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June

17 2016

Home Loan Rates Could Drop To 2% By 2017

AMP’s chief economist, Dr Shane Oliver predicts that the home loan interest rates could drop to as low as 2% as a result of three cuts to the cash rate. Although the Reserve Bank of Australia is expected to hold the official cash rate at 1.75 per cent on Tuesday, a prominent economist is predicting three more cuts – two later this year and one in 2017.

The cuts mentioned above will be witnessed primarily in the second half of 2016 and the first quarter of 2017. A 2% home loan interest rate is optimistic, according to the economist. The fall in interest rate will be driven by the cash rate being reduced to 1% if the cuts continue to occur in August, September and the Q1, 2017. Needless to say, this will lead to a massive increase in the demand for property loans and it might turn out to be a win-win situation for financial institutions as well as the property buyers and sellers.

Last week it was reported that mortgage rates below four per cent on variable or fixed terms for up to five years were possible for borrowers, according to The Australian. Before the cash rate hit 1.75 per cent in May, the lowest five-year fixed home loan rate advertised was 4.34 per cent. With proper market research, it is possible to get home loan interest rates that are close to 3%. Most people do not research enough and they end up paying more interest.

The easiest way to work your way around home loans is to use the services of a home loan specialist who knows the market and has experience in closing deals. The future of the residential property market in Australia looks lucrative, but you should not rely completely on the predicted metrics. Plan your investments and wait for the right time to make your move. This will ensure that you get the lowest home loan interest rate in the market and get your home loan approved fast.

Posted by First Stop Lending | Comments Off | in Uncategorized

June

13 2016

How to Improve Your Credit Score

Your credit score is the single most important factor that affects all types of financing and credit requirements that you might need from financial institutions. It is basically a representation of your track record of managing your finances and repaying debts. After all, lending money has its fair share of risks and lenders would like to have some form of assurance that their money is not going into the wrong hands.
Without a good credit score, you will have a face a lot of hurdles and problems while getting your home loan approved. If you want to avoid such problems, then make sure that you work on building and improving your credit score.

Limit Your Debts

If you don’t think you will be able to pay off the debt in a reasonable amount of time, then don’t take it on in the first place. Debts are good when planned and repaid properly. The longer your repayment duration, the more interest you will have to pay. This will definitely have an impact on your finances. The best way to tackle this situation is to pay more than the EMI and complete the debt as soon as possible. Credit cards have a higher interest rate than other types of loans so make sure to pay off the balance every month and don’t spend beyond your means. Also, avoid debts unless absolutely necessary. This will help you to avoid hassles.

Pay Your Bills on Time

Not paying your bills on time is one of the most common reasons credits scores are hitting the floor for so many people. Probably the most difficult thing is to keep a control on your expenses when you have credit cards at your disposal. When it comes to repayment, people usually go beyond the deadline and / or skip the monthly payment. This affects the credit score badly. If you are not able to repay the required amount, then pay AT LEAST the minimum BEFORE every due date.

Understand Your Credit Score

Do you know your credit score? Is it accurate? If you don’t understand your credit score, then it’s about time that you checked your report and took a better look at the finer details. The situation might be grimmer than you anticipate. Some of the important factors which affect your score are as follows.

Analyse the Credit System Applicable in Your Region

A credit reporting system is made up of three main players: consumers, credit bureaus and financial companies. You need to understand the system and find out the exact parameters and metrics that affect the credit score. Understanding the system will help you to use the system to your advantage by planning your finances and debts in such a way that it helps you in enhancing your score and providing you with a lucrative appeal.
The following diagram should help you to understand the relation between the important elements of the credit system.

Check and Remove Errors from the Reports
Statistics show over 80 percent of consumer’s credit reports have errors. This literally kills most credit scores. Most of the times, the errors are left in the report because they are not detected and modified accordingly. Don’t expect the authorities for you as they have thousands of reports to manage. You need to proactively check the reports and communicate errors and irregularities with supporting evidence. The sooner you clear the report of errors, the better your chances will be of getting an accurate credit score.

Posted by First Stop Lending | Comments Off | in Blog

June

07 2016

Effective Tips for Getting a Home Loan Approved

Getting a home loan approved can seem like a daunting task and most of the time it does get daunting, especially if you do not know how to go about getting it approved. From extensive paperwork to getting the costs worked out, there are a lot of steps involved in a home loan. It is not advisable to undertake this task on your own. But if you have decided to go ahead, the make sure you follow these home loan tips.

Establish a Limit and Create a Budget

Analyze your income, savings and financial position to find out how much mortgage you can afford on your home. Don’t keep false estimations. Stick to realistic limits and add a 5% buffer on that as a precaution. You would not want to run into financial problems after getting a home loan because you might lose your home and weaken your financial strength greatly. Create a carefully planned budget for at least 6 months prior to applying for a home loan.

Work on Creating a Stable Profile

No lender will prefer approving a loan to someone who has an unstable profile. Lenders like to see that your living situation is stable. You need to have a stable job and show a stable rental history. In case you are compelled to change your residence, make sure that you stick to your line of work. Heading off into a completely new work profile might seem unpredictable to the lender and your home loan could get disapproved.

