August issue of industry magazine “Australian Broker” presents industry experts agreeing that “Low-Doc” Lending is now effectively gone or will be gone with the National Consumber Credit Protection (NCCP) laws coming into effect as from 1st January 2011.  This legislation requires brokers and lenders to obtain adequate information and take “reasonable steps” to verify a borrower’s situation at the time of application, requiring additional documentation.  Therefore, a borrower who self certifies his income solely will no longer be accepted.

The irresonsible practices in the US market which preceeded the global financial crises has seen low doc lending in Australia being tarred with the same brush despite our lenders having more stringent processes.  It all comes down to whether Lenders and their repesentatives having done their due diligence as to the loan being “suitable”.

Low doc products remain currently.  However,  1st January 2011 will tell a different story.

Apart from investing in property, share trading is also an interest of mine.  Indeed, after the pain of losses, I invested in education and was mentored by Louise Bedford and Chris Tate (traders based in Melbourne).  Louise posted an article based on a conversation she overheard between two traders talking about how money isn’t really all that important.

“People make too much of a big deal about money.  It really doesn’t matter that much.  I mean it’s not like the rich people end up with kids who are more intelligent, is it?”

Louise quotes a study by Michael Marmot based on 17,200 babies born in the UK in one week in 1970 to look at just this question.  Significant health inequalites existed between the poorest and the richest groups for a start. For example, excluding the richest and poorest 5% of people in the UK, the richest remainder can expect to live 6 years longer and enjoy an extra 13 years free of disability.

The clincher, however, was that babies with low IQs at 22 months born to rich and well educated parents had caught up by the age of 6 with kids who started out with high IQs born to those with parents less well of and educated.  By the age of 10, the kids from the well-off parents were still progressing well with IQ tests, whereas the less well-off group were falling further and further behind!

I have just received a welcome email from my RTO advising me that my assignments for the Diploma of Financial Services (Finance/Mortgage Broking Managment) were assessed as of  “a high standard, reflecting your professionalism and experience.”  I am looking forward to framing my Diploma once it arrives in the mail. 

As from 1st July 2010, brokers were required to register with ASIC as a prelude to mandatory licensing which comes into effect as from 1st January 2011.  No registration means that a broker is unable to “write” a home loan for a borrower.  With coming regulation under the National Consumer Credit Protection (NCCP) Laws more skill, expertise and experience will be required by brokers to meet the “responsible lending” guidelines. 

To engage in ongoing education is my way of ensuring that I can offer the professional skills required as a mortgage planner servicing the key areas of Newcastle, the Hunter, Lake Macquarie and Central Coast.

Tip  – Start with a lower priced property.

It is much easier for a lower priced property to increase in value by say 10% than a more expensive property.  Lets say you buy a property for $250,000 – you paint, polish the floor boards, tart up the kitchen, a little landscaping and you have added at least the cost of the work to the value of the property and likely more.  You only need the value to increase to $275,000 and you have a 10% capital growth.  It is much harder to have a higher price property increase by that amount.   ($1 million property will need to increase by $100,000.)

There is more to refinancing than meets the eye.  Let’s look at the three main drivers behind refinancing:

1. Debt consolidation.
2. Better interest rate
3. Release of equity

Let’s look at the release of equity. Most of my refinancing activity comes through my investor clients. Investors are starting to fill the gap that was created by first home buyers. They are building a little bit of equity in their property and then refinancing so that they can buy another property.  It is like “leap frogging” into the next property.  Your equity provides the deposit and costs for the investment property. These funds are tax deductible, as it is the purpose of the funds that the ATO looks at rather than the security offered.

Releasing equity is a great way to start building your property portfolio.

If you have property in Lake Macquarie, Newcastle, Cessnock, Maitland, Central Coast or Port Stephens  and would like a no cost Rp Data property report just follow the link below

 No cost Rp Data Property Report

The City of Lake Macquarie has 11 suburbs record 10% and above capital growth in property for the first quarter of 2010 in figures recently published by Rp Data.

This shows that Lake Macquarie still has strong growth and supports it’s claim to being one of the fastest growing economies in NSW and a suitable place to invest.

As  you can see from this list the growth there is in all areas of the City.

Brightwaters 39% Hillsborough 23% Kahibah 23% Kilaben Bay 18% Windermere Park 18%

Belmont 15% Lakelands 15% Garden Suburb 13% Morisset 11% Fennel Bay 10% Nords Wharf 10%

Blacksmiths 9% Pelican 9% Cardiff 8% Wangi Wangi 8% Woodrising 8% Argenton 7% Speers Point 7%

Tingara Heights 6%

For a free copy of the Rp Data report on your suburb or any suburb you may consider investing in follow the link below and enter detail of the property.

Free Property Report

 

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Figures just released by Rp Data show that the top performing suburbs in the Newcastle LGA  for the first quarter of 2010 were:        

Lambton Median Growth Graph

New Lambton 37%   Elermotre Vale 11%   Lambton 9%   Waratah West 9%   Merewether 6%   New Lambton Heights 6%

Channel Direct Home Loans offer anyone considering investing or buying another property a FREE Rp Data report valued at $89.95  by following  this link  and providing the details of the property.

From the latest report many suburbs within the Hunter Valley, Lake Maquarie, Central Coast and Port Stephens had capital growth in the first quarter of 2010. If you would like to know how you property or suburb performed follow the “free property report” link to receive a copy 

Now as we enter a new financial year it may be time to consider  entering into property as an investment, may be you would like to look at  property in you own area. 

Channel Direct Home Loans offer an obligation free consultation and can assist you should you wish to consider this option to wealth creation.

Get your free report here

Free Property Report

The gap between variable and fixed rates has narrowed considerably, after three of the big four slashed up to 45 basis points from their fixed rate mortgages.

According to a recent report by Canstar Cannex, only 16 basis points, on average, now separates the two loan types – the equivalent of $26 per month on a $250,000 home loan.

“Following the RBA’s cash rate increases, fixed and variable are now almost sitting at parity,” Canstar Cannex financial analyst Mitchell Watson said.

“Borrowers could see this as an opportunity to reduce the risk of fixing but they need to be aware that fixing a home loan is a long-term decision and very much a gamble, so it really does depend on your own individual circumstances.”

While Mr Watson said fixed rates were currently very attractive to home owners, borrowers were better off riding the variable wave, especially because the RBA has already indicated that another rate hike is unlikely next month.

In the minutes of the last Board meeting, the RBA all but confirmed it would keep the official cash rate on hold until at least August.

The Adviser Wednesday, 23 June 2010

For a free Rp Data report email us with the property detail

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This report was released on the 31st of May by Rp Data and is a lagging indicator on the state of the property market that focuses on the capital cities. If you would like a snapshot of the capital growth in your suburb contact Channel Direct Home Loans for your free report now. Read the rest of this entry »

The end of the financial year is just around the corner and now is a good time to “get organised” for the tax man. Also don’t forget the Super Co-contribution Scheme. If you or your partner’s income is $31,920 or less and your contribute $1000 from your own money to your super fund, the Government will co contribute up to $1,500 – that is a 150% gain.

To work out the Super Co-contribution you could be eligible to receive based on your income and personal super contributions use this Super Co-contribution calculator or see the table below:

Channel Direct Home Loans strongly recommend that you contact your accountant or tax adviser to confirm your maximum contribution and benefit. To read the post 2010 budget  contribution changes follow this link