Mortgage Archives

Why property is so important to us

November 11, 2024

Property may well be the biggest investment any of us make. The Australian residential property market stands at $11trn v. Superannuation at $3.9trn and listed stocks at $3.2trn.

This is why the ups-and-downs of the property are a national pastime. As the property market goes up, so does our wealth.

In fact, more than half our wealth (56.3 per cent) is held in housing. So, for many, property is a key investment for their future.

That is why, the current market creates a major opportunity for many who could be just looking to get on the property market or looking to deepen their personal wealth.

The property market has had a pretty-good run over the past years – Sydney dwelling values are 29.2 per cent higher than pre-Covid levels. But it does seem that the market is running out of steam. This week saw many auction clearance rates well below 50 per cent – a sure sign that things are moving in buyers’ favour.

And, with properties talking longer to sell, it looks like this trend is likely to continue.

But look closer and you will see that there are multiple markets; while Sydney, Canberra and Melbourne may well be struggling, Brisbane, Perth and Adelaide are going gangbusters.

So, why are our two biggest markets and what could case them to change? Traditionally Sydney, Melbourne and Canberra are our most expensive markets and there’s little doubt that potential buyers simply cannot borrow enough to purchase properties.

When banks have to assess someone’s borrowing capacity assuming a rate as high as 6.5 per cent (plus a 3 per cent buffer) – only the super-rich can justify some loans.

The good news is that rates are due to come down- it’s just that we don’t know when! NAB is predicting rate cuts from February, though it does not recognise it is unsure how many cuts will occur, nor when.

For many, this may create a window of opportunity – rate cuts are likely to spur the market on to other highs (though I do recognise that there are other factors like the return of Donald Trump and the general malaise of the Melbourne economy).

For many, property is the prime source of their wealth and 2025 could be when opportunity beckons for many if they are prepared to get into the market just as rates start to come down.

Graeme Salt is an award-winning mortgage broker. For a no-obligations consultation on your home loan, please contact him on 02 9922 5055.

What Low Deposit Loan Assistance is Available to me To Buy a Home

October 16, 2023

The Australian Home Guarantee Scheme (HGS) is a government initiative that helps eligible borrowers purchase a home with a smaller deposit. The scheme was introduced in 2019 and has been expanded several times since then.

On 1 July 2023, a number of changes to the HGS came into effect, including:

Permanent residents are now eligible. Previously, the HGS was only available to Australian citizens. However, from 1 July 2023, eligible borrowers who are Australian permanent residents will also have access to the scheme.
Joint applications are now allowed. Previously, only single applicants were eligible for the HGS. However, from 1 July 2023, two eligible individuals can now apply for the scheme together. This is a welcome change for couples and friends who are looking to buy a home together.
Previous home owners can now apply. Previously, only first home buyers were eligible for the HGS. However, from 1 July 2023, eligible borrowers who have previously owned a home can also apply for the scheme, as long as they have not owned a property in the past 10 years. This is good news for people who are looking to buy a new home after selling their previous one.

In addition to these changes, the HGS has also been expanded to include 10,000 new places for eligible single parents with at least one dependent child who have a deposit of as little as 2%.

These changes to the HGS make it more accessible to a wider range of borrowers. If you are thinking about buying a home, it is worth checking to see if you are eligible for the scheme.

Can I apply for the Home Guarantee Scheme if I have previously owned a home?

Yes, from 1 July 2023, eligible borrowers who have previously owned a home can apply for the HGS, as long as they have not owned a property in the past 10 years.

This is good news for people who are looking to buy a new home after selling their previous one, or for people who have previously owned a home but have since separated or divorced.

To be eligible for the HGS, you must also meet the following criteria:

You must be an Australian citizen or permanent resident.
You must be at least 18 years old.
You must have a deposit of at least 5% (2% for the Family Home Guarantee).
You must intend to be an owner-occupier of the purchased property.

If you are interested in applying for the HGS, you should contact a participating lender.

What are the benefits of applying for the Home Guarantee Scheme?

The main benefit of applying for the HGS is that you can purchase a home with a smaller deposit. This can make it easier and more affordable to buy a home, especially in expensive markets.

