Posts Tagged mortgage broker.

Why Use a Mortgage Broker

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When I meet people and tell them I am a mortgage broker and explain I arrange loans for my clients they often say Why Use a Mortgage Broker and not go directly to a bank.

Here a few reason why you should be using me Kim Wight as your mortgage broker.

Expertise
As your mortgage broker I need to be up-to-speed with lenders’ ever-changing policies – not only where to find the best deals but which lender will accommodate your unique personal circumstances.

Package your loan application
Lenders are getting more selective about the level of risk to which they’ll expose themselves, so they’re looking for borrowers with genuine savings who can show discipline with their finances.

Lenders will scrutinise a borrower’s credit history with even a seemingly insignificant late phone or credit card bill repayments potentially jeopardising a loan application.

As your mortgage broker I will package your loan application to make sure you’re presented to lenders in the best possible light.

Get organised
Being disorganised in your finances could lead to a loan application being declined. If a lender needs more information during the loan application process, it’s important to respond to this immediately, otherwise the momentum can be lost. It can take time to get your loan application back on track. This is especially the case when refinancing or topping up a loan.

As your mortgage broker I will work with you to pull together all the paperwork needed to support your loan application.

Finding opportunities to save
Opportunities to save money can come from anywhere.

There may be greater flexibility for customers who already do business with a particular lender – even if you only have something as simple as a credit card or transaction account.

Also, because  as your mortgage broker  I have great relationships with the lenders, depending on a range of factors  I  may be able to negotiate a significant reduction on the interest rate, the waiving or reduction of fees, or some flexibility on the amount that can be borrowed.

 No Charge for My Service

Yes that is right I do not charge you to arrange your loan and work with your solicitor or conveyancer to get the loan to settlement. I am paid a commission from whichever lender you decide to use.  My team and I take all the stress out of getting a loan.

How can I, Kim Wight Mortgage Broker Sydney help you?
Call me on 0412167551 to chat about your situation and find out what options are available to you. 

Posted in: Blog, First Home Buyers, Latest Mortgage News, Mortgage Broker Sydney

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HOW CAN I GET A HOME LOAN WHEN I AM SELF EMPLOYED ?

 

How can I get a home loan when I am self employedMany  new clients ask me  ”How can I get a home loan when I am self employed?”  

As a self employed person you may find getting a home loan difficult as you tend to be caught up in two different dilemmas.

By this I mean you and your accountant try to minimize your taxable income by claiming every possible expense within your business, but in order to borrow money you need to be able to show the lender the maximum amount of disposable income available to cover future loan repayments.

While your accountant does this fantastic job of legally minimizing your taxable income, which is what you  employ them to do, your borrowing capacity is then reduced as the lenders base their decision solely on your taxable income.

I have to tell you a hard fact of life – “you can’t have it both ways” and you need to understand the borrowing process and have a strategy to achieve your financial goals.

Plan Ahead

If you are self employed and looking to get a home loan you need to plan ahead. While the method of getting a loan is the same for both self employed and PAYG borrowers the real difference is how the lenders will assess your income.

For a PAYG borrower they only need to provide payslips for a lender to verify their income but much more is required for a self employed borrower.

Most lenders will require your last two year tax returns for both the business and your personal income. By looking at the last two year’s returns they will average the income over that two year period. This will mean that if in the first year you were showing little income or perhaps even a loss and  then if you showed good income in the second year by averaging the two year’s your income your for borrowing potential will be reduced.
Example

2014 taxable income  $25,000     2015 taxable income $60,000

Total for two years $85,000
divided by 2 = assessable income of $42,500

If you are planning on buying a home you need to speak with your accountant and tell them  and together with them and your finance broker a plan can be developed to have the maximum amount of taxable income declared to allow you to borrow the maximum amount of funds required.

Full Documentation Loans – Full Doc

By providing your tax years and financial statements when applying for a home loan while you might have paid more tax than you may have liked but you are saving $’000 long term as you will qualify for up to 95% of the purchase price of a property and also have access to any of the great discounted interest rates in the market place.

With full doc loans lenders will also allow for certain expense deductions to be added back to your income and increase your borrowing potential. These “add backs” can include depreciation, directors salaries, extra superannuation payments and one off capital expenses.

Low Documentation Loans – Low Doc

Before the GFC these loan were extremely popular with self employed clients as you could borrow up to 80 % of the property value and you did not need to provide any tax returns or financial statements. You simply made a declaration of your income and in the majority of cases you were offered discounted interest rates in line with PAYG clients.

