The current financial climate and uncertainty surrounding us today has created a very unique situation in Australian mortgages, which has and will change the certainty for mortgage borrowers forever, and many Australian mortgage clients don’t yet know the half of it.

Once upon a time in a perfect world, the banks would set their standard variable rates at a level playing field where borrowers had certainty that the only rate movements would occur when the RBA me on the first Tuesday of every month. They would offer discounts for the life of the loan that provided clients with the knowledge that they would always have competitive rate.

Now however, the lenders have cut their ties with the RBA, and in doing so, each other. The variation between available standard variable rates between the big 4 is up to 0.15% at the moment, and to make the effect of this worse, the discounts available between lenders is always under review, depending on who is buying market share at the time.

This causes a great deal of confusion for mortgage holders as the result of this can be variations of up to 0.4% between lenders current offers, and if you have a mortgage more than three years old, your current discounts could also be well below those available now.

Now the banks are controlling the types of clients they are seeking by the discounts they offer, effectively buying market share for certain types of loans, whether it is by loan size (which has always been the case) or more recently by lower loan to value ratios. This has created considerable opportunity for astute clients in the current market.

The ultimate consequence of this shift in mortgage rates and ideology by the banks is that borrowers will need to become more reliant on a Professional Lending Specialist for advise to ensure that they are suitably informed on products available prior to applying for a new loan or when considering refinancing their existing loan.

With the smaller second tier lenders also gaining significant market share to the big 4 over the last three months, this is also another factor to consider. Will they continue this trend by taking hold of this current “Shift” in thinking and using this to create and ongoing advantage to consumers?

Now more than ever the value proposition provided by a Professional Lending Specialist has never been higher. With recent regulation and licensing only strengthening the offering from Professional Mortgage Brokers, and access to lenders that aren’t available to the retail market, it is now more critical than ever to ensure you seek quality advice before considering a new mortgage.

Jon Colley is the Director and Professional Lending Specialist with Loan Wize – Professional Lending Solutions. He has over 16 years in the finance industry, a Bachelor of Business with Accountancy Major, and a Diploma of Financial Services (Finance / Mortgage Broking Management).

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The Original Post is Located Here: The Mortgage industry in Australia has now changed forever

Right now is a great time to buy a property as the market has undoubtedly taken a battering over the last three years, and prices have come back least five years, however I do not believe that this will stay like this for ever, and it creates a fantastic opportunity to get into the property market for the same cost as rent. With rental costs increasing by up to 6% per annum in some cities due to the lack of supply, and this trend not about to stop due to the continued undersupply of new product to the market, renting will only get more expensive over time.

This is great news for investors as well, as will improve rental yields even further. Look around www.realestate.com.au and you will easily find properties in growing areas that represent fantastic value and have incredible opportunity for rental growth due to tight supply and growing demand. It is all about location, so rule out your emotions and use your head to identify the best deals. Property cycles are varied throughout Australia, and it may not be the best time to invest in property in your own back yard, but there are plenty of good opportunities in the wider market if you are willing to spend the time and look.

So if you are a first home buyer considering whether you should jump in boots and all to home ownership, or a potential investor considering whether the timing is right to buy that perfect investment, now is a great time to talk to professional lending specialist about how much you can borrow. Or you could look back in three years time and wish you acted back in 2012! Call Jon or Tammy on 1300 LOANWIZE.

The Original Post is Located Here: High Time for Property Investment

Homeowners are in rage with this decision and 70 percent of them threat to leave their banks if there shall be any increase in the monetary policy.

72 percent of people who joined the poll sponsored by News Ltd websites said the increase will stop them from buying new homes. At the same time, 72 percent claims to be struggling to keep up with their present financial status.

People claim that the Big Four has been monopolizing the Australian market for a long time. They are voicing to encourage international banks to get involved with the Australian business competition. The four banks have done a little to the economy as they continue to gain and give back a little to the society.

Treasurer Swam encouraged people to walk down the road to get a better deal if they are unhappy with the banks’ decisions. Swan’s comment also triggered further chorus of disapproval as homeowners find it rather dim as there is no better deal “down the road”.