In addition, the HGS can help you to avoid paying lender’s mortgage insurance (LMI). LMI is a type of insurance that protects the lender in case you are unable to repay your loan. However, it can be expensive, so avoiding LMI can save you a significant amount of money.

How can I apply for the Home Guarantee Scheme?

To apply for the HGS, you must contact a participating lender. A participating lender is a lender that has agreed to participate in the scheme.

You can find a list of participating lenders on the National Housing Finance and Investment Corporation (NHFIC) website.

Once you have contacted a participating lender, they will be able to help you to assess your eligibility for the scheme and to apply for a loan.

Conclusion

The Australian Home Guarantee Scheme is a great way for eligible borrowers to purchase a home with a smaller deposit. The recent changes to the scheme make it more accessible to a wider range of borrowers, including permanent residents, joint applicants, and previous home owners.

If you are thinking about buying a home, it is worth checking to see if you are eligible for the HGS by contacing your Origin Finance Broker by calling 1300 30 6767 or filling 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

September 5, 2023

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.

The Benefits of Using a Mortgage Broker for Your Finance

July 29, 2023

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

Avoid a Property Disaster – Secure Pre-Approval for Your Peace of Mind

July 24, 2023

Introduction

Are you planning to invest in property or looking to buy your dream home in the near future? If so, getting your finance pre-approved should be at the top of your priority list. Pre-approval offers you the confidence and security of knowing exactly how much you can borrow from the bank. In the current market, where opportunities can arise swiftly, having pre-approval is more crucial than ever. In this article, we’ll explore the importance of pre-approval and how it can save you from potential property-related disasters.

The Power of Pre-Approval

Imagine this scenario: a fantastic investment opportunity or your dream home comes onto the market, but you are not sure how much the bank will lend you. That uncertainty can quickly turn into missed chances and disappointment. However, by arranging pre-approval with a bank, you can avoid such situations and enjoy several advantages:

Confidence in Budgeting: Pre-approval provides you with a clear idea of how much the bank is willing to lend you. This allows you to set a realistic budget and prevents you from overcommitting or missing out on a great opportunity due to hesitation.
Longer Window of Opportunity: Typically lasting for 90 days, pre-approval gives you ample time to search for the right property without worrying about changes in interest rates or borrowing conditions.
Competitive Edge: In a competitive market, sellers are more likely to consider offers from buyers who have pre-approval. It shows that you are a serious buyer with your finances in order, which can give you an edge over others who are not pre-approved.

Examples of Pre-Approval Success

Let’s take a look at some real-life scenarios where pre-approval has been a game-changer:

The Limit Buyer: A single professional with an exemplary credit history is eyeing a property at the upper limit of his borrowing capacity. With pre-approval, he gains the confidence to bid at auctions, knowing precisely how much he can spend.
The Charitable Couple: A young couple working in the For Purpose sector faces unique challenges with their salary packages. Different banks assess tax-free components differently for employees in their industry. Pre-approval ensures they find a bank that will lend them the right amount.
The Forever Home Seekers: A mature-aged couple looking for their forever home need to find a bank that appreciates their financial position and is comfortable lending to older applicants. Pre-approval helps them identify the right bank before making an offer.

Not All Banks Are Equal

It’s essential to note that not all banks have the same lending criteria. Some may not lend to individuals on job probation, for properties like lifestyle farms or small units, or to casual employees. Failing to secure pre-approval and choosing the wrong bank could leave you in a tough spot. But fear not, we’re here to help!

Conclusion

Getting your finance pre-approved is a proactive step toward securing your financial future and avoiding property-related disasters. With pre-approval, you gain the confidence and clarity needed to navigate the real estate market successfully. So, whether you’re an investor looking for profitable opportunities or a homebuyer seeking your forever abode, don’t hesitate to arrange pre-approval. For a chat about your finance and pre-approval options, feel free to contact Graeme at 02 9922 5055. Take control of your property journey and secure your peace of mind today!

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

May 12, 2023

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

May 5, 2023

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

April 8, 2023

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?

April 8, 2023

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

March 24, 2023

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.

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!

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.

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.

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.

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

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