The Ins and Outs of Conditional Approval There are plenty of people out there that dive in at the deep end, find a property that they’d like to buy without any consideration for their financial potential and then end up getting rejected for a mortgage. And then there are those that prefer to do things a little more intuitively; by applying for what most inside experts refer to as conditional approval. With it, you’ll have a much clearer idea of what you can borrow from a lender – or more importantly, how much you can afford to repay. And without it, you could be going into the property purchasing process near-blind. Sure, a mortgage calculator can give you an idea of your borrowing potential; especially if you take advantage of their features to get a rough idea of your financial capabilities, but there’s nothing quite as reassuring as knowing that once you’re ready to buy, your lender is 1 step closer to full approval. Is it a guarantee? The clue is in the name really. Conditional approval is technically approval; as long as your lender’s conditions are met. Provided the conditions are met, it is like being given the go… [Read More]
The Ultimate Introduction to Mortgage Brokers
Your Ultimate Introduction to Mortgage Brokers Mortgage brokers, home loan agents and interest rate comparison experts are typically all one and the same. In most cases, they act as somewhat of a ‘middle-man’ between you (as a borrower) and the lender. They collate information, compare interest rates and perform application-related tasks to help their clients secure the right type of loan for their needs. Do mortgage brokers charge? Yes and no. Yes, if they work independently and outside of the commission-based protocols offered by banks. No, if they work with specific lenders that pay them commission each time they bring a new borrower on board. What is a mortgage broker job description? In a nutshell, there are two specific descriptions for these types of home loan specialists. The first relates to independent brokers that offer mortgage comparison services at a cost. The second relates to commission-based agents that charge the bank a percentage of your loan if you sign up to a fresh mortgage. Roughly 35% of all new mortgages were handled by brokers in 2008 alone. What are independent mortgage brokers exactly? Generally speaking, an independent agent is anyone that works outside of the rules and regulations of an… [Read More]
How Frequently Do Interest Rates Change?
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]
What Grants Are Available to First Home Buyers in Victoria?
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]
The Who’s Who in the Zoo
Whether you are a first home buyer or experienced investor, buying a property can be an exciting by daunting experience. It is therefore important to understand who’s who in the zoo and ensure that you have a network of people to help support you through the process. Real Estate Agent Does the thought of meeting a real estate agent make you think of a used car salesman? Things have changed a little, but unless it is a private vendor, you will inevitably have meet and liaise with a real estate agent when viewing and buying a property. The key is to understand that they are working on behalf of the vendor not you. They will also handle the sale and negotiation of the property to buyers. Conveyancer A conveyancer plays an important role in the purchase of a property. They handle the legal side of the property transfer. If you are in the market to purchase a property, they can review the properties Section 32 to ensure there are no obvious concerns. Once an offer has been accepted, they will prepare the legal documentation involved in the change of ownership. Many conveyancers are also solicitors and can then also provide… [Read More]
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