While it’s often said you need a 20% deposit to qualify for a home loan, a significant number of borrowers are securing mortgages with smaller deposits, according to the latest data from APRA, the banking regulator.In the March 2024 quarter, 31.0% of new home loans (by value) had deposits of less than 20%, while 6.2% of new loans had deposits of less than 10%.Generally, you will need to pay lender’s mortgage insurance (LMI) if you purchase a property with a deposit of less than 15-20%. However, some lenders give LMI exemptions to certain professionals, such as doctors, dentists, physiotherapists, lawyers and accountants. While more than three in 10 borrowers are taking out loans with deposits under 20%, these figures are relatively low by historical standards. Back in December 2020, for example, 41.7% of new loans had deposits of less than 20%, while 11.3% had deposits of less than 10%.This illustrates how banks have tightened their lending standards, to ensure borrowers don’t take on an excessive amount of debt.Yet it’s still possible to buy a property with a small deposit, provided your financial circumstances allow it and you structure your loan application correctly.Talk to me about your borrowing powerHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about 31% of borrowers have less than 20% deposit
Govt wants consumers to “get a better deal” on their mortgage
The federal government has unveiled a series of reforms to the banking sector, which aim to help consumers access lower home loan rates and higher savings accounts rates.As part of the reforms, Treasury will investigate how behavioural economics could be used in the banking sector to encourage consumers to switch to cheaper home loans and banking products.Also, lenders will be required to make it easier for customers to refinance their mortgage, by ensuring they have direct and easy access to the forms needed to switch.Treasurer Jim Chalmers said these changes would “help bank customers get a better deal, including through more choice, lower prices and better services”. For consumers, that could mean:Getting alerted about lower-rate home loan optionsBeing nudged to think about refinancing to a better home loanHaving an easier, faster refinancing processThose outcomes, if they occur, would be welcome, because the essence of a broker's role is to make it easy for consumers to compare loans and, when necessary, refinance to a more suitable loan.Want to compare interest rates? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Govt wants consumers to “get a better deal” on their mortgage
High residential constraction costs contributing to supply shortages
Since late 2019, homebuilding costs have increased by nearly 40%, according to a speech by Reserve Bank assistant governor Sarah Hunter, while general inflation (referred to as headline CPI in the graph) has been less than 20%. So why have residential construction costs grown twice as fast?Ms Hunter said one reason is that building materials and labour have “risen sharply” since the pandemic. Another reason is that higher interest rates have made it more expensive for developers to fund their projects.High building costs have partly contributed to “an imbalance between new supply of housing and growth in demand,” according to Ms Hunter. She said there were several ways in which these imbalances may be resolved, including a slowdown in the growth in building costs and an increase in average household size.“But it will not be a quick fix. Demand pressure, and so upward pressure on rents and prices, will remain until new supply comes online,” she said. Here are three things to consider if you’re thinking about building a home in 2024:Begin by speaking to me, so I can calculate your borrowing capacity. This can vary significantly from lender to lender, especially as some lenders are more builder-friendly than others.Do you homework when searching for a builder – ask friends for recommendations, check online reviews and ask builders for the contact details of their most recent clients.Be conservative with your planning – projects often run overtime and over budget.Want a construction loan? Let's talk Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about High residential constraction costs contributing to supply shortages
ATO puts spotlight on property investors
The Australian Taxation Office (ATO) has warned property investors it will pay close attention to their reported income and deductions this tax time, with official data showing that about 90% of investors get their tax returns wrong.ATO assistant commissioner Rob Thomson said general repairs and maintenance on your rental property can be claimed as an immediate deduction – but expenses that are capital in nature (like immediate repairs on a property you just bought or improvements some time after purchase) are not deductible as repairs or maintenance.“We often see landlords making mistakes when it comes to repairs and maintenance deductions on rental properties, so we’re keeping a close eye on this. This year, we’re particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit,” he said.“You can claim an immediate deduction for general repairs like replacing damaged carpet or a broken window. But if you rip out an old kitchen and put in a new and improved one, this is a capital improvement and is only deductible over time as capital works.”Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about ATO puts spotlight on property investors
Housing assistance scheme achieves big milestone
Are you a first home buyer or single parent who wants help getting a property? If so, you’ll be interested to learn that the federal government’s Home Guarantee Scheme (HGS) has now supported more than 150,000 buyers since its inception in January 2020.Eligibility is limited. There are property price caps, which vary from state to state. Income caps also apply – $125,000 for individuals and a combined $200,000 for joint applicants.The HGS consists of three programs:First Home Guarantee – eligible first home buyers can purchase a property with just a 5% deposit, without having to pay lender's mortgage insurance (LMI). There are 35,000 places available this financial year.Regional First Home Buyer Guarantee – the same as above, but for regional first home buyers only, with 10,000 places this financial year.Family Home Guarantee – eligible single parents and single legal guardians can purchase a property with just a 2% deposit without paying LMI. There are 5,000 places this financial year. Of the 150,000 buyers who have used the HGS, 51% have been women and 55% have been under the age of 30, according to Housing Australia, which administers the scheme.Contact me if you’re thinking about accessing the HGS. I'll let you know if you're able to qualify for the scheme and manage your loan application if you are.Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Housing assistance scheme achieves big milestone
Variable-rate loans scale new heights of popularity
