Posts Tagged RBA decisions

Why Use a Mortgage Broker

IMG_1135

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

Leave a Comment (0) →

RBA Cash Rate Decision

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 six years I have made  a form guide for the RBA’s November decision. Enjoy.

The ASX Futures Market

Mortgage broker sydney

As you can see, the ASX futures market is very much on the fence with 51% predicting no change as at COB last Friday.

Mortgage broker sydneyWestpac, CBA and NAB

The Commonwealth Bank and Westpac are forecasting no change in the cash rate for the next 12 months. The NAB is forecasting no change in the cash rate until December where they predict a 0.50% rise to 2.50% p.a..

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 2016.

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

As always if you want to discuss your current home loan or are looking at getting into the market please contact me Kim Wight Mortgage Broker Sydney at kwight@smartline.com.au. 

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

Leave a Comment (0) →

RBA Decision – The Need to Plan

Since Tuesday’s RBA decision to keep rates on hold, we have heard that the Australian economy has grown quite strongly over the first quarter of 2015.

Strong economic growth, if sustained, could lead to an increase in rates. However, the ASX futures market, armed with these positive economic growth numbers, are still predicting stable interest rates for a while to come (see below).

What I  find disappointing is the almost universal belief (in the media) that borrowers will be in deep trouble if interest rates begin to rise.

I have a contrary view. Although there will always be individual circumstances where people unfortunately find themselves in mortgage stress, the majority of borrowers are prepared to handle a modest increase in interest rates. This view is based on two key points:

  1. When banks assess a clients ability to repay a loan they use a “test” interest rate that is almost always above 7.00% p.a..

This means that most variable rates would have to increase by around 2.50% before clients could potentially struggle. In fact some lenders assess repayment capacity at 8.00% p.a., which is nearly double the current interest rate.

  1. The average monthly variable interest rate over the last 10 years is approximately 6.71% p.a. (see below). So the “test” rate is approximately 0.30% p.a. above the long term variable interest rate.
Interest rates

RTBA Decision

As you can see, our banks have and are adopting quite conservative lending practices. Australian banks are arguably some of the most prudent financial institutions in the world. This conservative lending approach underpins the current price growth that we are seeing in some of our Capital cities. Far from contributing to house price growth, we feel that current lending policy is keeping a lid on the market.

As always  if you would like any advice around your mortgage, please do not hesitate to give me a call, Kim Wight Mortgage Broker Sydney. 

 

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

Leave a Comment (0) →

Tuesday’s Rate Cut

Tuesday ‘s 0.25% rate cut was very big news. Records have been broken.

Assuming the banks pass on all of this rate cut, some borrowers will now enjoy historically low rates down near the 4.50% p.a.mark.

There are 2 perspectives to consider here:

1. Investors – You could buy an investment property where the rental income might exceed the mortgage repayment.

2. Tenants – You could buy a home where the mortgage repayment could be cheaper than renting.

Don’t believe us? Have a look at the table below. The median annual rental yield for capital city units is now sitting at levels near or above most variable home loan interest rates.

Mortgage Broker Sydney

As you can see below, interest rates are at a historically low point.

Mortgage Broker Sydney

This highly unusual situation begs the question…. “How are you taking advantage of these low rates?”

Regardless of your perspective, the conclusion is the same. Mortgage finance is at very affordable levels and opportunities abound. Please give me , Kim Wight. Mortgage Broker Sydney a call if you would like to run some numbers. You might be very surprised at your options.

 

 

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

Leave a Comment (0) →

Latest RBA Rates Decision

The last RBA meeting for 2014 has been held and another “no change” verdict has been announced.

This continues a very long period of minimal change in almost every home loan interest rate category (since July).

Most of the experts are also predicting a fairly lengthy period of minimal interest rate change ahead.

One could be forgiven for thinking that we have nothing to report but as you can see from our chart below, our current position is extraordinary.

Mortgage broker Sydney

Latest RBA Rates Decision

Whilst the average basic variable rate for the major banks is currently a record low of 5.00%p.a., it is important to note that this is only the advertised rate. We have seen variable rates reach down as low as 4.65% p.a..

Now 0.35%p.a. may not sound like much but it is an annual interest saving of just over $1,000 on a $300,000 loan.

Please contact me Kim Wight Mortgage Broker Sydney at kwight@smartline.com.au if you would like to have your loan reviewed.

 

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

Leave a Comment (0) →

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.

Mortgage Broker Sydney

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. 

