LENDING UPDATE – 11.05.11

MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 11.05.11

Key lending issues

  • No change to official interest rates again in May
  • Competitive Home Loan deals below 7% p.a. variable rate are still available
  • More lenders offering lower rates for loans below 75% of property value
  • First Home Owners Grant continues unchanged until 30.06.2012 ( $7000 established / $20,000 new)
  • Lenders looking carefully at borrower credit history and repayment record on current loans
  • All lenders now require additional detail in loan applications, including loan repayment capability and broker assessment of loan suitability with reasons
  • Tips for borrowers : what is required and what to avoid

TIPS FOR BORROWERS : WHAT IS REQUIRED AND WHAT TO AVOID

PURCHASES:

  • Make loan enquiries early. The more you know about lender requirements and loan eligibility conditions the better.
  • Look at a range of lenders, not just your existing bank. Many borrowers accept loans at 7.15% with fees, when great loans are available at 6.88% with no fees.
  • Clean credit history is essential. Obtain an online VEDA Advantage Credit Report on yourself before you apply for a loan.
    Some lenders will not accept applications if there are ANY credit defaults, while others will consider minor credit breaches.
  • Carefully calculate how much cash you need for deposit, stamp duty, Titles Office fees, mortgage insurance and legal fees.
    Lenders will need proof that funds are available to meet these costs.
  • Select a lender that best meets your needs. Example: some lenders will add mortgage insurance to the loan. Others will not.
  • Keep evidence of income: current payslips, PAYG Group Certificates, Tax Assessment Notices.
  • Keep evidence of savings. Lenders will require copies of account statements for at least the previous 3 months. Evidence of steady savings accumulation is important. Saving accounts must be held in the borrower’s name, not someone else’s name.
  • Keep evidence of lump-sum deposits : tax refunds, gifts, sale of assets, inheritance etc. Explanation of lump-sums is required.
  • Ensure that all current accounts (transaction accounts, credit card accounts, loan accounts) are fully up-to-date. Lenders often require these statements to check on borrower behaviour. Payment dishonours, late payment fines and arrears penalties on existing account statements can easily cause a new loan application to be declined.
  • Lenders look for steady employment history, preferably 12 months in current job. If not, then 6 months in current job and 2 years in same industry or job role.
  • Arrange a written loan “pre-approval” before purchasing, especially for auction purchases. This requires a full loan application, not just a quick verbal opinion from a lender representative or mortgage broker. Opinions are not reliable.
  • Select a solicitor or conveyancer to act for you. Their details need to be written on the Contract of Sale. A full copy of the Contract of Sale should be given to them immediately after signing.
  • If buying at auction, all purchases are unconditional. Loan “pre-approvals” strongly recommended. With private sales, Contracts should be signed “Subject to Finance Approval ” usually within 14 days. This especially applies to first home buyers.
  • Sign a Contract of Sale in your full correct legal names, as appearing on your Birth Certificate or Passport. Full borrower identification is required by lenders and the First Home Owner Grant office. Incorrect names on Contracts are unacceptable.
  • Be very careful about buying properties with obvious problems : structural damage, adjoining freeways or easements which contain high voltage electricity towers. Lenders may not accept these as suitable securities.
  • If you will live in the property, instruct your solicitor or conveyancer to prepare a “Principal Place of Residence” (PPR) form.
    In Victoria, reduced stamp duty is payable on properties priced up to $550,000 if simple conditions are met.
  • Don’t use all your savings. Keep some funds for contingencies and normal property running costs. Budgets are important.
  • 2nd home buyers should be careful with finance: before selling your current home, make sure that finance is available for the next purchase. Lender requirements change frequently and borrowers should NOT assume that a new loan is guaranteed.

REFINANCE:

  • Many of the tips above also apply to borrowers who are refinancing.
  • Clean “VEDA Advantage” Credit Report, proof of reliable income and satisfactory employment history are all essential.
  • Lenders will generally require 6 months of loan repayment statements for debts being refinanced from another lender, including mortgage loans, personal loans and credit card debts. Clean repayment history on these statements is required.
  • Check if there will be significant costs in terminating loans with your current lender: early loan repayment fees or costs for early termination of fixed rate loans.
  • Assess that the advantages of refinancing (eg. debt consolidation, lower monthly repayments, lower interest rates) will justify any costs involved in refinancing.

Please call Melbourne Mortgage Finance for FREE and IMMEDIATE assistance in arranging your loan.


Barry LeBrocq

Melbourne Mortgage Finance
Patterson Lakes, VIC 3197
Mob 0437417042
Web www.mmfinance.com.au

Disclaimer: The above information is intended as general information only and is not intended to address specific personal situations. While every effort has been made to ensure accurate content, it should be understood that loan products, interest rates and fees change frequently without notice. Potential borrowers should contact Melbourne Mortgage Finance to verify details and discuss their specific needs and loan eligibility.

What our customers say about us

Thanks for all your help and for making it so easy for me. Life will be so different now.

Jan Vincent
Montrose, VICTORIA

Thank you for your time on the phone yesterday and copying me into the below email.
I just wanted to take the time to say that I have never seen such a comprehensive email provided to clients by a Broker before. Very clear and detailed.
I hope it’s ok that I hold onto your details to refer to clients who may need assistance.
Kind Regards,

Shannon Oatley
Director & Licensed Conveyancer
Property Conveyancing Group, VICTORIA

We have found Barry Le Brocq of Melbourne Mortgage Finance to be very patient, caring and diligent in achieving a successful outcome to our refinancing requirement. We have no hesitation in recommending his services to others.

Don & Christine Perrett
Leongatha, VICTORIA

Many thanks Barry for the exceptional service that you have provided. We will most certainly be recommending you to our daughter (Bank of Melbourne branch manager) for any future customers who need a reverse mortgage loan.

Paul & Barb Spark
Somerville VICTORIA

 

LENDING UPDATE 14.06.19

  • LIVING EXPENSES ARE NOW A KEY ISSUE
  • COMPREHENSIVE CREDIT REPORTING NOW IN EFFECT
  • INVESTMENT LOANS AT OWNER-OCCUPIER INTEREST RATES
  • REVERSE MORTGAGE LOANS FOR SENIORS OVER 60
READ MORE

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Home Loans, Investment Loans, Equity Access Loans, Low Doc Loans, 100% Loans, Refinance Loans, Commercial Loans, Deposit Bonds, Reverse Mortgages, Accommodation Bonds, Vehicle Finance, Plant and Equipment Finance, Financial Planning and Business Finance.

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  • accreditation with 20 national lenders, allowing you to select from an excellent range of loans
  • we carefully listen to your needs, do our research, then present you with a short-list of three potential loan solutions. You choose the lender.
  • printouts of products, fees, interest rate and loan features are provided
  • arrange for your property insurance and personal insurance requirements to be assessed
  • ongoing availability to assist you after loan settlement
  • over 30 years experience in arranging finance and mortgage loans