Is your devotion to your home loan provider justified?

Valentine’s Day makes us think about loyalty – which is an admirable quality in any relationship. But is your devotion to your home loan provider justified?  It’s important to ask your mortgage broker to help you review your home loan from time to time. We’re here to check the interest rate, review it’s features and make sure it’s still giving you everything you need and desire.

Here are some tell-tale signs that it may be time to part ways with your current lender and start afresh with someone new.

Your home loan is getting old

Without suggesting you go on ‘Home Loan Tinder’ and start ogling a new lender every week, we have to say the days of staying with the same one for 30 years are long gone. If you’ve had your home loan for more than two years, it could be time to review it. The home loan market is increasingly competitive and new products are being released all the time.

For example, take offset accounts. These transaction accounts are linked to your mortgage, and any money you deposit is offset against your outstanding loan balance, saving you money on interest. They just keep getting better and better, with a larger proportion of your loan available to offset.

Another popular option is a redraw facility. This allows you to make extra repayments on your mortgage and save on interest, without committing to a shorter loan term – you can access and withdraw those extra funds at any time.

The honeymoon period is long gone

When you first take out a home loan, lenders may offer you a sweetheart deal to get you in the door. It’s not uncommon for them to waive fees or discount interest rates to new customers – this kind of loan arrangement is frequently referred to as a honeymoon period or honeymoon loan. But once the honeymoon is over, the loan may revert to a more expensive or less convenient loan than you would like. If that’s the case, it’s time to look at new options.

Your lender doesn’t listen to a word you say

Nobody likes to nag. If you’re always chasing your lender about rates or ways to save, it may also be time to hit the bricks. Similarly, if you’re sick of talking to a voice recording over the phone and crave real human interaction, there may be other lenders who place greater importance on giving you the attention you deserve. If this is the case for you, ask us about our home-brand home loans, where we provide you with the after-care service ourselves.

Your needs are not being met

Maybe you’ve scored a higher paying job and want to pay down your mortgage faster. Perhaps you’re adding to your family and temporarily need to rely on one income for a time. If your needs have changed, you may find it more fulfilling to be with another home loan provider and a mortgage that marries with your current financial circumstances and goals.

Remember, there are plenty of fish in the sea!

As your mortgage broker, we can access 100s of loan products from a wide variety of lenders. We’ll also know which lenders and products are right for you, considering your personal financial circumstances and goals. Let us be your match-maker!

Don’t stay in an obsolete relationship with your lender. If you’d like to know more, or would just like a home loan health check with no obligation to switch lenders, please get in touch.

 

Smart ways to manage your Christmas Debts

Did your Christmas spending get out of hand this year? You are not alone! According to a recent news report, our 2018 Christmas spending binge is expected to leave us with a $29.7 billion credit card debt – that’s equivalent to $1,863 per credit card!

The good news is that mortgage and finance brokers don’t just organise home loans – we’re also fully qualified credit advisors. If you need help to get your debts under control, here’s some info that may help.

What is debt consolidation?

Pay day loans, credit cards, store cards and credit facilities like after-pay accounts often carry high interest rates that can eat up your income and make it difficult to pay off the debt.

Debt consolidation is a way of potentially reducing the amount of interest you pay, making your debts more manageable. Put very simply, the idea is that you take out a low-interest loan and use it to pay off all your high-interest debts, rolling everything into one loan.

What are the options?

There are a couple of ways to consolidate debt. You can:

Refinance your home loan

Refinancing your home loan could help you to access the equity in your home to pay off your debts. Basically, you take out a new home loan that is larger and you keep some of the money to pay off your debts.

Take out a personal loan

This involves using the funds from the personal loan to pay off all your other debts. This is a good option if you want to pay off your debts in a shorter time frame (which could potentially save you much more interest than refinancing your home loan).

What are the benefits of debt consolidation?

It makes debts easier to manage

Instead of having to get keep on track with multiple repayments to multiple parties, debt consolidation means you’ll only have to make one convenient repayment.