However, banks are still expected to wait until Friday to make announcements if there should be any changes in the cash rates.

Learn more from this article.

The Original Post is Located Here: Homeowners Outcry to Leave Major Banks

Australia’s first mortgage broker-owned home loan brand 1300 Home Loan recently launched on the Sunshine Coast, linking brokers to a 1300 number and their geographic area. 1300 Home Loan managing director John Kolenda said more than 300 brokers attended the introductory roadshows in Sydney, Melbourne, Gold Coast, Brisbane and Sunshine Coast, and more would be held across Australia before their official launch. “We are targeting 400 brokers to have registered with the new brand before we launch nationwide, most likely in the first or second quarter of 2011,” he said. Mr Kolenda said the new company had the potential to enhance the industry and provide more competition. “Consumers have been treated with disdain in the latest round of interest rate movements,” he said. ”The best way to improve the situation for consumers is to create a more competitive environment in the financial services area  and 1300 Home Loan will certainly help strengthen and invigorate that market.”

The Original Post is Located Here: 1300 Home Loans: Taking banks head on

Here are some reasons why you might like to call us this month!

1.Getting the “best deal”

Everyone advertises “the best deal”. But what they may omit to tell you about are the hidden costs, break out fees and other associated issues when changing lenders or loans. We have access to many lending institutions and will be able to guide you through your decision if you are thinking about your finance options right now. Don’t try to do it yourself. Ask us, your trusted finance consultant, to work through this with you.

2.Switching

You may not even need to change lenders to get better finance. Sometimes your current lender has brought out better products since you have taken out your loan. If they have introduced a better product they are not likely to let you know, well why would they? We, on the other hand, work for you – not the bank. So we will always make suggestions in your best interest, not theirs. It may be as simple as a product switch. We can help you with this. Call the office if you’re interested in us finding out for you.

3.Credit card / debt consolidation

This time of year usually starts us questioning how we can better manage our debt – especially credit card balances that creep up and never seem to get paid. Often consolidating loans can free up substantial cash. It is common for us to save our clients several hundreds of dollars each month just by consolidating a few credit cards and personal loans. Why not consolidate all of your debts into one loan? Call us to explore your options.

4.Top up that loan!

If you need extra cash, sometimes it’s as easy as taking some from the equity in your home. We get disappointed when we hear that our clients “just went to the bank” for that extra $25,000 when we could have helped them ourselves – and usually through more creative options. Once again, even small changes to your finance, like a “top up” or a small personal loan, can have severe consequences if all avenues are not explored and all changes discussed.

5.Invest

Property is a popular path to wealth. Australia currently faces a chronic housing shortage, which coupled with a rapidly expanding population has put upward pressure on rents. An investment plan is important to build wealth and secure your financial freedom. Call us for more information about your potential to invest. Get your loan pre-approved now before you go property shopping.

New regulation of the Australian mortgage broking industry has been designed to give consumers even more confidence in their brokers. You can now think of your broker as being even more of a professional in the same way you think of your accountant, financial planner or solicitor. Brokers build ongoing relationships with their clients and think of your best interests and not those of the bank.

The new responsible lending laws now make it a legal requirement for a mortgage broker or a lender, known as a credit provider, to suggest credit for a consumer that is ‘not unsuitable” based on their needs and their financial capacity.

We take our responsibilities seriously and would like to keep in touch with you at least annually for a review; but when lending criteria, finance options and personal circumstances change, it is wise to contact us more frequently to discuss your options in this ever changing market.

The Original Post is Located Here: Five Reasons to call your Mortgage Broker this Month

As the population in these cities continues to grow, demand for housing will also increase. However with the recent economic conditions this increase in demand has not been satisfied with an increased supply of housing, resulting in a shortage of housing stock. Falling vacancy rates and higher rents have made it more difficult and expensive to find rental accommodation.

As many astute investors are aware, we are in the midst of a severe housing shortage which encourages increasing rents. As rental yields on most properties rise, this has created the possibility of a positively geared investment property.