Understand Your Credit Score

It is quintessential to understand your credit score because a good score can get your home loan approved faster. A good score also instills faith in the lender with respect to your financial stability. Check your score before applying for the loan. If it is not good enough, then spend some time improving the credit file and then apply for the loan. This will save you from unnecessary hassles and rejection.

Show That You Can Manage Your Life With a Home Loan

You need to show the lender that you have sufficient income and savings to live comfortably despite having to pay monthly mortgage. If you’ve got credit cards, lower your limits and if you have more than one, reduce this down to one or none. An important fact to be aware of is that for every $100 of credit limit you have, this lowers your borrowing capacity by up to $500. The less debt you have, the higher will be the chances of your home loan getting approved.

Keep Your Bank Accounts in Order

During this 6 month period, you want to ensure that your bank accounts portray the right picture to prospective lenders. Avoid late payments, keep your account from getting withdrawn, ensure that checks don’t bounce and maintain the minimum balance as stated by your bank. Also, make sure that all transactions are 100% legit with proper accountability.

Seek Help From Professional Home Loan Specialists

Professional home loan specialists can help you get relief from the stress that is usually associated with getting home loan approved. Not only do they offer you valuable advice to ensure that your home loan gets approved, but they also help you all along, be it in managing the documents or seeing the completion of a particular procedure. Get in touch with our experienced professional home loan specialists for getting your home loan approved and making your dream home a reality.

Posted by First Stop Lending | Comments Off | in Blog

May

31 2016

Are You Eligible for a First Home Buyer Grant?

If you are a first time home buyer in Australia seeking financial assistance, then a First Home Buyer Grant will help you to buy your dream home. It gives you the financial aid that helps you to make the first payment for the home and then manage the rest with the help of a home loan.
What is a First Home Buyer Grant?

The First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 to offset the effect of the GST on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation. The Scheme was established to assist first home buyers to purchase their first home by offering a $7,000 grant. Eligible first home owners can receive the grant regardless of their income or the area in which they are planning to buy or build.

The scheme allows eligible individuals to purchase a house, townhouse, apartment, unit or similar contingent on the valuation being $750,000 or less. Most importantly, the property cannot be a holiday home or an investment property. If you match the criteria, then you can enjoy the benefit of this scheme and get your first home.

Eligibility for First Home Buyer Grant

In order to get the First Home Buyer Grant, you need to meet the following eligibility criteria. The applicant needs to be a natural person above 18 years of age. Companies and Trusts are not eligible to apply for the grant.
The applicant should be an Australian citizen or a permanent resident.
New Zealanders holding a special category visa under s32 of the Migration Act 1958 and anyone holding a permanent visa under s30(1) are considered to be a permanent resident for these purposes.
At least one applicant needs to occupy the home as their principal place of residence for a continuous period of 6 months, commencing within 12 months of settlement or construction of the home.
The applicant should not have received the grant earlier.
The applicant should not have owned a home in Australia, either jointly or separately, prior to 1 July 2000,

Don’t Base Your Home Buying Decision on Grants

Some buyers choose properties due to the additional benefits of availing first home buyer grants. This may work out for some, but it is better to seek low interest rate home loans that help you to get substantial savings and you can use the amount for investment properties, holiday homes and other residential properties. If you need help with home loans, you should consult with our dedicated home loan specialists who have years of experience in the market and they are more than determined to help you get the lowest home loan interest rates in the market.

Posted by First Stop Lending | Comments Off | in Blog

May

27 2016

Investors Are Returning To The Property Market Despite Falling Home Loan Demands in Australia

The demand for home loans in Australia fell in the month of March this year. However, it was interesting to see that the value of the investor loans increased. This is a clear indication that the investors are returning to the market despite the falling home loan demands.

ABC. News reported that the data from the Bureau of Statistics showed the number of loans taken out by owner-occupiers dropped by 0.9 per cent over the month to 56,316, seasonally adjusted, although they are up by 3.8 per cent over the year. Economists had already predicted the downfall which was expected to be 1.5% in March.

The value of owner-occupier mortgages fell by 1.2%over the month to $20.7 billion on a seasonally adjusted basis. In contrast, the value of loans taken out by investors rose by 1.5% (seasonally adjusted) to just over $12 billion. This indicated a clear pull back from the 3.1% increase seen in February. All of this caused the value of the investor loans to fall down by 13% over the year.

Based on the above statistics and data, it is evident that investors are driving the demand in the market. Due to the increased competition in the market owing to increased participation of lenders, refinancing has become a popular option for those who wish to seek lower interest rates and better deals on their existing home loans.

The fall in home loan demand in March should not be considered as the overall trend in the market. If you consider the long term average value, then the position has been good enough. Even the number of home loans written in March this year was 3.8% higher than the previous year. This shows that the market is headed for a gradual but positive growth.