 

 

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

Leave a Comment (0) →

A must read for property owners and buyers

Every year I  provide you with  a must read for property owners and buyers , this invaluable annual report, the QBE / BIS Shrapnel “Australian Housing Outlook 2014 – 2017”.

Here is what they had to say.

Housing price growth will slow from it’s dizzy growth over the past 18 months (no surprise there!). However, eastern states will continue to see significant growth. Brisbane 17%, Sydney 9%, Melbourne 5%, Adelaide 6% and Hobart 6%. Lagging somewhat behind will be Darwin 2%, Canberra 1% and Perth is expected to a decline of about 2% over the period.

Nationally, economic growth is expected to remain muted. Consequently, there seems to be no significant impetus for the RBA to rush to the levers and raise interest rates. Interest rates are expected to increase by a modest 1% over the forecast period.

Mortgage Broker Sydney

There remains some difficulty in accurately determining the various sectors comprising the property market, as the ABS data on first home buyers is known to be highly unreliable. However, it is clear that the number of first home buyers continues to dwindle (although possibly not as significantly as some may believe). By far the most active market segment at present is investors. This is expected to continue, although their numbers will gradually diminish as rising property prices and rising interest rates affect rental yields.

The full report can be read on the QBE LMI website at http://www.qbelmi.com/pg-Publications-and-Presentations.seo . Towards the end of this report you will see a series of charts that compare BIS Shrapnel’s predictions to the outcomes. It is remarkable how accurate they have been over a relatively long period of time.

Remember if you are looking to buy your first property or up grade your current home please contact me Kim Wight Mortgage Broker Sydney  for all your home loan advice. 

 

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

Leave a Comment (0) →

Which direction will the RBA go from here?

The question on peoples lips at the moment is  –Which direction will the RBA go from here?

Our ongoing interest rate chart shows that basic variable, 3 year fixed and 5 year fixed rates have converged.

In particular, fixed interest rates are sitting at historically low levels. This has made many people think a lot more about the option of locking in an interest rate for a fixed term. This decision should not be made lightly. If you are inclined to fix, please call us to discuss the pros and cons.

interest rates

According to the ASX futures market, the outlook for variable interest rates is remarkably stable. They are speculating that the RBA will keep the cash rate at 2.50% p.a. for a further 18 months.

Reserve Bank

The Aussie dollar is an economic indicator that is worth keeping an eye on if you are wishing to understand the RBA’s cash rate decisions. If the Aussie dollar drops in value against the USD (which is happening at the moment), this theoretically gives our RBA more flexibility to lift rates. If inflation lifts we could potentially see a rate rise. Having said that, inflation remains low so the above chart reflects the general sentiment that variable interest rates should stay low.

As always, please don’t hesitate to call me Kim Wight Mortage Broker Sydney on my new number 02 8730 8900 if you would like to discuss your current situation.

NOTE: If you have a variable interest rate that begins with a 5, we should talk through your savings options.

 

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

Leave a Comment (0) →

FEAR OF MISSING OUT (FOMO)

The home loan market is booming at the moment and I am  just flat out but I want to talk to you about the FEAR OF MISSING OUT or FOMO 

Competition between the banks and non bank lenders is at an all time high and this is generating record low interest rates. The reason for this discounting is simple…. they can afford it.

The following chart demonstrates what I am  getting at. As you can see, during the period between 1999 and 2008 the interest rate margin between the RBA cash rate and what you paid for a variable home loan was around 1.20%. That margin has grown to around 2.60%.

Back in 2008  I was usually impressed if I managed to negotiate a 0.70% discount off a banks standard variable rate. I am  now negotiating rate discounts that I  would not have dreamed of in 2008.

 Fear of missing out FOMO

 

If you have not reviewed your existing home loan for a few years, it is time to put me to work. Remember, my mortgage broking service is at no cost to you and the savings can be very surprising.

A recent Smartline client had a $380,000 home loan on 5.08% p.a.. This seemed like a pretty competitive rate. We put them on a 3 year fixed rate at 4.69% p.a. with another lender. This saved them just over $1,400 per annum.

The above example is why you should have a Fear Of Missing Out (FOMO).

If you want to talk about your situation give me Kim WIght Mortgage Broker Sydney a  call.

 

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

Leave a Comment (0) →

Why Use a Mortgage Broker

Mortgage broker Sydney

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 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 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.

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

Leave a Comment (0) →
Page 1 of 3 123