In addition, many economists are predicting that the property market in most capital cities is likely to start increasing in the next few years. So now is a great time to be considering your personal financial circumstances and the opportunity for an investment property as part of your wealth creation program.

Like all good investments you first need to consider the property to be purchased. As with all property investments, location is the key consideration. Generally properties located within 20kms of the CBD with good train, bus and freeway access will offer stronger returns.

Once you have researched your future property, you will then need to decide on the gearing strategy that best suits you. This will be determined by your financial circumstances, retirement strategy, the level of your deposit, equity available, surplus monthly cashflow (income less expenses) and your acceptable level of risk. These considerations will clarify whether negative gearing or positive gearing strategies are most appropriate to your situation.

Current high rental yields and low interest rates herald the return of the positively geared investment property.

So, should you have positively or negatively geared property investments?

Here’s a brief description of both gearing strategies to help you identify with the possibilities of each.

Positively geared properties are when the rental return is higher than your loan repayments and outgoings. Positive cash flow properties are self funding and are considered to be a conservative investment strategy that provides an income with exposure to the prospect of capital growth.

Bear in mind that with positive gearing there is the potential that tax will be payable on the net income (after the consideration of depreciation and other tax deductions).

Positive gearing is beneficial when an individual does not have surplus cashflow to fund income losses during the ownership period or other income to offset losses.

Negatively geared properties are when the rental return is less than your loan repayments and outgoings (placing you in an income loss position). There is however the underlying expectation that the accumulated losses will be more than offset by the capital growth on the property. In this circumstance the rental return is not considered as important in the decision process.

The key benefit associated with negative gearing is that the loss associated with the property ownership can be offset against other income earned, reducing your assessable tax income, thereby reducing your tax payable. The result is that the cost of owning the property is being funded by your tenant (in the form of rent), the tax office (in the form of tax savings) and your surplus cash flow.

Generally high tax payers choose the negatively geared investment option to maximise their tax returns and benefit from the long term capital growth potential. Investors closer to retirement or in a lower income bracket may choose positively geared investments to maximise their income potential.

Feel free to call the office and ask us to calculate the various loan to income ratios that may help you decide which gearing option is best suited to your individual circumstances. As always it is best to seek professional advice before proceeding with any investment strategy.

The Original Post is Located Here: Negative versus Positive Gearing – What makes more cents?

Money has meaning beyond the numbers on a page or notes in your wallet. It is strongly linked to our sense of security and self worth. If you and your partner argue about money you’re not alone.

So how can we improve our ‘financial communication’?

Discuss your differences
Do you spend big and hope for the best OR do you save for a rainy day? We all have our own emotional and financial security needs. In many relationships one person wants to spend the money they are earning to enjoy luxuries. However the other person may feel a constant need to save for a secure future

We learn our spending and savings patterns by watching our parents. These habits tend to stay with us throughout our adult lives. Sometimes this means we behave the same way but surprisingly some of us often take a polar opposite approach to our parents.

It can be very useful to share your observations and experience with your partner in a non judgemental way. You could perhaps start by describing the financial style of your immediate family members and who you think you are most like.

These can be tricky conversations, but if you can find a middle ground it can make a world of difference to your long term happiness.

Plan to get ahead
Ask your partner about their own personal dreams and long term goals. Looking at the bigger picture helps you decide if you are both prepared to make sacrifices to your current lifestyle to achieve long term wealth.

Budgeting is not about going without
In fact a realistic budget allows you to enjoy your own spending money style with the confidence that you are also getting ahead.

Ensure that your budget is realistic by estimating your expenses and then tracking your regular and incidental expenses for a few months.

Do you spend big and hope for the best
OR do you save for a rainy day?

One pot or two?
The decision about whether to opt for a traditional combined household fund is a big one and really depends on your personal circumstances. These days many couples keep their own accounts and contribute equally to household expenses. Others do both – a joint account and their own separate accounts.

This is a subject that requires an open discussion about your circumstances (eg if one person is earning a much higher income or there are children to support).

