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What to Do if You’re Hit by the Mortgage Cliff

The mortgage cliff is a situation where homeowners’ monthly mortgage payments suddenly increase significantly when their fixed-rate loan term expires. This can happen when interest rates have risen since the loan was taken out. The sudden increase in payments can put a strain on homeowners’ budgets and lead to financial hardship.

If you’re facing the mortgage cliff, there are a few things you can do to get relief:

  1. Talk to your lender. Your lender may be willing to work with you to lower your monthly payments. They may be able to offer you a lower interest rate, a longer loan term, or a payment holiday. If you are in real trouble do to an event like unemployment or sickness, you can apply for “Hardship” where you can stop or reduce payments for a period of time without it neccessarily effecting you credit report.
  2. Refinance your loan. If your lender is not willing to work with you, you may be able to refinance your loan to a lower interest rate. This can save you money on your monthly payments, but it may also involve closing costs.
  3. Make extra payments on your loan. If you can afford to, make extra payments on your loan each month. This will help you pay down your debt faster and reduce your monthly payments.
  4. Consider selling your home. If you can’t afford the higher payments, you may need to sell your home. This is a drastic step, but it may be the only way to avoid financial hardship.
What to Do if You’re Hit by the Mortgage Cliff

What to Do if You’re Hit by the Mortgage Cliff

If you’re facing the mortgage cliff, don’t panic. There are options available to help you get relief. Talk to your lender and explore all of your options.

Here are some additional tips for getting through the mortgage cliff:

  • Create a budget. This will help you track your income and expenses so you can see where your money is going.
  • Cut back on expenses. Look for ways to reduce your spending, such as eating out less or canceling unused subscriptions.
  • Get a second job. If you can, get a part-time job to bring in more income.
  • Seek financial help. There are government programs and non-profit organizations that can help homeowners who are struggling to make their mortgage payments.

The mortgage cliff can be a stressful situation, but it’s important to remember that you’re not alone. There are people who can help you get through it.

For a free assessment with your Origin Finance broker call 1300 30 67 67 or fill in the enquiry form on this page.

The Bond Market Says Your Home Loan Rates Will Fall

Normally if you are going to lock your money away for a period of time you would expect to get a higher return. Same as if you are looking for a fixed rate home loan, the longer the time frame the higher the rates should be as an offset of time and risk. The bond market is the same, long term rates should be much higher than short term rates to take into account the same dynamics.

Currently 1 to 10 year bond rates are below or at the Target Cash rate set by the Reserve Bank of Australia. The cash rate is 4.10% while the 5 year bond rate is 3.875% . Normally it should be between 0.25 and 0.75% above the rate depending on the market outlook and is actually currently 0.225% below the RBA’s target cash rate. Like wise all the medium term rates are below the target cash rate set by the RBA, for example the 1 year rate is 3.97% , 0.013% below it while the difference between 10 Year Bond rate and cash rate has dropped to zero.

This normally means that the market expects to see interest rates drop. A little in the next year and possibly more in 2 to 10 years.

Bond Market Says Home Loan Rates Will Fall

Bond Market Says Home Loan Rates Will Fall

What does this mean for you as a home owner or potential owner? It means that home loan interest rates could possibly have peaked and some relief is on the way. It can also mean increased activity and prices as historically when interest rates fall, property prices increase. This is to some extent why we have seen the increase this year in prices in metro centres as buyer are trying to “get in” before the price rise happens which has been exacerbated also by a lack of supply, especially in new home construction.

If you want to avoid the stampede that happens as rates go down, now may be a good time to think about getting your finances in order and planning your next real estate move, whether it’s your first home , an upgrade or another investment property .

For a free assessment with your Origin Finance broker call 1300 30 67 67 or fill in the enquiry form on this page.

The Benefits of Using a Mortgage Broker for Your Finance

Introduction

Buying a home is a big decision, and it’s important to get the right mortgage. A mortgage broker can help you navigate the complex world of home loans and find the best deal for your needs.

In this article, we will discuss the benefits of using a mortgage broker for your finance. We will cover topics such as:

  • What is a mortgage broker?
  • What are the benefits of using a mortgage broker?
  • How to choose a mortgage broker

What is a mortgage broker?

A mortgage broker is a licensed professional who helps people find the best mortgage for their needs. Mortgage brokers have access to a wide range of lenders, so they can shop around for the best interest rate and terms. They can also help you understand the mortgage process and make sure that you are getting the best deal possible.

What are the benefits of using a mortgage broker?

