Are you looking to a buy a new home? What if you don’t have any savings? Most banks require a 5% deposit to put towards the purchase price, before they will lend to you. The banks had very restrictive genuine savings policies and would only approve individuals where they could evidence savings made in a bank account from 3-6 months. Where a person could provide genuine savings, the banks knew that they were lending to a responsible borrower who could manage their finances and afford the loan. How has the policy changed? You can now borrow up to 95% with no genuine savings!... [Read more]
In the past, borrowing from the banks meant having a stable income, a strong employment history and at least 5% genuine savings. Not anymore! New policy Whilst some banks are more conservative in their lending policies, we know lenders that waive the requirement for genuine savings, allowing you to contribute a 5% deposit from various sources. This is great news for those of you who may have parents wishing to gift them a deposit. So if you want to borrow 95% of the purchase price, read on to find out which banks are most suitable for your situation and what the banks will... [Read more]
The New South Wales (NSW) Government has recently passed legislation tightening the witnessing requirements for mortgages over NSW property. Previously witnesses for NSW Mortgages were only required to have known the person signing the Mortgage personally or be provided with any type of identification so as to be satisfied as to their identity. Effective Tuesday, 1 November 2011 witnesses will need to be more than just personally acquainted or satisfied with the identity of the person signing the mortgage. They must: Have known the person signing the mortgage for more... [Read more]
The banks are making it easier for first home buyers to qualify for a mortgage of up to 95% of the property value. Despite this, younger home buyers still face many hurdles when trying to get approval. This is generally because they don’t have the savings or financial stability that older borrowers have, and as a result, the banks doubt their ability to repay their mortgage. Although, the fact that they have little savings, is no indication of their lack of financial commitment. In most cases they haven’t been able to save because they have been paying rent. Luckily,... [Read more]
Are you unhappy with your property valuation? One of the leading valuation management firms has come out requesting that customers stop challenging their valuations. ValEx, VMS and other valuation companies that work with the major banks receive high numbers of dispute requests however few are successful. Additionally, a major bank that we work informed us that only 3% of people successfully challenge a valuation. In other words don’t bother challenging a bank valuation! However, we disagree with Valex’s assessment that bank valuers are accurate as we regularly... [Read more]
From January 1, 2012, New South Wales first home buyers will only be eligible for a stamp duty exemption on newly built and “off the plan” homes. These changes will significantly disadvantage a large majority of first home buyers, as over 80% of homes bought in NSW are existing properties. Consequently, NSW first home buyers will need 3% to 4% more when purchasing an existing property. They may also find it harder to save for a deposit, resulting in a greater reliance on 95% LVR loans. Additionally, guarantor loans are expected to become the main method used... [Read more]
A new bank has just launched an expanded professional discount package for medical professionals. This discount allows you to borrow up to 90% LVR (90% of your property value) without paying any Lenders Mortgage Insurance! This change will bring home ownership a step closer for many young doctors and will make investing that much easier for established professionals looking to grow their investment portfolio. To qualify, you must be working in one of the eligible professions and be a member of one of the eligible associations. This new lender has a significantly longer... [Read more]
The Gillard government has announced that they will introduce a new program that will allow customers to switch bank accounts without the need to change details of billing, salary, mortgage payments and deposit accounts. This is a great initiative as many people simply do not change banks due to the hassle associated with switching over their direct debits. In practice this may be difficult to implement as the bank systems may find it hard to cope with such changes. We expect that there will be a lot of technical difficulties and lost transfers in this process. However... [Read more]
A major mortgage insurer, Genworth, have recently suggested a mandatory mortgage fact sheet for home buyers. This is a great idea for borrowers to be educated about LMI (Lenders Mortgage Insurance) as many do not know what it is or if it would apply to their loan. It does not protect them as a borrower, yet many borrowers believe that it does. The key to this fact sheet is that it must be kept simple as the usage of LMI varies between different lenders and insurers, it should inform customers without confusing them. One thing the fact sheet could mention is that some... [Read more]
We’ve all heard that a high percentage of small businesses fail in their first five years. Only around one in ten are still around for their sixth year! This is an incredible statistic, and highlights just how hard it is for entrepreneurs to get their ideas off of the ground. So what is it that causes these failures? We’ve complied a list of common reasons from ASIC reports, bank reports and from our own experience with the customers that we work with. Poorly designed business model Without a doubt one of the major reasons people fail is that their business... [Read more]