Those days have gone!

Now if you are unable to provide tax returns you can still borrow up to 80% of the property value but you need to provide, in most cases, your BAS and trading statements to verify income. You also need to have held an ABN for a minimum of two years and be registered for GST if declaring an income above $75,000pa.

The Need for Bricks & Mortar

As a business person you may be thinking that you do not want to buy property but want to borrow for investment in your business. The fact is lenders want security for any money they lend you and they want bricks and mortar. Whether you have residential or commercial property you will be in the best position to borrow money if you have equity in real estate.

If you require a loan for business purposes some lenders will give you a loan on residential interest rates rather than commercial interest rates and over a longer term which may help with cash flow if you can offer them the security of a residential property.

Get Professional Advice

Researching all the various lenders  policies can be a minefield as some only want the latest year’s figures for a full documentation loan which may be better for you , some will accept an accountant’s letter for a 60% low documentation loan and the list goes on and on.

If you are thinking about getting a home loan I suggest you contact me and together we can navigate the various lenders rules and policies for your benefit

I have access to 25  different lenders and have the experience to advise you not only on interest rates and fees but also the various lender’s policies that might make the difference between you getting a loan or not.

I hope you have found this information useful and if you have any questions please contact me Kim Wight Mortgage Broker Sydney on 0412 167 551 or at kwight@smartline.com.au.

Posted in: Blog, Latest Mortgage News, Mortgage Broker Sydney

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WORST MORTGAGE ADVICE

 Worst Mortgage Advice Ever That  Made Me Scream

Mortgage Broker Sydney

A potential new client contacted me yesterday and told me she wanted to refinance and asked me to look at her loan options.  She then sent me all the paperwork required to apply for a loan.

This morning I analysed the information and sent   details of five different lenders, their interest rates, fees and product details to her and then rang to discuss.

She became very apologetic and said her friend had told her to apply at ”lots of places” which she did last week and had just got an approval from her current  bank. This bank was one of the 5 I had recommended.  It was not the lowest interest rate available to her.  She also said her friend had a mortgage broker who advised “not to put all your eggs in one basket” and apply at multiple lenders.

The advice she was given of applying at lots of banks is the worst thing anyone can do.

Every time you “apply” for finance it is recorded on your credit report. Too many enquiries flags warning signs to the lenders and can be enough for the internal lenders computer system to automatically decline your loan.

The reason you use a mortgage broker in the first place is to be able to look at all your loan options in one place. Each lender has a different criteria for working out how much you can borrow.  I, as your mortgage broker, can tell you who you qualify with, the interest rates and product details. I give you your top 5 choices based on what you want from a loan. There is no risk of applying with five lenders only to find out the five you applied for will not give you a loan.

Was I annoyed with this person for wasting my time?  Yes I was as I had started at 5.30am this morning to be able to provide service to other clients who were asking me to do things for them.

But I was really annoyed with the misinformation given by a friend who clearly does not understand the lending system could have put this person at financial risk.

To top it all off I was alarmed that a mortgage broker had given the worst advice possible to someone by saying to apply at multiple lenders.  This not only puts the client at risk but also damages my industry which I cannot tolerate.

I am very proud of my professionalism and will always have the client’s best interest at heart even if it means sometimes I cannot help if it is not right to do so..

If you want to look at your loan options with no risk please contact me Kim Wight Mortgage Broker Sydney on 0412 167 551 or email kwight@smartline.com.au.

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House Prices In Sydney

Everyone is talking about House Prices in Sydney and I encourage everyone that owns a home in Sydney to have a quick look at this “Domain” calculator.

This is a bit of fun and a pretty good way to quantify the wealth that house price increases are creating.

I have used Concord as an example and the median (or middle) house has increased in value by $464 per day over the last 12 months.

Click this link to see how your suburb has fared.

http://m.news.domain.com.au/domain/real-estate-news/the-sydney-boomometer-does-your-house-earn-more-than-you-20150324-1m5h4g.html#interactive

Mortgage Broker Sydney

House Prices in Sydney

 

Don’t forget, these price rises are often creating more equity. Borrowers with more equity are often eligible for greater interest rate discounts.

Give me a call, Kim Wight Mortgage Broker Sydney,  to see if this applies to you.