Protect your assets
Protecting individual assets can be very important for people who have been divorced or separated. It would be considered reasonable to discuss your concerns about combining assets and also an exit strategy if things don’t work out.

Should you have a financial controller?
Some relationships work really well with both people actively involved in the finances. However the picture we often see is that the person who has strengths in this area becomes responsible for household finances.

Because it can be a thankless task for those holding the purse strings we recommend a regular joint review of your financial situation, budget and goals.

Regardless of who is managing the finances, everyone needs their own spending money. This is especially important to help reduce the power imbalance that often exists when there is only one income earner.

The Original Post is Located Here: For Love of Money

If you are considering selling property this spring, now is an excellent time to work on improving its appeal.

Of course you don’t have to be selling your home to benefit from a good spring clean either.

Tackling outstanding jobs and adding a few modern touches to your home will also help you relax and enjoy time at home when we head into the warmer months.

With these improvements adding extra value to your home, you may benefit from a higher price when you are ready to sell. Alternatively, you can re-draw against your increased equity to purchase an investment property or use the equity for other purposes.

Below are seven suggested ways you can potentially increase the value of your home or investment property beyond its typical market appreciation – ways that both a professional valuer and buyer can appreciate.

RP Data says, unless your property is newly-constructed, most properties can benefit from ma makeover. However, be careful not to over capitalize.

Relatively simple cosmetic changes to improve presentation can make a big difference in attracting potential buyers and achieving a good selling price.

1. Fix and improve the little things

Repairing defects is essential. Unless you are selling a “renovator’s delight” to the DIY market, homes in great condition are more appealing than those which come with a “to do” list of repairs. The small things can detract from the big picture.
Clear and obvious problems such as cracks in the walls, broken windows, peeling paint and uneven plasterwork should be repaired before making other more extensive changes.
A good exterior clean of your house and paved areas with a high pressure hose can also do wonders for your street appeal.

2. The money is in the bedroom

If you have the appetite for a major renovation or extension, expert advice that you’ll get the best return on your investment if you can add a bedroom.

Speak to your local agents before making major changes to find out the home features that are most sought after in your area (eg. Multiple bedrooms, landscaped outdoor space, media room/study, polished floorboards etc).

3. Improve your kitchen and bathroom

These are very important rooms to buyers but they show wear and tear and can be more obviously dated. Modern kitchens in particular are considered to be important selling points by agents.

If a major renovation is out of the question, update the look with new cupboard handles and replace tap fittings. You can even repaint floors and wall tiles, splash backs and cupboard doors. Maximizing the amount of open bench space improves kitchen appeal. Remove appliances from view and store off site, (along with non-essential items) to free up cupboard and pantry space.

4. Landscape the garden

While this may not be essential to every property (unit for example), industry experts have noticed that a well maintained and well presented garden can lead to improved value. Even without a professional landscaping job, a little work could improve perceptions of the property and pay off. De-clutter the garden to thin out overgrown areas, remove unsightly plants and add fresh mulch and some new flowering plants to enhance your street appeal.

5. Improve lighting

Bright, warm spaces are inviting to potential buyers. Brighten dark areas with paint or additional lights and replace old fashioned light fittings (and power points) with new modern ones. These don’t have to be expensive.

6. De-clutter

If you have lived in your home for more than 10 years, hire a skip bin and throughout or give away anything you don’t use or don’t want to pack and move to your next home. Remove and store unnecessary furniture and personal items to give your home a cleaner, designer look.

7. Other improvements

Repainting rooms in neutral colors is often worthwhile. Exterior painting can really lift street appeal.

Make a great first impression with a freshly painted entrance and new front door. Interior doors and handles can also be replaced easily to refresh the look of your home.
Old or dirty blinds or curtains should be washed or replaced and new carpet considered if you can afford it.

The Original Post is Located Here: Increase value of your property

Moving on from any long term relationship, be it marriage or de facto, can attract a heavy emotional toll, but the financial impact can be far reaching and long lasting.

