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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.

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.

 

 

Mortgage Rate Increase – Need a Break ? Contact your Broker Now!

Rates Concerning you? Call your broker to get a Rate Reduction

If you’re a homeowner with a mortgage, you know how important it is to stay on top of your payments and make sure you’re getting the best deal possible. Interest rates can play a significant role in the cost of your mortgage, and a high interest rate can end up costing you thousands of dollars over the life of your loan.

Fortunately, there’s a way to reduce the interest rate on your home loan and potentially save yourself thousands of dollars in the process. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find a better rate that suits your needs.

Why Call Your Mortgage Broker?

Mortgage brokers are licensed professionals who specialize in helping people find the best mortgage rates and loan terms for their specific needs. They work with a variety of lenders and financial institutions to find the best deals for their clients and can help you save money on your mortgage in a number of ways.

Here are a few reasons why you should call your mortgage broker to help reduce the interest rate on your home loan:

  1. They can negotiate on your behalf: Mortgage brokers have established relationships with lenders and can negotiate on your behalf to secure a lower interest rate. They know the ins and outs of the industry and can help you navigate the complex mortgage market to find the best deal for your unique situation.
  2. They have access to a wider range of lenders: Mortgage brokers work with a wide range of lenders, including banks, credit unions, and other financial institutions. This means they have access to a larger pool of mortgage products and can find you a better rate than you might be able to find on your own.
  3. They can help you refinance: If you’re already locked into a high-interest mortgage, your mortgage broker can help you refinance to a lower rate. This can save you a significant amount of money over the life of your loan and help you pay off your mortgage faster.

How to Get Started

If you’re ready to reduce the interest rate on your home loan, the first step is to call your mortgage broker. They can help you understand your options and guide you through the process of finding a better rate.

Here are a few tips to keep in mind as you get started:

  1. Gather your documentation: Your mortgage broker will need to see your current mortgage statement, credit report, and income documentation to help you find a better rate. Make sure you have all of this information on hand before you call.
  2. Be clear about your goals: Let your mortgage broker know what your goals are for reducing your interest rate. Are you looking to save money on your monthly payments, or do you want to pay off your mortgage faster? Be clear about what you’re looking to achieve so your mortgage broker can help you find the best deal.
  3. Ask questions: Don’t be afraid to ask questions or clarify anything you don’t understand. Your mortgage broker is there to help you, so make sure you’re comfortable with the process and understand your options.

Conclusion

Reducing the interest rate on your home loan can be a great way to save money and pay off your mortgage faster. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find the best deal for your unique situation.

If you’re ready to start saving money on your mortgage, call your mortgage broker today and see how they can help you reduce your interest rate.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to save your money and sanity!

Doug Daniell – CEO – Origin Finance

New Home Loan Borrowers Getting Cheaper Loans than Existing Bank Customers

New V’s Existing Borrower Rates

If you’re considering taking out a home loan, you may be wondering why new borrowers seem to be getting much cheaper loans than existing bank customers. It’s a trend that has become more pronounced in recent years, and it can be frustrating for those who have been loyal to their bank for many years. If you’re an existing borrower, call your broker now!

There are a few reasons why this is happening, and it’s important to understand them if you want to make informed decisions about your home loan.

Firstly, competition in the home loan market has increased dramatically in recent years. There are now many more lenders offering home loans than there were a decade ago, and this has driven down interest rates and fees. New borrowers are often able to take advantage of these lower rates, while existing customers may be locked into higher rates that were set when there was less competition.

Secondly, banks are increasingly using incentives to attract new customers. These incentives can include lower interest rates, fee waivers, cashback offers, and other benefits. While these incentives can be attractive to new borrowers, they may not be available to existing customers.

Thirdly, banks are more likely to offer their best rates to customers who have a strong credit history and income. New borrowers who meet these criteria may be able to secure much lower rates than existing customers who have had a change in their financial circumstances since taking out their loan.

So, what can existing bank customers do to ensure they are not paying more than they need to for their home loan? The first step is to shop around and compare rates from different lenders. Even if you are happy with your current bank, it’s worth seeing if there are better deals available.

