receive from it.

If you’re thinking of purchasing an investment property, Choice Home Loans can help. Our network of experienced brokers can talk through your strategy and goals in detail and help you decide on a loan that meets your circumstances. Make an appointment online to talk to one of our friendly staff today.

Renting or buying – which is best for you?

When it comes to property, the decision between renting and buying is often a difficult one. While renting will often be cheaper in the short-term than paying a mortgage, the benefits of buying a home may leave you financially better off in the long run. However, you’ll need to have a deposit and some stability in your finances to get started.

Renting

Renting a home can give you more flexibility both financially and socially – for instance, if you’re young and want to go travelling, you can simply give up your lease rather than still having a mortgage to pay. It’s also usually cheaper to rent on a monthly basis than to pay a mortgage, although this will depend on where you live and what interest rates are currently being offered on the market.

The downside of renting homes rather than buying is the lack of security. You could be forced to move house if your landlord decides to sell the property, or your rent payments could increase unexpectedly. You’re also unable to make significant changes to the property without consulting your landlord, so you won’t be able to customise the property to your needs.

Buying

Buying a home gives you the security of always having a place to live, as well as an asset you can rent out for an income if you choose. Additionally, the capital value of most properties increase over time, meaning once you’ve paid off your mortgage, you will most likely have made a significant profit on your investment.

The biggest obstacle of buying a home is the deposit you need to save to get into the property market, usually at least 10% of the home value. Many first home buyers find it difficult to get a large lump sum like this together. In addition, the interest on mortgage repayments can often make them a larger monthly expense than rent, so before you make an investment into property you will want to have a comfortable, secure income.

If you’re thinking of entering the property market for the first time, Choice Home Loans can help. Our knowledgeable and experienced brokers can talk through everything you need to know about applying for a home loan, and help to find a loan to suit your needs. Make an appointment online to talk to one of our friendly staff today.

Interest rate limbo – how low can you go

Origin Finance and Chan & Naylor unite to form national brokerage

WRITTEN BY 
Nick Bendel 
http://www.theadviser.com.au/breaking-news/30881-prominent-firms-unite-to-form-national-brokerage

A new national mortgage group will use white label products as part of a strategy to offer clients a one-stop shop for finance.

The new business is called Chan & Naylor Finance and is an equal-share joint venture between brokerage Origin Finance and national accounting and wealth advisory group Chan & Naylor.

 

It will offer broking services to Chan & Naylor clients, although both joint venture partners will also continue to trade independently.

Origin director Graeme Salt told The Adviser that the joint venture would give Origin access to new clients and allow Chan & Naylor to consolidate its existing state-based finance businesses.

Chan & Naylor Finance has also revealed plans to offer branded home loans and bespoke investment loans.

Mr Salt said the home loans would be offered as a white label product through Mortgage Mart, the mortgage manager in which Origin chief executive Doug Daniell has a stake.

The bespoke investment loans will sit alongside an existing Chan & Naylor property investment trust, he added.

“The rates will be competitive, but what matters most is that the client can find everything under one roof,” Mr Salt said.

“When you have that as one seamless offering, you’re also getting accounting, wealth management, tax advice, so the customer feels they’re getting a package solution.”

Mr Salt told The Adviser that he expected Chan & Naylor Finance to eventually become large enough to support 15 or 20 brokers.

One of the things that attracted the two joint venture partners to each other was their complementary strengths, according to Mr Daniell from Origin.

“Chan & Naylor has a good geographic footprint, with 15 offices located around Australia, while Origin comprises an extensive network of brokers,” he said.

“Initially, we anticipate staffing Chan & Naylor Finance with existing Chan & Naylor personnel and Origin brokers.

“However, we will look to recruit some experienced brokers – especially those with banking or credit backgrounds – to expand into new locations and grow the existing locations.”

At Origin Finance, We Put You First

Origin Finance is one of Australia’s most respected mortgage brokers. We provide our clients with access to a large panel of lenders with an extensive range of home loan products. Many of these lenders are well-known banks, many others are household names who only lend through brokers; others still are specialist lenders who can meet diverse financial circumstances. Origin helps you make the right home or investment loan choice. Call us today 1300 30 67 67.

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