Mortgage Loan

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.

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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.

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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.

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