Back in March 2020, at the start of the pandemic, 13.38% of new borrowers were choosing fixed-rate loans and 86.62% were choosing variable. But in March 2024, a staggering low of only 1.40% of new loans were fixed, compared to 98.60% variable, according to the Australian Bureau of Statistics.The reason so many borrowers are going variable right now is because of a widespread belief that interest rates are at or near their peak, which means variable borrowers would benefit from any future rate cuts. Conversely, in July 2021, when interest rates were at record-low levels, 46.02% loans were fixed, while only 53.98% were variable.If you’re wondering whether fixed or variable is right for you, here are the main pros and cons of each option: Get expert help comparing fixed & variable loansHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Variable-rate loans scale new heights of popularity
Best Commercial Property Loan & Real Estate Finance Broker
Find the Best Commercial Property Loan & Real Estate Finance Broker When it comes to securing a commercial property loan or navigating the complexities of real estate finance, finding the right broker can make all the difference. A skilled commercial property loan and real estate finance broker can help you access the best loan options, negotiate favorable terms, and guide you through the process with expertise and efficiency.If you're in the market for a commercial property loan or seeking assistance with real estate finance, it's essential to partner with a broker who understands the intricacies of the industry. In this blog, we will explore the importance of finding the best commercial property loan and real estate finance broker, the key qualities to look for in a broker, and how working with the right professional can streamline your loan process and maximize your real estate investment opportunities. What is a Commercial Property Loan?A commercial property loan is a type of loan used to purchase real estate property that is intended for business or investment use. Unlike residential loans, commercial loans have different eligibility criteria, terms, and rates.Various types of properties are eligible for commercial property loans, including office buildings, retail spaces, warehouses, and more. Understanding the specific requirements for each property type is crucial when seeking financing.How to Qualify for a Commercial Property Loan Qualifying for a commercial property loan can be a complex process, but there are several key factors that lenders consider when evaluating a loan application. Here are some tips to help you qualify for a commercial property loan:Credit Score: Your credit score is a critical factor in determining your eligibility for a commercial property loan. Lenders typically look for a credit score of at least 680, although some may require a higher score. Before applying for a loan, it's a good idea to check your credit score and take steps to improve it if necessary.Debt-to-Income Ratio: Lenders also consider your debt-to-income ratio when evaluating your loan application. This is the ratio of your monthly debt payments to your monthly income. Ideally, your debt-to-income ratio should be below 43% to qualify for a commercial property loan. To improve your chances of qualifying, pay down your debts and increase your income.By understanding these key factors, you can take steps to improve your chances of qualifying for a commercial property loan.Why Work with a Commercial Mortgage Broker? Working with a commercial mortgage broker can offer numerous benefits, including access to a network of lenders, expert advice on financing options, and assistance in negotiating favorable terms.When working with a finance broker, the process typically involves assessing your financial needs, comparing loan options from various lenders, and guiding you through the … [Read more...] about Best Commercial Property Loan & Real Estate Finance Broker
Get the Best Vehicle Finance Broker for Your Car Loans
Are you in the market for a new car and looking for the best car loan to finance your purchase? Working with a car loan broker can make the process a lot smoother and help you secure the best deal on your car loan. In this article, we will discuss how to choose the right car loan broker, finding the best car loan for your new car, working with a car loan broker for used cars, the benefits of choosing a fixed rate car loan, and getting the best deal on a car loan from dealerships.How to Choose the Right Car Loan BrokerWhen selecting a car loan broker, there are several factors to consider to ensure you find the best car finance option for your needs. A reputable car loan broker will work with a network of lenders to help you secure the most competitive loan terms and loan amount. They should also offer pre-approval services to streamline the car loan application process and provide you with financial security.Some essential questions to ask a car loan broker include inquiring about their fees and charges, understanding the car loan options available to you, and discussing your repayment options. By using a car loan broker, you can save time and effort in finding the right car loan for your specific circumstances.Finding the Best Car Loan for Your New Car When purchasing a new car, it's crucial to understand the different car finance options available to you. Whether you opt for a fixed rate loan or variable rate loan, a car loan broker can help you navigate through the complexities of car finance and secure the best car loan deal.Securing pre-approval for your car loan can give you an edge when negotiating with car dealerships, as you will know the loan amount you are eligible for and can focus on finding the right car within your budget. By working with a car loan broker, you can ensure a smooth and hassle-free car buying experience. Working with a Car Loan Broker for Used CarsWhen considering purchasing a used car, exploring asset finance options can provide you with the flexibility needed to finance your purchase. A car loan broker specialising in used car finance can help you find the best financing options, tailored to your specific requirements.Repayment options for used car loans may vary, and it's essential to discuss the terms of the loan agreement with your broker. Whether you're looking for a fixed rate loan or variable rate loan, a car loan broker can assist you in finding the most suitable repayment plan for your budget. Benefits of Choosing a Fixed Rate Car Loan Opting for a fixed rate car loan offers financial security and stability, as your interest rate remains unchanged throughout the loan term. Understanding the advantages of a fixed rate car loan, such as predictable monthly repayments, can help you make informed decisions when choosing the best car finance option for your new or used car.Factors to keep in mind when selecting a fixed rate car loan include comparing … [Read more...] about Get the Best Vehicle Finance Broker for Your Car Loans