Posted in: Blog, First Home Buyers, Latest Mortgage News, Mortgage Broker Sydney

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Credit Cards Or Personal Loan Debts

Do you have credit cards or personal loan debts that stubbornly refuse to go away? I  may have a solution.

Whilst a minimum monthly credit card repayment of 3% seems quite easy to handle at first glance, a $30,000 debt will require a $900 per month payment. A significant commitment.

Compare this with a current $30,000 home loan and the minimum repayment would be approximately $157 per month (see below).

Credit cards or personal loan debts

Given the right set of circumstances, I  can sometimes alleviate this type of cash flow burden by consolidating credit cards and personal loans into a residentially secured loan.

However, if this option is not possible or desirable, there is one very effective long term solution.

“Cut it up and pay it off.”

“Cut it up” – This part of the solution is often seen as too difficult because shopping with a credit card is so convenient, however, the credit card organisations such as Visa and MasterCard now offer debit card facilities which give people all of the efficiencies of using a credit card without the temptation of using the credit.

“Pay it off”– This part of the solution can be made easier too. Most credit card providers have a direct debit system that will allow customers to make automatic fixed repayments (similar to a personal loan) on their credit card.

I believe that long term debt should only be used for buying assets that have a reasonable chance of appreciating. Holidays, cars, LCD screens and boats generally head the other way and should only be financed over a shorter term. There is nothing worse than a big debt with nothing to show for it.

This is a sensitive issue to bring up with people but if you know of anyone that would like to talk to me, Kim Wight Mortgage Broker Sydney  about getting their credit cards or personal loans in order, I would be more than happy to assist with some confidential and useful advice.  

 

 

Posted in: Bad Credit History, Blog, First Home Buyers, Latest Mortgage News, Mortgage Broker Sydney

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Just How Low Our Current Interest Rates Are.

I  thought you might appreciate a quick perspective on just how low our current interest rates are.   

mortgage broker Sydney

The ASX Futures market has also predicted another 0.25% p.a. cut to the RBA cash rate in May. This could bring your variable interest rate to the very low 4% range

Mortgage Broker Sydney

Let’s put this into perspective.

A $1,000,000 interest only home loan would cost $865 per week @ 4.50% p.a..

If we looked at the 15 year average for variable home loan rates in Australia, approx. 6.90% p.a., the interest only repayments on this $1,000,000 loan would be $1,326 per week.

The difference between 4.50% p.a. and 6.90% p.a. represents a saving of $461 per week.

Given this situation, are you surprised that many property prices are going up?

If you would like to discuss any of the above information, please give me a call.

There are plenty of home loan savings to be enjoyed in this market. Contact me Kim Wight Mortgage Broker Sydney  if you want to look at your home loan  options.

 

 

 

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Australian Housing Market

We have long speculated that the cost of Australian housing market has been increasing due to a lack of supply. The damaging impact of this supply shortfall is further boosted by strong population growth. Demand for housing is growing at a far greater rate than supply. A range of Government regulatory demands, especially in capital cities, have steadily driven up the price of our most fundamental need, shelter.

Alan Moran from the Australian Financial Review recently wrote about this very subject and speculated as to why our housing supply is not keeping up with demand. We have included some of his key points from that article below.

“Out of 86 cities across the world with over a million people house prices relative to incomes in Sydney and Melbourne were the third and sixth most expensive.  That’s the findings of the latest annual survey of house prices released this week by Demographia.

Australia’s regulatory induced scarcity of land increases the cost of a fully serviced housing block complete with telecom, water, energy and road infrastructure from less than $100,000 to $300,000 or $400,000.  And on top of this there are special taxes on development – at least $36,000 per block in the case of Sydney.

Back in 1983, according to data from the Housing Industry Association, the land component cost of a new house on a standard sized block comprised 40 per cent of the total house/land package in Sydney and 30 per cent in Melbourne.  This year the land component cost in the two cities was 72 per cent and 70 per cent respectively.  The same pattern is seen throughout Australia since planning authorities have adopted similar restraints on land availability.

Unlike elsewhere, Australian house price rises barely paused in the recession. This chart by Demographia sums up the affordability situation around Australia.

Mortgage Broker Sydney

 

The Financial System Inquiry Chaired by David Murray suggested that negative gearing and the capital gains tax regime were a cause of Australia’s price increases. But negative gearing opportunities for investors in housing have always been with us and many other countries have similar tax laws. In any event, a ready antidote to demand-induced housing price increases is to permit more land to be used for this activity.