Finances are often left on the backburner as you focus on the emotional health of you and your family. It may also be that this is the first time you have had the sole responsibility for your finances, are overwhelmed and don’t know where to start.

The key is to take action early. Here are some steps to get back on track financially after a separation or divorce.

Check your credit rating

A vital first step is taking control of your financial future! Check to see if it contains any errors or if any of your partner’s information is listed. If so, have it rectified. There are two main credit reporting agencies, Veda Advantage and Dunn and Bradstreet.

Identify your creditors

Make a list of all your creditors, both secured and unsecured. Your secured creditors are those where an asset is used as security for the loan, eg house or car. Negotiation of both the asset and the underlying loan will be required by both parties.

Separate all joint accounts

A time consuming but crucial step is to unravel all your joint accounts, including credit cards. Even in an amicable separation it is best to separate all accounts to avoid future issues.

Create a budget

An unavoidable result of separation is a change in lifestyle. The first step to adjusting is to make a comprehensive budget separating discretionary and mandatory expenses. To make your new budget work, you may need to make some tough decisions on your discretionary spending.

Decide on your housing options

In nearly all cases the family home is either sold or refinanced. One partner will need to find somewhere new to live and, while renting may be a viable short term option, in the long term most people wish to buy a home. You will need expert advice on how to best refinance your home or how to secure a loan for a new home.

Prepare a financial plan for the future

• Start an emergency fund by opening a high interest saving account for those unexpected emergencies.
• Update your will to reflect the changes that have occurred in your life.
• Manage your debt by talking to an expert about how to reduce your ‘bad’ debts like credit cards and personal loans as quickly as possible.
• Plan for your retirement.
• Review your insurance needs.

The Original Post is Located Here: Starting Over after a Separation or Divorce

While many investors have remained on the sidelines in recent months, an increasing number are re-entering the market tentatively, recognising the strength of the market with the potential opportunities for growth and the restoration of confidence over the long term.

In the short term, the loss of homes and negative impacts of the Queensland economy have been apparent. However, the level of activity in the rebuilding process is already wielding optimism. An estimated $AUD10 billion in federal and state funding allocated to reconstructing and restoring the region, along with the important drivers of property prices (a robust resources sector, solid infrastructure, employment and population growth) will play a vital role in this reconstruction.

For all other states, the effects of the floods will be nominal. While there will be interstate population shifts to Queensland due to rebuilding work opportunities, the extent of this is uncertain. It is expected that properties in the region should see some solid growth over the medium term. The rebuilding process will create employment and population growth which will drive the demand for housing. This will ultimately set Australia up for another economic boom.

Major side effects for investors
• Burgeoning rents due to displaced homeowners needing to rent whilst homes are being rebuilt.
• Re-construction of Queensland.
• Insurance premiums to increase substantially as flood probabilities in areas change.
• Tourism markets to experience a temporary hiatus.
• Supply of new homes to be slow as town planners stall approvals.

In the short term, as uncertainty exists and the disaster is still fresh in people’s minds, there is unlikely to be any movement in prices. It is expected investor (especially interstate) activity will be subdued over the next 12 months, however, once sentiment shifts there will also be significant movement.

National outlook for 2011

The most significant change we are seeing is a decline in household sizes in Australia. This is an important driver and, as long as the population keeps increasing, the level of demand for housing will be even higher per head of population. This has important implications as to how Australians live. Medium and higher density dwellings are now more popular as this suits smaller households. In the past five years, higher density dwellings have outgrown the traditional house in Australia.

Essentially, Australia’s property market is fundamentally sound. It is being driven by a robust economy, strong levels of population growth, a pro-property tax system, and demographic shifts that are broadening the demand for housing and the shortage of new housing. As long as these fundamentals exist, there is no valid argument that can justify a significant correction in Australian housing prices.

The key leading indicators indicate that capital growth is likely to remain very subdued for the time being through Australia. However, conditions are favourable for prospective investors who are focused on rental return yields. The large stock of homes available for sale should afford potential buyers increased scope to negotiate on price to get the best possible deal.

The Original Post is Located Here: Property Outlook – Impact of Queensland Floods