MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 28.11.12

• Deposit Bonds or Deposit Guarantees are available, for a very reasonable cost, to borrowers who have a full loan approval but do not have available cash to pay a required deposit. For example:
  
  • good equity in one property , but no ready cash to pay a deposit for the purchase of a second property
  • deposit funds are tied up in a fixed investment account and unavailable for a required deposit
  • current house sold unconditionally, but cash proceeds not yet available for a required deposit

  The Bond can be applied for as soon as the lender has issued a formal approval. The Bond is usually issued by the insurance company within 24 hours and replaces genuine deposit money not yet available. Use of Deposit Bonds must be cleared with the vendor and selling agent prior to purchase at auction.

• 2 year fixed rates are available from 4.99% p.a. subject to lender conditions.
• Stamp Duty discounts increase for First Home Buyers with loans settling on or after 01.01.2013. The current discount of 20% will increase to 30%. Maximum purchase price is $600,000 and buyers must be eligible for the First Home Owners Grant.
• New products announced recently include:
  
  • “Business Low Doc” up to 60% of valuation. Available for business purposes only. Lender will accept income declarations signed by borrowers/guarantors themselves. BAS statements and bank trading statements not required.
  • “Flexi Choice Low Doc” up to 80% of valuation with an Accountant’s declaration confirming income.
• Rapid reduction of loan balance can be achieved by using the following strategies:
  
  • arrange direct salary crediting into loan account
  • transfer surplus funds into loan account and access by redraw when required
  • use credit card to cover living expenses, then set up a credit card full sweep payment each month
  • make monthly payments higher than the required contract minimum amount
  • make lump sum payments into the loan e.g. tax refunds, gifts, proceeds from asset sales
• Refinance loans are available up to 95% of property value, but no debt consolidation permitted. Refinance with debt consolidation is available up to 90% of value.