Potentially save money on interest

Different types of debt come with different interest rates. For example, credit cards usually have sky-high interest rates, as they are a form of unsecured debt. Home loans and personal loans, on the other hand, usually come with lower interest rates. That potentially means less of your money will be gobbled up by interest payments.

Repayment flexibility

Debt consolidation gives you the option to spread your loan repayments out over time, which could make personal budgeting and repaying your debt easier. You may even be able to get a loan that allows you to make extra repayments and pay off your debt sooner.

To consolidate or not to consolidate?

Using your home loan for debt consolidation purposes is not necessarily right for everyone – it all comes down to your financial situation and goals. Some people, for example, may end up paying more interest on their debt over the life of the loan (25 to 30 years), even though the home loan interest rate is lower than a credit card.

What’s more, by turning your unsecured debt into secured debt (i.e. your home loan), you could lose your home if you default on the repayments. For these reasons, it’s important to speak to a professional credit advisor before proceeding.

Are there other options?

Absolutely! If debt consolidation isn’t right for you, we may be able to suggest other ways to manage your debt – like creating a budget and repayment plan, for example.

If you’ve blown the budget this Christmas, it’s important not to panic. There are many ways to regain control of your finances, so get in touch. If you think your debt levels may affect your capacity to make your home loan repayments – don’t wait! It’s important to get things under control before you miss any repayments. Please call us today. 

How to achieve your property goals in 2019

How are your New Year Resolutions coming along? If you’re serious about achieving the goals you’ve set for yourself, creating a plan is the way to go. Of course, making a plan is easy when you’re talking about losing weight or exercising more (the world’s most popular choices for NY Resolutions every year), but achieving your property goals may take some professional support from your mortgage broker. Here’s how we can help.

NY Resolution #1: “I’m going to buy my first home in 2019!”

Buying your first home is exciting and 2019 could be the year to do it. Home values have ceased their rapid rise for the time being and home loan interest rates are still low.

Here’s how your broker can help you get on the property ladder for the first time:

• Creating a budget for your purchase and a savings plan for your deposit.

• Exploring alternative ideas for a deposit (like a guarantor’s home loan, for example).

• Providing advice about clearing debt and/ or improving your credit report to make you a more attractive prospect for lenders.

• Explaining your borrowing capacity (how much you can afford to repay and how much a lender will lend you based on your income and expenses).

• Going through any grants, concessions or other initiatives like the First Home Super Saver (FHSS) scheme to get you into your own home sooner.

• Explaining the different types of home loans and how you can use them to save money.

• Comparing the market to help you find the most suitable home loan for your needs.

• Referring you to reputable professionals such as valuators, conveyancers and solicitors, accountants etc.

• Organising pre-approval on your home loan so you know how much you can spend and save time on your property search.

• Overseeing all the loan application paperwork.

• Offering support throughout your entire home ownership journey and beyond. We can answer your questions at any time to ensure your home loan remains competitive.

NY Resolution #2: “I’m going to move into my next home in 2019!”

Upsizing, downsizing, sea-change, tree-change – whatever your motivation for moving into your next home in 2019, just ask us to help you make it happen! Even if you already know the drill for purchasing a home, it’s worth having a professional on your team when buying your next place. There’s a lot more to consider. Ask us about:

• Using the equity in your current home as a deposit for your next home.

• The costs involved.

• Bridging finance.

• Property and suburb reports to help guide your purchasing decision.

NY Resolution #3: “I’m going to invest in property in 2019!”

A goodie for 2019! We can help with:

• Working with your accountant and/or financial planner on your investment strategy.

• Structuring your loan correctly to maximise the tax effectiveness of your investment.

• Comparing the loan market to find the right loan products to meet your investment strategy.

• Getting loan pre-approval and ensuring your loan application goes smoothly.

• Crunching the numbers (for things like your anticipated rental yield or out-of-pocket costs).

• Comprehensive suburb and property reports to help you choose the right property.

• Accessing equity in your home or from another investment property to use as a deposit.

• Offering referrals to reputable property managers and other professionals.

If you have a 2019 property goal, give me a call!

A goal without a plan is just a wish, so let’s start planning and make your goals a reality this year. Please get in touch today!