Tag Archive for: interest rates

You are here: / / interest rates

Posts

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.

Early Spring Selling Season Sees Dramatic Increase in Available Property to Buy in Sydney and Melbourne, Now is the Time to Get Preapproved for a Loan as Demand is Increasing to Match Activity as People Fear Missing Out on the Next Boom

The early spring selling season has gotten off to a strong start in Sydney and Melbourne, with a dramatic increase in available property to buy. This is good news for buyers, who are now spoilt for choice.

There are a number of factors that are driving the increase in available property. One factor is uncertainty about interest rates. As interest rates rise, it becomes more expensive for homeowners to borrow money, so they are more likely to sell their homes. Another factor is the pent up demand from sellers wanting to take advantage of the solid buyer demand to upgrade or down size so they are more likely to list their homes.

The increase in available property is particularly pronounced in Sydney and Melbourne. These two cities have been the most affected by the recent property market downturn. As a result, there are now more homes available for sale in Sydney and Melbourne than at any time in the past few years.

This is good news for buyers, who are now in a stronger position to negotiate a good deal. However, it is important to remember that the property market is still volatile, so it is important to get preapproved for a loan before you start making offers.

Getting preapproved for a loan will give you an idea of how much you can borrow and what your monthly payments will be. This will give you a strong bargaining position when you are making offers on properties.

It is also important to keep an eye on the interest rates. If interest rates continue to rise, it could make it more difficult for buyers to afford to buy a home. Therefore, it is important to act now if you are thinking of buying a property. If rates fall as is anticipated by the bond market, purchasers can borrow more creating more demand.

In addition to the factors mentioned above, there are a few other reasons why now is a good time to get preapproved for a loan:

  • The lending criteria are still relatively relaxed, so it is easier to get approved for a loan.
  • There are still a good number of properties available, so you have more choice.
  • The competition from other buyers is not as intense as it may be later in the year.

If you are considering buying a property in Sydney or Melbourne, I recommend getting preapproved for a loan as soon as possible. This will give you the peace of mind of knowing that you are financially ready to make an offer on a property.

Here are some additional tips for buyers in the early spring selling season:

  • Be prepared to act quickly. Properties are selling quickly, so you need to be prepared to make an offer as soon as you find a property you like.
  • Be prepared to negotiate. Sellers are more likely to negotiate if they have multiple offers on their property.
  • Get preapproved for a loan. This will give you a strong bargaining position and will make the buying process smoother.
  • Be patient. The property market is still volatile, so it may take some time to find the right property.

By following these tips, you can increase your chances of success in the early spring selling season.

However, there are also some risks to consider.

  • Interest rates are expected to continue to rise, which could make it more expensive to borrow money.
  • The property market could slow down further, making it more difficult to sell your home in the future.
  • There is a risk of overpaying for a property if you buy at the top of the market.

If you are considering buying a property, it is important to weigh the risks and rewards carefully. If you are confident that you can afford the monthly payments and that you are buying a property that you will be happy with for the long term, then now may be a good time to buy.

Ultimately, the decision of whether or not to buy a property is a personal one. There is no right or wrong answer, and the best decision for you will depend on your individual circumstances.

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

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

Spring: The Season of Property Sales in Australia – Secure Your Financing for a Stronger Negotiation

Spring is undeniably the most dynamic time for property sales in Australia. As the days become longer, the weather warms up, and nature comes alive, so does the real estate market. If you are a home buyer looking to take advantage of the bustling spring property market, now is the time to get prepared. One essential step in ensuring a smooth and successful home-buying experience is to organize your finance through a mortgage broker. In this article, we’ll delve into why spring is the peak season for property sales, and how using a mortgage broker can give you the upper hand in securing your dream home.

The Spring Property Market in Australia

Spring’s allure as the prime season for property sales in Australia is influenced by various factors:

  1. Optimal Weather: The milder weather and blooming gardens make properties look more appealing, increasing the number of buyers interested in attending open house inspections.
  2. End of Year Move: Families often wait until the last part of the year to move, reducing disruptions for children and allowing them to settle into their new home before the new academic year.
  3. Increased Inventory: Many sellers choose to list their properties during spring, leading to a surge in available homes on the market, providing buyers with a wide range of options.
  4. Motivated Sellers: Sellers who list their properties in spring are often motivated to secure a sale before the year-end, which can work in favour of buyers.

Why Organize Finance through a Mortgage Broker

  1. Expert Guidance: A mortgage broker is a licensed professional who specializes in home loans. They have access to a vast network of lenders and can provide you with expert advice on the most suitable loan options tailored to your financial situation and needs.
  2. Save Time and Effort: A mortgage broker streamlines the application process, saving you from the hassle of individually approaching multiple lenders. They handle the paperwork and negotiation, making the entire process more efficient.
  3. Access to Multiple Lenders: Unlike dealing directly with a single bank, mortgage brokers can present you with a range of options from various lenders, increasing your chances of finding a competitive loan with favourable terms.
  4. Customized Solutions: Mortgage brokers work closely with you to understand your financial goals and limitations, offering personalized solutions that align with your requirements.
  5. Pre-Approval Advantage: By organizing your finance through a mortgage broker and obtaining pre-approval for a loan, you enter the property market with a stronger position. Pre-approval demonstrates to sellers that you are a serious buyer and gives you a competitive edge in negotiations.