Another option is to negotiate with your bank. If you have a good credit history and income, you may be able to negotiate a lower rate or fee waiver. It’s also worth asking your bank if they have any loyalty programs or incentives that you may be eligible for.

In summary, it can be frustrating for existing bank customers to see new borrowers getting much cheaper loans. However, it’s important to understand that this is a result of increased competition in the home loan market, and banks’ efforts to attract new customers. By shopping around and negotiating with your bank, you may be able to secure a better deal on your home loan.

To see how much you can save contact your broker or call 1300 30 67 67 or fill in the enquiry form on this page.

Doug Daniell

CEO – Origin Finance

Fixed vs. Variable Loans Which is right for you?

As mortgage brokers, one of the most common questions we receive from home loan borrowers is whether they should fix their loans, especially at the moment as rates have been steadily rising. While there is no one-size-fits-all answer to this question, there are a few factors that borrowers should consider before making a decision.

First, it’s important to understand what a fixed-rate home loan is. With a fixed-rate home loan, the interest rate remains the same for a set period of time, typically between one and five years. This means that borrowers will know exactly how much their mortgage repayments will be during this period, making it easier to budget and plan their finances.

On the other hand, a variable rate home loan has an interest rate that can change at any time, depending on market conditions and the decisions of the lender. While variable rate loans can offer more flexibility and potentially lower interest rates, they also come with the risk of higher repayments if interest rates rise.

So, should borrowers fix their home loans? Here are a few factors to consider:

  1. Interest rate trends: If interest rates are currently low and are expected to rise in the near future, fixing a home loan could be a smart move. This will protect borrowers from potential rate hikes and help them budget with certainty.
  2. Budgeting needs: If borrowers prefer to have a set repayment amount each month to make budgeting easier, a fixed-rate home loan may be the way to go. This is especially true for those who are on a tight budget or have limited income.
  3. Flexibility needs: If borrowers anticipate the need to make extra repayments or pay off their loan early, a variable rate home loan may be a better option. Fixed-rate loans often come with restrictions on extra repayments or may charge fees for early repayment.
  4. Risk tolerance: Finally, borrowers need to consider their risk tolerance. Fixed-rate loans offer stability and predictability, but they may also come with higher interest rates. Variable rate loans can be more volatile, but they may also offer lower interest rates and the potential for savings.

Ultimately, the decision to fix a home loan comes down to each borrower’s unique circumstances and preferences. As a mortgage broker, it’s important to help your clients understand the pros and cons of each option and guide them towards the loan that best meets their needs.

In conclusion, fixing a home loan can offer stability and predictability for borrowers, but it may not be the best option for everyone. It’s important to carefully consider the interest rate trends, budgeting needs, flexibility needs, and risk tolerance before making a decision. As always, working with a knowledgeable and experienced mortgage broker can help borrowers navigate the options and make an informed decision.

Please call 1300 30 6767 to discuss or fill in the form here to receive a call or book an appointment

Possible Further Australian Interest Rate Increases: What to Expect and How to Prepare

The Reserve Bank of Australia (RBA) sets monetary policy in Australia, and interest rates are a key tool they use to manage the economy. Over the past few years, interest rates in Australia have been at record lows due to the economic fallout from the COVID-19 pandemic. However, as the economy recovers and inflation heats up, there is increasing speculation that the RBA will continue raising interest rates in the coming months and years. In this article, we’ll explore what a rise in interest rates could mean for consumers and investors in Australia, and how you can prepare for it.

What causes interest rate increases in Australia?

The RBA raises interest rates to combat inflation, just like the Federal Reserve does in the United States. When the economy is overheating and prices are rising too quickly, the RBA will raise interest rates to cool things down. Conversely, when the economy is sluggish and inflation is low, the RBA will lower interest rates to stimulate growth.

Right now, inflation in Australia is running higher than the RBA’s target range of 2-3%. In response, the RBA has signaled that it may continue raising interest rates in the coming months. The timing and pace of any rate hikes will depend on a variety of factors, including economic data, inflation trends, and global events.