The people disadvantaged by unaffordability of housing are those who have not bought a house. In Australia, young people are the most vulnerable to the high prices, and are showing a much increased interest in owning their own place.

Mission Australia conducts an annual survey of youth which offers insights into young people’s aspirations and concerns.  The past four years have seen marked changes in attitudes. In the 2014 survey 72 per cent of young people think it important to own their own home and a similar number expected to be able to do so.  However, home ownership by younger people is declining.  Amongst 25 to 34 year-olds those owning their home has fallen from 56 per cent in 1991 to 47 per cent in 2011.

Here comes the bottom line….

“It is regulatory scarcity that has driven Australian house prices to stratospheric levels of unaffordability.  And smashing the constraints is the only means to bringing house prices within range of younger people’s incomes.”

Existing and prospective property owners need to ask and answer the following question. Are any of our governments likely to reduce their supply stalling regulations? We suspect not.

As always if you have any questions regarding the above or are looking to arrange finance for property purchases please contact me Kim Wight, Mortgage Broker Sydney. 

 

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Our Annual RBA Form Guide

The RBA’s cash rate decision is always handed down at 2.30pm on the first Tuesday of each month. This means the November cash rate decision always occurs half an hour before the big race.

Every year for the last five years I  have sent you our annual RBA form guide for the RBA’s November decision. This year is no exception. Enjoy.

Centrebet

Very short odds for no change.

Mortgage Broker SydneyThe ASX Futures Market

As you can see, the ASX futures market is not predicting any change to the status quo for the next 18 months.

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Westpac, CBA and NAB

A slight increase by the end of next year.

Mortgage Brokler Sydney

As you know, predicting the future is a difficult business, however, it is pretty clear that most “experts” are suggesting a stable variable interest rate environment for most of 2015.

If you are a betting person, I hope you have a lucky Melbourne Cup. If you are not having a punt, my tip is to put your money on your mortgage.

As always if you want to talk about home loans and interest rates contact me, Kim Wight  Mortgage Broker Sydney or maybe you have a hot tip for the race to share. 

 

 

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Apathy is the Enemy of Home Loan Savings

I will get straight to the point. Apathy is the enemy of Home Loan savings. If you have a 5 on the front of your interest rate then you could be wasting hundreds, even thousands of dollars every year.

I have a product on my panel (with a well know lender) that is now offering 4.65% p.a. (with a 100% offset account).

The table below demonstrates the substantial savings that can be made on a $300,000 home loan.

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The chart below shows the 15 year history of a basic variable home loan with one of our major banks. The current rate for this product is 5.18% p.a..

Most Australians are unnecessarily paying more than 5% p.a..

Home loan rates

Put me to work  for you.   I will do the comparisons for you, and if necessary I will help you move across to a cheaper mortgage.

Contact me Kim Wight Mortgage Broker Sydney to discuss your home loan and make sure you have the right rate and loan for you. 

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Mortgage Brokers Are Good for Clients

Mortgage BrokerI  could not resist sharing this mortgage industry article with you today.

It is a rare piece of public recognition (from a major bank) that mortgage brokers are good for clients.

A General Manager from a major bank recently told an audience at the Australian Mortgage Conference that broker clients were, “wealthier and better educated than direct-to-bank clients”.

 

 

Here are some interesting points from his speech:

1. A greater proportion of broker clients had  full-time jobs compared with direct-to-bank clients.

2. Broker clients were more highly qualified/educated than direct-to-bank clients.

3. There was no discernible difference in credit quality between broker and direct-to-bank clients.

4. This particular major bank places a high value on mortgage brokers because they are introducing “new-to-bank customers”.

5. He also added that brokers were likely to write about 55 per cent of all loans in three or four years’ time, which compares with the 46 to 48 per cent they write today.

 Customers are voting with their feet. They’re using this service because they feel they’re getting trusted advice and they get someone who’s taking the pain out of it for them”.

Mortgage broking has emerged as a rare small business triumph in Australia. A classic example of how free enterprise has delivered better outcomes for clients in terms of savings and service.

It is interesting to note that banks have noticed these changes.

I  noticed about 7 or 8 years ago that brokers were no longer seen as the place you go when a bank knocks you back. We are now the first port of call because we have a much better chance of picking a bank that will say yes.

I will continue to work hard at keeping your valued support and remember if you you are looking for a home loan contact me Kim Wight Mortage Broker Sydney on 02 9594 5722. .

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