Like most Australians, you have set your sights to getting an investment property as part of your long-term financial strategy. The only problem is that property is getting more and more expensive.
How do you know what to go for and how much you can afford to borrow to buy your (next) investment property?
Well, first you have to sit down and ask yourself a few serious questions:
Property prices are rising and interest rates, while unchanged in May, still hover around the very low mark. This makes the condition ideal for investors if there ever was one. Of course, the properties are skyrocketing in terms of rates but the low interest climate will help you offset the costs of purchase. The inherent idea is to look for (and this only comes with research) the best rates available.
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Reverse mortgage has come quite handy for Australian investors (especially the aged ones) as a technique of releasing equity in homes. When people keep paying their mortgage in time, they begin to own a part of their homes. The more mortgage payments, the higher the equity, and it is this particular facet of loan arrangement that is being used by the reverse mortgage principle to benefit investors and owner-occupiers.
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Banks are making cuts in variable loan rates, one-year fixed rates and three-year fixed rates, among other things, as a knee-jerk reaction to the Reserve Bank’s decision of a further 25 basis point cut. The banks are borrowing at a lesser cost in the fixed-rate market and they are more than glad to transfer the savings to the customers.
ME Bank has kind of pioneered the rate revision, what with its five-year fixed home loan rates coming down by 120 basis points, three-year rates by 56 points and one-year rate by 20 points.
You can read the original article here.
No less than 16 third-party lenders have reacted to the latest cash rate cut by the Reserve Bank. An article on The Adviser reports how CUA, Bendigo Bank and Teachers Mutual Bank have fully transferred the rate cut, cutting their interest rates by 25 basis points, too.
Some have gone on to make changes in their fixed loan rates just as well. This frenzy may give birth to- if not already given birth to- one of the strongest borrowers’ market seen in Australia.
You can read the original article here.
In an article for the website Property Update, Andrew Wilson puts into focus the rejuvenation of home loan market in capital cities in December 2014. This is a rebound from the drastic results of November 2014.
While many capital cities registered modest growth, South Australia returned figures of 4.5% and NSW topped with 6.6%. Investor activity is only going to strengthen in Sydney from here given the climate of low interest rates.
You can read the original article here.
The mortgagee or the lender holds the right to the sale of a property if the borrower does not fulfil his end of the mortgage commitment. Of course, this does not happen unless the mortgage default is severe or the borrower is in no position to pay back the debt. Such type of sale is called mortgagee sale. It is also called Foreclosure sale.
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In an article for the website Property Update, Andrew Mirams writes about the amount of security you should be ready to pledge to your lender. It is important to be in control of one’s assets but investors are often swept away by clauses and covenants and offer more than their portfolio can risk.
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An electrician might not be a great plumber and a champion architect for all his talent may not be a great opera singer, after all. All I mean is that professionals in a field know the intricacy of their particular job like on one else and sometimes their knowledge can be the difference between a worthy project and one gone wrong. Mortgage brokers are no different.
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Change in Lending Rules Not Needed For Now
In an article for the website The Adviser, Nick Bendel talks about mortgage broker heads going ballistic over the proposed introduction of the new lending rules. The Reserve bank of Australia feels that the property boom in Sydney and Melbourne warrants a change in lending rules.
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