What could a rise in interest rates mean for consumers in Australia?

A rise in interest rates would impact consumers in Australia in several ways. First and foremost, it would make borrowing more expensive. This could mean higher interest rates on mortgages, personal loans, and credit cards. If you’re planning to take out a loan in the near future, it’s important to factor in the possibility of higher interest rates when considering your budget.

On the other hand, a rise in interest rates could be good news for savers in Australia. Banks and other financial institutions typically raise the interest rates they pay on savings accounts and term deposits in response to higher interest rates from the RBA. If you’re looking to save money, a rise in interest rates could mean better returns on your savings.

What could a rise in interest rates mean for investors in Australia?

A rise in interest rates could have a significant impact on the Australian stock market. In general, higher interest rates make stocks less attractive because they increase the cost of borrowing for companies and reduce the present value of future earnings. This could lead to a drop in stock prices, particularly in industries that rely heavily on debt financing.

On the other hand, rising interest rates could benefit certain sectors of the market, such as financials. Banks and other financial institutions tend to do well when interest rates are rising because they can charge more for loans. If you’re an investor in Australia, it’s important to consider how a rise in interest rates could impact your portfolio and adjust your strategy accordingly.

How to prepare for a rise in interest rates in Australia

If you’re concerned about a rise in interest rates in Australia, there are a few steps you can take to prepare. First, consider refinancing any existing debt to lock in a lower interest rate while you still can. This could include refinancing your mortgage or consolidating high-interest credit card debt.

Second, make sure you have a solid emergency fund in place. A rise in interest rates could make it harder to borrow money in the future, so having a cushion of savings could help you weather any unexpected expenses.

Finally, if you’re an investor in Australia, make sure your portfolio is diversified and balanced across different asset classes. This can help mitigate any potential losses from a drop in the stock market.

In conclusion, a rise in interest rates is a possibility that consumers and investors should be aware of. While it’s impossible to predict exactly when or how much rates will rise, being prepared can help you navigate any potential changes to the economy and financial markets. By keeping an eye on interest rate trends and taking proactive steps to protect your finances, you can position yourself for long-term success.

If you would like to discuss your situation, please call 1300 30 67 67 or fill in the form on this page

Doug Daniell

CEO – Origin Finance

If You Want a Low Rate, You’ll Have to Be Good

The recent changes in home lending that borrowers have experienced are tiny to what will happen in the next few years as the banks radically transform the mortgages they offer.

Until recently, the differences between lenders was not that much more different than, say, Holden v Ford.  But, some changes are afoot that will make some of us bigger winners and others bigger losers when it comes to getting a loan.

As of now, if you are PAYG, borrow $500k on a $750k property and have a clean credit history, the banks are pretty-much likely to make you a similar offer.

And even within the same bank the deal was pretty-much the same such that valuable clients were cross-subsidising less lucrative ones.

However, in an interview with the Australian Financial Review last weekend, ANZ’s CEO (Shayne Elliott) showed how the bank is identifying blue-chip clients and will be offering compelling rates to win good customers.

In future, ANZ will be using risk-based pricing; the less risky a customer you are, the lower the rate you will be offered.

One way that the banks are moving towards risk-based pricing is by the application of fintech (financial technology); increasingly sophisticated software can analyse things like your credit and employment histories and work out if you are such a good client that the bank will offer you a super-duper deal.

Of course, fintech relies on quality data – and here is where you can influence the data a bank has on you.  One way you can do this is by improving your bill-paying habits.  Until recently, your credit file primarily recorded your black marks; if you were a late-payer or were in default, this would be recorded against your credit file.

But now, the federal government is moving credit files more towards positive reporting; the prompter a bill-payer you are, the better your credit score.  Lenders will be able to see data such as how well you have been repaying your credit card, personal loan and mortgage over the past 24 months.

Positive credit scoring is used in many other countries.  In the US, there are even lenders that can have an approval for you in a couple of hours sue to a combination of fintech and positive credit scoring.

In future, all banks will offer better clients better rates.  What are you going to do to get that rate?

 

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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