There are many benefits to using a mortgage broker, including:

  • Access to a wider range of lenders: Mortgage brokers have access to a wider range of lenders than you do as an individual. This means they can shop around for the best deal for you, and they can also compare different types of loans to find the one that best suits your needs.
  • Expertise: Mortgage brokers are experts in the mortgage market. They know the latest interest rates, lending criteria, and product features. This means they can help you find a loan that is right for you, and they can also explain the terms and conditions in plain English.
  • Saving time and money: Mortgage brokers can save you time and money by doing the legwork for you. They will shop around for the best deal, and they will also handle all the paperwork. This means you can focus on finding your dream home, and you won’t have to worry about the details of your mortgage.
  • Advocacy: Mortgage brokers are your advocate. They will work with you to find the best deal, and they will also protect your interests throughout the process. This means you can be confident that you are getting the best possible deal, and you can also be sure that your mortgage is processed smoothly.

How to choose a mortgage broker

When choosing a mortgage broker, there are a few things you should keep in mind:

  • Get recommendations: Ask your friends, family, or colleagues for recommendations for mortgage brokers. This is a great way to find a broker who you can trust.
  • Do your research: Once you have a few recommendations, do some research on the different brokers. Read online reviews, and check out their websites.
  • Interview the brokers: Once you have narrowed down your choices, interview the brokers. This will give you a chance to ask questions and get to know them.
  • Choose a broker who you feel comfortable with: The most important thing is to choose a broker who you feel comfortable with. You should feel confident that they will represent your interests and help you find the best deal.

Conclusion

Using a mortgage broker can be a great way to save time and money when buying a home. Mortgage brokers have access to a wide range of lenders, and they are experts in the mortgage market. They can help you find the best deal for your needs, and they can also protect your interests throughout the process.

If you are thinking about buying a home, I recommend that you use a mortgage broker. They can help you find the best deal, and they can also save you time and money.

To see your options, fill in the enquiry form or call Origin on 1300 30 6767

How to Get Ready to Apply for a Mortgage in Australia

 

Buying a home is a big decision, and getting a mortgage is a big part of that process. If you’re thinking about buying a home, it’s important to get ready to apply for a mortgage as early as possible. Here are some tips on how to do that:

  1. Get your finances in order. This means having a good understanding of your income and expenses, and making sure that you have a good credit score. You can get your credit score for free from a number of websites, such as MyCreditfile or Equifax.
  2. Start saving for a down payment. The more money you have saved for a down payment, the better your chances of getting approved for a mortgage and getting a lower interest rate. A good rule of thumb is to have a down payment of at least 20% of the purchase price of the home, however you can protentially borrow upto 95% of the purchase price.
  3. Shop around for a mortgage lender. There are many different mortgage lenders out there, so it’s important to shop around and compare rates and terms. You can use a mortgage calculator to help you figure out how much you can afford to borrow and how much your monthly payments will be.
  4. Get pre-approved for a mortgage. Getting pre-approved for a mortgage will give you an idea of how much you can borrow and what your monthly payments will be. This will make it easier to make an offer on a home, and it will also give you peace of mind knowing that you’re approved for a mortgage.

Once you’ve done these things, you’ll be ready to apply for a mortgage. The application process can be a bit daunting, but it’s important to be prepared. Here are some things to keep in mind when you’re applying for a mortgage:

  • Gather all of your paperwork. The lender will need to see proof of your income, your expenses, and your assets. You’ll also need to provide your credit report.
  • Be honest about your finances. The lender will be able to see all of your financial information, so it’s important to be honest about your income, your expenses, and your debt.
  • Be patient. The mortgage application process can take a few weeks or even a few months. Be patient and don’t give up.

If you follow these tips, you’ll be well on your way to getting a mortgage and buying the home of your dreams.

Additional tips:

  • Get a copy of your credit report from  major credit bureaus. This will help you identify any errors or inaccuracies that could be affecting your credit score.
  • Check your credit report for any late payments or collections. If you see anything that’s incorrect, dispute it with the credit bureau.
  • Talk to a mortgage broker. A mortgage broker can help you compare rates and terms from different lenders, and they can also help you through the application process.

If you would like to discuss your individual situation, call 1300 30 6767 or fill in the enquiry form on this page

Why now may be the time to buy – but be careful.

The property market is changing, creating opportunities for some and traps for others.Today I tried playing with Chat GPT and asked it to write my blog on the Sydney property market – and was amazed by the results!

“Now, we all know that Sydney is a fabulous place to live with its vibrant city life, beautiful beaches, and stunning harbour. And, unsurprisingly, the property market is always bustling here. So, what’s happening now?” it said as if Sydney’s streets were paved with gold.

Now, there’s no doubt that Sydney property investors have done well over the years.  But a simple request to write about today’s property market produced gushing results.

Over the years, my clients have done well where they have made wise investments rather than just following the latest fad.

But, as we start to see the property market pick-up, many are starting to rush headlong into investments that could well be too good to be true.  This week’s Australian ran an article stating “NDIS property promotions underplay the complexity of these increasingly popular investments”.