Based on the analysis of the available data, it is safe to say that the market will remain alive in the times to come and the growth will show a positive trend as more investors participate in the market in addition to the rise in refinancing options.

Posted by First Stop Lending | Comments Off | in Blog

May

24 2016

Home Loan Do’s and Don’ts for First Time Home Buyers

First time home buyers find it quite daunting to apply for a home loan and manage all the requirements by themselves. Investing in a home is a long term consideration involving a considerable amount of funds. Getting a home loan is the most feasible solution for most people because they might not be able to afford pay the entire value upfront. If you are thinking of applying for a home loan or if you have already applied for one, then consider the following before making your next move.

Home Loan Do’s #1 – Take the Help of Professionals at Every Step

Buying a home is not an easy task. There are several legal formalities and paperwork to be handled. It is best to take the help of home loan specialists who are well versed with home loan procedures and can get the work done without any hassles. Understand the financial and legal aspects of the loan from a home loan specialist and then proceed with the application.

Home Loan Do’s #2 – Create a Detailed Budget

Investing in a home is not just a one-time-payment affair. You need to be able to pay the EMIs without affecting your basic expenses. Create a detailed budget to understand exactly how much you can afford. This will help you to decide the best interest rate for your loan, namely, fixed interest rate and floating (variable) interest rate. Also, make sure that you identify all the costs involved in the home loan. It is important to make a list of all expenses and when you need to make the payments.

Home Loan Do’s #3 – Find the Lowest Home Loan Interest Rate

Never settle for a home loan that is offered to you. Research the market and try to find the lowest home loan interest rate. You can save a lot of money by choosing the lowest rate. If you are not able to find it yourself, then take the help of home loan specialists who can do the work for you. Remember, it is your money and you should do everything in your power to save as much as possible. A First Stop Lending broker will help you finding the best home loan rate.

Home Loan Don’ts #1 – Avoid Emotional Attachments

When you decide to invest in a property, you should not let your emotions influence your decisions. There is a good chance that you will end up getting the wrong deal if you let your emotions dictate your decisions. Conduct a thorough research, consult with experts, and make an informed decision that is based on hard facts and reliable data.

Home Loan Don’ts #2 – Don’t Perform Renovations / Repairs On Your Own

If you don’t have the skills to perform a professional renovation, then don’t even think about attempting it. You might end up damaging the property or reducing its value. Investing in maintenance and repairs is not only moneywise; it could be crucial to a future sale. If you are on a tight budget, then focus on the most important repairs first and then target the other areas one by one.

Home Loan Don’ts #3 – Don’t Be Hasty

Searching for your first home is an exhilarating experience, and it’s easy to get caught up in the excitement of it all. If you make any offer or accept any offer, then it is a legally binding contract and the implications of withdrawing your interest or violating the terms could put you in a difficult position. Never be hasty in taking such decisions ever.

Posted by First Stop Lending | Comments Off | in Blog

March

02 2014

Paying your loan off faster.

To understand how to pay your loan off faster, you need to know how a loan works. A simple explanation is as follows

A borrower borrows $500,000 at an interest rate of 5.5% per annum for 25 years. The ‘principal’ is the amount you borrowed. The ‘interest’ is the amount you are charged for borrowing the money. The ‘loan term’ is how long the loan contract is for.

On almost all home mortgages, interest is calculated daily, but added to the loan balance at the end of the month. Loan repayments are either ‘interest only’ (IO), or ‘principal and interest’ (P&I).

Most home mortgages in Australia are by default ‘principal and interest’. P&I loans mean that the repayment is calculated to repay the loan in full by the end of the loan term. The P&I repayment is made up of two portions, one being the ‘interest’ charged for the month, and the other portion being an amount which pays back the ‘principal’. By the end of the ‘loan term’, the principal is paid off completely.

If you choose ‘interest only’ repayments, your repayment will match exactly the interest you have been charged, and there is no amount being repaid on the ‘principal’ That means that unless you sell the house or switch to a P&I loan, you’ll never get rid of the mortgage and you’ll be paying interest forever.

You should always choose to repay by ‘principal and interest’ rather than ‘interest only’, unless your accountant advises otherwise.

They key in repaying your loan faster is to reduce the ‘principal’ as fast as you can by making ‘extra payments’. These are payments above the set minimum repayments.

Every extra dollar you put into your loan should save you around $2 over the term or the loan. If you struggle to make regular ‘extra payments’, even a one-off lump sum deposit, such as a tax refund, can have a positive effect. A lump sum payment of, say, $1500 in the third year of a $200,000 home loan at 7.5% could cut your loan by five months and save you more than $6,000 in interest.

Another simple strategy is to pay say $100 extra per month. It is a simple strategy that can save you thousands. On a $400,000 loan over 30 years at an average interest rate of 5.5% pa you will reduce interest payments by almost $48,326, they will cut the term by 2 years and 11 months!!

Posted by Peter Butler | Comments Off | in Blog, Refinancing

March

18 2013

Welcome to our new website!

Have a browse and send us your comments to info@fslending.com.au.

Posted by First Stop Lending | Comments Off | in News