Archive for March, 2010

At Channel Direct Home loans we are often asked by clients whether it is necessary to get a home loan pre-approval before making an offer to buy a property. If you have your Home Loan Finance conditionally approved you are in a stronger negotiating position than the person who has not taken the steps to see if they qualify for finance. 

This applies to any one purchasing property whether you are a First Home Buyer, buying an Investment property or simply upsizing.

Just recently I met up with a Real Estate Agent, Kay – she told me that a property she had in Cardiff recently, ended up with 3 interested buyers all putting forward their offers with 2 putting finance conditions on their offers.

Sadly they both missed out; one party because their loan had not been approved at the time of offer, while the other party didn’t meet the criteria of the lender.

This is the worst position they could have been in! There was such disappointment and heartbreak but it happens all the time.

So, “Begin with the end in Mind”!  Have you home loan finance in place so that you can go shopping with confidence for a home in your price range. Your home loan pre-approval puts you in a favorable position to negotiate a better price than without finance approval, your offer is taken seriously and it allows you to swoop quickly if you come across a bargain.

Free Property Report

If you would like a free RP Data report on a property of your choice follow this link

Purchasing you new home or property can be one of the biggest financial decision you will make.

The actual purchase price is not the only cost associated with a property purchase, there are other costs that must be budgeted into the final cost of the new home.

The added costs to a first home buyer are your legal or conveyancing costs, it is also highly recommended that you get a pest and buildingreport, you also may have the costs of a removalist. All of these cost must be budgeted into the final cost of the purchase as in most cases these do form part of the home loan.

If this is not your first home and you be buying an investment property or moving to a new area or simple upgrading to a bigger home then you have the added cost of stamp duty, this is calculated on the purchase price of the property.

 You can follow this link for the NSW stamp duty calculator 

 This is a Simple Budget Calculator that may help you budget your income & expenditure and assist you in reaching your financial goals and qualify for that home loan sooner.

The Commonwealth Bank of Australia has announced its plans to reduce the loan to value ratio on some of its investment loans from 90 per cent to 80 per cent.

A spokesperson for CBA said that the tighter standards, which will take effect from Saturday 20 March, will only affect personal investment loans.

“Owner occupied home loans will be in no way affected by these changes,” the spokesperson said.

Under the proposed changes, the new maximum LVR will be 90 per cent, except where one of the loan purposes is personal investment, then the maximum LVR is 80 per cent. The same also applies to CBA’s line of credit loans.

According to the spokesperson, the changes are part of CBA’s responsible lending strategy.

CBA’s head of retail banking, Ross McEwan, said that the changes followed a comprehensive risk assessment of the bank’s $270 billion home loan book.

“The risk assessment showed that these were areas we needed to tighten in terms of credit quality,” he said.

“We view this as about improving the credit quality of the book, rather than an effort to haul in home lending.”

CBA’s announcement follows Westpac’s decision earlier this year to drop its top LVRs for new business from 97 per cent to 87 per cent.

Applying for a home loan can be like being let loose on a free flowing river with a small paddle and not much skill.  Some of the boulders that come up may include issues with your Credit Report.  If you have not paid your bills and you have not been in contact with the lender or credit provider to work out a repayment plan, the credit provider is likely to put your file into the hands of a debt collector and a default is lodged.  Even worse, they could take you to Court and issue a Judgement against you.  A listed default will stay on your credit record for 5 years.  Bankruptcy will stay for 7 years.

Lenders assessing any home loan application will also look at the number of times you have applied for credit such as credit cards, store cards, consumer or home loan applications.  If there are multiple applications over a period of time, this can impact on how the lender “scores” you.

Your credit file is your most important asset, treat it with the respect it deserves.

(Photo is of me and my family during our visit to Bali in January.  Nothing like a great deal of excitment and free flowing adrenalin.  Thankfully we had a strong, wily and good looking Balinese guide to get us down safely)

Home Loan Interest Rates:

The Reserve Bank (RBA) raised the official cash rate to 4% yesterday.   Three of the Big Four – CBA, ANZ & Westpac have announced they will be increasing the rate on their standard variable rate loans by the full 25 basis points as from Friday 5th March.  This increase will cause some borrowers to look at their refinancing options in the future.  However, whether we like it or not, rising rates will be a fact of life for this year.  

I believe in being prepared and to plan ahead.  Lets look at this scenario:  If interest rates increase by a further 75 basis points over the next 12 months, this will be an increase of 1%.  On a $300,000 home loan this will add approximately $2200 annually to your home loan repayment.  I suggest that you start to budget for increases in repayments.  Take advantage of our free budget calculator email us and get organised. 

See the importance of controlling you credit  card, and paying it as quickly as possible by following this link Credit Card Calculator

Brett & Kristy Celebrate Christmas In Their First Home

It was a frustrating time for all of us.  Brett and Kristy needed to get into their first home and be out of their rental property but their lender, the ANZ Bank, had such a large number of loan applications to process that they could not cope with the volume.  The step that caused the most anxiety was the delay caused by ANZ with processing the First Home Owners Grant.  As Kristy and Brett needed the $14,000 to provide the balance of the purchase moneys, it was essential that the Grant was available at settlement.  By continually chasing the Lender (also having Kristy make contact with the Bank) following up and repeated requests for escallation to the FHOG Team along with my personal contact with the Bank, we were able to settle on the due date with the Grant available.

Sometimes things just happen!  

This is what Brett & Kristy said on their Feedback Form…

“We would love to thank Robyn and Fred for all their hard work and team effort.  It it weren’t for their hard work, we wouldn’t been in our new house for Christmas.  We felt so cared for and not just another client.  We would and will recommend Robyn and Fred to anyone that needs to borrow. If you are like us and want to get looked after and a complete full service, use Robyn.  We would still be renting now if we didn’t have Robyn’s professional advice no matter what time of day or night, we knew we could call Robyn to answer any questions that were concerning us.  Robyn isn’t just a mortgage consultant, we now see her as a friend that is loyal.  Thank you so much, love Brett and Kristy.”

Channel Direct Home Loans Car Buying Service
Channel Direct now have access to an exceptional car buying service that will take the hassle out of buying that new car or commercial vehicle. 

If you are looking to buy a new vehicle our service is free to you and we have access to all the latest models. This service gives you the opportunity of buying at fleet discount rates saving you thousands of dollars off the retail price, this then results in lower repayments cost saving you even more $$ over the life of the vehicle. Trade ins are also part of the service provided.

Remember at the end of the deal the most important thing is to be satisfied you are not paying more per month than you should be.  Repayments costs are more important than interest rates. Low interest rate are often off set by increased purchase price

The vehicle is delivered to you with a full tank of fuel leaving you time to get on with your day to day activities

Call Fred on 0418 604 662 to learn more or discuss your personal position.