The article cautioned against gullible investors being blindsided by property spruikers.

And yet, at the same time, many economists are predicting growth in the property market – it’s just a case of choosing widely.  This week we arranged finance for a young couple Sydney who have been clients for a few years who were wise-enough to sit out all the speculation that was occurring in the property market of Covid days.

Now they have worked out that, with interest rates almost at a peak, the market may be about to lift-off – so they have taken the plunge.

But I am also hearing other stories of project marketers flogging house-and-land packages to people who are on disability benefits and who hope to have enough income by the time the property settles in 2024.  It may work out for them, but there’s a lot of risk.

There’s no doubt we are entering into a Brave New World.  But that doesn’t stop us doing our due diligence before we buy.

If you want to talk more about your property and finance needs, please contact me on 02 9922 5055.

By Graeme Salt

Australia enters a two-speed property market

By Graeme Salt

For the rest of the year Australia will have a two-speed property market.

For those with strong incomes and healthy savings, Australia is a land of opportunity with a property market starting to rise.

But for others, trapped by high interest rates, there’s limited opportunity.  For them – refinancing or buying will be tough.

According to Corelogic housing values look to have bottomed out, with Sydney now 3.0 per cent higher than the recent trough recorded in January according and CBA now predicts prices will jump 5 per cent this year.

If you’re looking to get into the market – this could be your chance.

However, at the same time, up to 880,000 existing homeowners will need to find hundreds, or even thousands, of dollars more each month when their fixed-rate periods expire this year.

According to NAB close to 40 per cent of their existing home loan customers would struggle to meet the lending criteria of a different bank.

Get ready for six months of bad news as households servicing a $550,000 mortgage will suffer an $891 increase in monthly repayments.  And someone with a $1 million mortgage would have to fork out an extra $1,620 each month.

As a result, it’s hard to envisage a really buoyant market for some time.

Until interest rates fall, or credit policies ease, house prices are unlikely to rise significantly.

But the long-term prediction for housing remains rosy. With 400, 000 arriving here from overseas this financial year alone, demand for property remains strong.

The bell has been rung for the bottom of the market – where to next?

If you want to talk to me about your lending needs, I can be contacted on 02 9922 5055 or message me here

 

 

 

How to get yourself out of mortgage prison

Refinance now to get out of Mortgage Prison
Refinance now to get out of Mortgage Prison

Think you’re the only one going through mortgage pain?  Well you’re not.

Think you have to grin and bear it?  Maybe you don’t

About 16 per cent of households with a home loan are in “mortgage prison”, unable to refinance to a lower rate because they do not meet banks’ tough serviceability assessment rules, the Reserve Bank of Australia has revealed.

The RBA’s semi-annual review of financial stability says rising interest rates mean an increasing number of existing borrowers cannot pass a bank serviceability assessment, which tests a person’s ability to cope with a three percentage point increase in interest rates.

It means hundreds of thousands of households are stuck with their existing lender and unable to directly reap the benefits of strong competition in the refinancing market, with banks offering discounted interest rates and $4,000 cashbacks.

However, this research does not consider the relief that non-bank lenders can provide to those in mortgage stress – these lenders are not legally required to apply the serviceability buffer tests.  And non-bank lenders still offer competitive rates.

Non-bank lenders cover about 10 per cent of the market and often only go through brokers.

If you want to learn more about how to get finance with non-bank lenders, contact your Origin broker.

And, if all else fails, you can still talk to your existing bank about getting them to drop their rates.  As the central bank said, about one-third of borrowers who are unable to refinance have managed to renegotiate their interest rate with their current lender.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to find out what your options may be.

Rates on Hold?

Homeowners breathed a sigh of relief this week as the Reserve Bank of Australia (RBA) opted not to raise interest rates unlike at its previous 10 months.

However, we may have to endure a bit more pain until things get easier.

The RBA has indicated that further rates rises may be on the way.  The Bank’s Governor said in a recent speech “the board expects that some further tightening of monetary policy may well be needed to return inflation to target within a reasonable timeframe.”

And the bosses of the Big Four banks have all said that further rate rises are on the way too.

The 10 consecutive increases have seen repayments on a 25-year, $500,000 loan rise $983 per month – is being taken as a sign the RBA is nearing the finish line on rates, or is already there.

But its increasingly clear that, if we have not reached the peak in interest rates, we are close to the top.

And, with inflation starting to dip, there is now talk of rate cuts being on the way.  The Australian Financial Review’s survey of 36 economists puts the first post-pandemic rate cut in play by February 2024, according to the median forecaster. A quarter of respondents predict it could even happen this year.

None of us have enjoyed these rate rises.  But the economy has coped well so-far and the worst may-well soon be over.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to find out what your options may be.