Some additional tips for home buyers in spring:

  1. Be realistic about your budget. The spring market can be competitive, so it’s important to be realistic about what you can afford.
  2. Be prepared to compromise. You may not be able to find the perfect property, so be prepared to compromise on some things.
  3. Don’t be afraid to negotiate. The seller is usually willing to negotiate on the price, so don’t be afraid to ask for a lower price.
  4. Be patient. It may take some time to find the right property, so be patient and don’t give up.

Conclusion

Spring is the peak season for property sales in Australia, and it offers home buyers an excellent opportunity to find their dream home. To maximize your chances of success in the competitive spring market, it’s crucial to be financially prepared. Working with a mortgage broker provides you with expert guidance, access to multiple lenders, and a stronger position through pre-approval. So, don’t wait any longer. Take action now to organize your finance and embark on your journey to finding the perfect property this spring!

Call your Origin Broker on 1300 30 6767 or fill in the enquiry form on this page.

 

 

Breaking Free from Mortgage Prison: Simplified Refinancing Process in Australia

Being trapped in a “Mortgage Prison” can be an overwhelming experience. However, if you find yourself in this situation in Australia, there is good news: refinancing your mortgage has become much simpler and more accessible than ever before. With alternative servicing calculations and lenders willing to assist, you can now escape the burden of high repayments and improve your financial position. In this article, we will explore how refinancing can help you break free from the mortgage prison and provide insights into the streamlined process.

Understanding the Mortgage Prison:

The term “Mortgage Prison” refers to a situation where homeowners find it difficult to refinance their mortgage due to various factors such as high interest rates, a low credit score, or more common, the high servicing “Buffer” lenders traditionally use. It can leave borrowers feeling stuck with their current lender and unable to explore better options to improve their financial situation.

Simplifying the Refinancing Process:

Fortunately, the refinancing landscape in Australia has evolved to provide relief for those stuck in a Mortgage Prison. Lenders now offer alternative servicing calculations . This shift in approach has opened up doors for borrowers who may have previously struggled to meet the strict traditional requirements.

Steps to Refinance:

Assess your current financial situation: Begin by evaluating your current mortgage terms, interest rate, and repayment amounts. Compare this information with what other lenders are offering to determine if refinancing would be beneficial.

Research alternative lenders: Look for lenders who offer alternative servicing calculations and take a holistic view of your financial situation. They will consider factors beyond your immediate income and expenses, giving you a better chance of securing a refinancing option.

Gather necessary documentation: Prepare the required documents, including payslips, bank statements, tax returns, and proof of assets. These documents will help lenders assess your eligibility and offer competitive rates.

Submit your application:

Approach the selected lender and submit your refinancing application. Be sure to provide accurate information and answer any additional questions they may have regarding your financial situation.

Evaluate offers: Once you receive offers from lenders, carefully compare them to identify the best option. Consider interest rates, loan terms, repayment flexibility, and any associated fees or charges.

Seek professional advice:

If you’re unsure about the process, consider consulting a mortgage broker.. They can guide you through the refinancing process, offer expert advice, and help you make an informed decision.

Benefits of Refinancing:

Refinancing your mortgage can bring several advantages, including:

Lower interest rates: By refinancing, you may secure a lower interest rate, which can significantly reduce your monthly repayments and save you money over the life of the loan.

Improved cash flow: With lower repayments, you can free up cash flow for other expenses or investments, providing more financial flexibility.

Debt consolidation: Refinancing allows you to consolidate multiple debts into a single loan, simplifying your financial management and potentially lowering your overall interest costs.

Access to equity: If you have built up equity in your property, refinancing can provide access to that equity for other purposes, such as home renovations or investment opportunities.

Conclusion:

Escaping the Mortgage Prison in Australia is now simpler and more attainable than ever before. With alternative servicing calculations and lenders taking a holistic view of borrowers’ financial situations, refinancing offers a viable solution for those struggling with high repayments. By following the steps outlined in this article and seeking professional advice when needed, you can break free from the mortgage prison and enjoy the benefits of improved financial stability. Remember, it’s essential to carefully consider your options and choose the refinancing option that best suits your needs and long-term goals.

Contact your Origin Finance Broker 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

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.

MFAA LogoOrigin Finance is a
Credit Representative (No. 397786) of
BLSSA Pty Ltd ABN 69 117 651 760,
Australian Credit License 391237