A bridging loan, also known as a relocation loan, is a home loan that can be taken out to purchase a new property while waiting to sell or settle on your current home. This means that during the bridging period, the time where you are waiting to settle on your current home, you will have the equivalent total of two loans. Bridging in a nutshell: Short term loan of 6 to 12 months Approval for bridging depends on the lender, the property type and the ability to service (pay the loan). Some lenders require you to be able to service the loan based on the peak debt. The peak debt is when you have both your  loan for your current home and loan for your new home. Lenders mortgage insurance is not usually available The maximum loan to value ratio is dependent on the lender. Repayment options during the bridging time is also lender dependent. Some will have an interest only repayment during the bridging period. Eligibility for bridging loan: Outside of normal servicing and lending requirements, you will need to have A valuation performed on your existing property Contract of sale for your new property. During bridging period/peak debt: If your current… [Read More]

The Victorian Government, as with other states and territories in Australia had developed a number of initiatives to help people purchase their first home. Each state has a slightly different incentive, however in Victoria, when purchasing/building a new home you may be eligible for a First Home Owner grant (FHOG): Buying or building a new home to the value of $750,000 Regional Victoria: grant of $20,000 Metro Melbourne: grant of $10,000 If you a buying a new or established home, you may also be eligible for the First Home Buyer (FHB) Duty Exemption One off duty exemption if principle place of residence (PPR) valued to $600,000 or a Concessional duty for PPR valued between $600,001 to $750,000  Example of FHB Duty Concession Property Value Normal Duty Duty after Concession $605,000 $31,370 $1046 $625,000 $32,570 $5428 $650,000 $34,070 $11,357 $675,000 $35,570 $17,785 $700,000 $37,070 $24,713 $725,000 $38,570 $32,142 $745,000 $39,770 $38,444   To be eligible for FHOG Your new home can be a house, townhouse, apartment, unit or similar, but it must be valued at $750,000 or less and be the first sale of the property as a residential premise. You’re not eligible for the FHOG if you or your spouse/partner… [Read More]

As a home owner, you will undoubtedly be doing everything in your power to ensure that you have the finances to cover the cost of your mortgage. What you might not know is that it’s been estimated that in Australia, ‘up to 1 million Australian households could be in danger of missing mortgage repayments by September’1 – not to mention facing strikes against their credit score. Repossessions can occur for any number of reasons; from losing a job, all the way to taking a financial hit to your income. Regardless of what can lead to them – there’s nothing quite as terrifying for a family, especially if they have small children. Decades ago, the Australian Government introduced several pieces of legislation to ensure that if a lender plans on repossessing a home; they must follow a particular set of guidelines. The Early Signs of Repossession One of the first things that a lender will do is to be open and approachable when it comes to helping a home owner. There are a number of steps that will be taken prior to repossession of your home. If they can help you to get on top of your arrears, then there may… [Read More]

If you’re currently in the process of applying for a mortgage, you’ve undoubtedly come face to face with the concept of interest rates. These additional fees are what banks rely on to provide them with a return on their investment. In 1990 the percentage was at a whopping 17.5% – the highest amount to have hit Australian banks in history. There are a dozen of factors that can affect the way in which rates rise and fall; from the current state of the economy, to investments from third parties and external sources. But just how often do they change and is there a way to predict whether they will increase, or decrease? Financial experts and their views on rates For years now, financial advisors and mortgage brokers have been studying the rate market in an effort to learn how they can climb and drop. Over the years, many have learnt how to recognise the subtle signs that are often followed by a change in rates – and this is why we always advise our clients to obtain as much information as possible before agreeing to terms. So, how frequently can you expect these rates to change? Well, it all comes… [Read More]