Reduce your interest rate and get up to $4000

SAVE MONEY BY REFINANCING
SAVE MONEY BY REFINANCING

Refinancing your mortgage can be a great way to save money on interest payments and potentially reduce your monthly repayments. In Australia, there are many lenders who offer competitive rates and incentives to refinance your mortgage. How can you can refinance your mortgage in Australia and get a massive interest reduction and up to $4000 refinancing payment? Read on.

  1. Shop around for the best deal

The first step to refinancing your mortgage in Australia is to shop around for the best deal. There are many lenders in Australia who offer different rates and incentives, so it’s important to compare them to find the one that suits your needs. You can use online comparison tools to compare different mortgage offers and choose the one that offers the best value or call you Origin broker to do it for you!

  1. Calculate your savings

Once you have found the lender with the best offer, it’s important to calculate your potential savings. You can use online mortgage calculators to compare your current mortgage with the new offer and see how much you could save in interest payments. It’s also important to consider any fees associated with refinancing your mortgage, such as exit fees from your current lender and application fees from the new lender.

  1. Apply for the refinancing

Once you have decided to refinance your mortgage, you can apply for the new loan with the new lender. The application process usually involves providing information about your income, employment status, and credit history. The new lender will also conduct a valuation of your property to determine its value and the amount of equity you have in it.

  1. Pay off your existing mortgage

Once your new loan is approved, you will need to pay off your existing mortgage with the funds from the new loan. This process is usually handled by the new lender and involves paying off your old loan and transferring the title of your property to the new lender.

  1. Enjoy the benefits of refinancing

Once your new loan is in place, you can start enjoying the benefits of refinancing. These benefits can include a lower interest rate, lower monthly repayments, and potentially significant savings over the life of your mortgage. Some lenders also offer cash incentives for refinancing, which can be a great way to offset any costs associated with the process.

Refinancing your mortgage in Australia can be a great way to save money on interest payments and potentially reduce your monthly repayments. By shopping around for the best deal, calculating your savings, applying for the refinancing, paying off your existing mortgage, and enjoying the benefits of refinancing, you can take advantage of the competitive mortgage market in Australia and potentially save thousands of dollars.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to see what your options can be.

Doug Daniell – CEO – Origin Finance

Is it Time for You to Refinance Your Mortgage

time to refinance your home loan
time to refinance your home loan

If you’re a homeowner in Australia, you may have heard that lenders are offering lower interest rates to new borrowers. This may leave you wondering if now is a good time to refinance your mortgage. However, it’s important to consider more than just the current interest rate when deciding whether to refinance your mortgage.

What are the advantages and disadvantages of refinancing your mortgage in Australia, and how do you decide if it’s the right move for you, even in a rising interest rate environment.

Advantages of Refinancing Your Mortgage

Lower interest rates: Refinancing your mortgage can lower your interest rate, which can save you money on your monthly mortgage payments. Even if interest rates have been rising, if you can secure a lower interest rate through refinancing, you may still be able to save money.

Access equity: If you’ve been making payments on your mortgage for a while, you may have built up some equity in your home. Refinancing your mortgage can allow you to access this equity, which you can use to fund home improvements or pay off other debts.

Consolidate debt: If you have high-interest debt, such as credit card debt, refinancing your mortgage can be a good way to consolidate this debt into one manageable payment. This can help you pay off your debt faster and save you money on interest payments.

Disadvantages of Refinancing Your Mortgage

Fees and charges: Refinancing your mortgage can come with fees and charges, such as application fees, valuation fees, and discharge fees. These fees can add up and may outweigh the benefits of refinancing.

Longer mortgage term: Refinancing your mortgage can result in a longer mortgage term, which means you’ll be paying off your mortgage for a longer period of time. This can increase the total amount of interest you pay over the life of your mortgage.

Risk of variable interest rates: If you choose a variable interest rate when refinancing your mortgage, your interest rate could go up in the future. This can increase your monthly mortgage payments and make it harder to budget.

Is Refinancing Right for You?

Whether or not refinancing your mortgage is right for you depends on your individual circumstances. If you’re considering refinancing, it’s important to consider the costs and benefits carefully. You may want to consult with a financial advisor or mortgage broker to help you make an informed decision.

If you’re looking to lower your monthly mortgage payments or access equity in your home, refinancing may be a good option for you. However, if you’re planning to sell your home in the near future or you’re already a few years into your mortgage, refinancing may not be worth the cost.

While lenders offering lower interest rates to new borrowers can be tempting, it’s important to carefully weigh the costs and benefits of refinancing your mortgage. Even if interest rates have been rising, refinancing may still be a good option if it can help you save money or achieve your financial goals. Be sure to consult with a financial professional to determine the best course of action for your specific circumstances.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to see what your options can be.

Doug Daniell – CEO – Origin Finance

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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Credit Representative (No. 397786) of
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