What’s involved? 

Your finance broker can do a full home loan health check for you either in person or over the phone. They will check if your loan is still competitive and still suited to your individual needs.

Having an expert do this for you can also take the stress out of the process for you. It is advisable to get this check done at least once a year, or if your circumstances change.

Questions to ask 

Be aware of what you want checked. Think about the following when you speak to your broker:

• Am I paying an unreasonably high interest rate?
• Am I paying high fees?
• Am I happy with the service I receive?
• Does my loan give me the features I need?
• Am I paying for features I don’t use?
• Have my financial circumstances changed?

Benefits 

A home-loan health check will generally cost you nothing and could save you thousands. Your home loan features could be improved or you could find yourself with a lower interest rate. A better payment structure could also be introduced, making your repayments more manageable.

Checking the state of your current loan could uncover the possibility of taking out additional finance, which can consolidate any other debt you may have or help you purchase an investment property.

Contact us on (02) 9614 0888 or enquire here to organise your complimentary home loan health check.

Don’t forget about our Cash Draw Give Away! Contact us today and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post When was you last home loan health check? appeared first on Sydney Financial Services - Aloha Loans.

Brokers can help connect you to the lender better fit to serve your mortgage needs by shopping around on your behalf.

In order to decide whether or not to provide you with a loan, lenders will generally assess you against five qualities.

1. Your ability to repay the loan. To establish your capacity the lender will look at your employment history and salary to evaluate whether you have enough cash coming in reliably to pay the loan over time.
2. How much cash you have up front. Assessing your ability to put down a percentage of the value of the property being purchase up front is standard. The percentages vary though, and specialist lenders may approve a five per cent deposit.
3. The property appraisal price. Since the property is used as collateral if you are unable to repay the loan, the lender will value the property. Based on the report, the lender will decide whether the property is worth the loan being approved.
4. Your financial history. Your credit rating, expenses and debts will help the lender assess your character as a borrower and whether you are worth the risk.
5. Market conditions. Economic circumstances in the market can influence what interest rate you have access to and whether you need to provide extra security. They can also influence the repayment schedule.

While loan officers work solely for a lending institution and can only offer that institutions products, an Aloha Loans Finance Broker is able to shop around for you.

Finance Brokers are paid commissions by lenders to match borrowers to the right products, and can negotiate the lower rate on your behalf, which is why half of borrowers today turn to finance brokers when it comes to finding a home loan.

For assistance in tailoring your application to the lender and product that suits you contact on (02) 9614 0888 or enquire via our website here.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post How do lenders assess applications? appeared first on Sydney Financial Services - Aloha Loans.

Late payments and loan defaults leave marks on a credit history that can complicate any effort to refinance or secure a loan in the future. Default can also lead to a home being repossessed and sold by the lender, so it’s very important to act quickly to avoid it.

While late bill payments and a loan in arrears can impact your credit report and lead to difficulty securing finance in the future, the worst case scenario is repossession of a property.

In the past, lenders may have taken months to start the proceedings that lead to repossession. However, according to the Financial Rights Legal Centre (FRLC), this is not the case anymore.

Lenders work to a timetable to begin court proceedings and this can be very difficult to stop once this process has started.

Once a mortgagee has defaulted on a loan by failing to make repayments as agreed, they can be sent a Default Notice, which gives them 30 days to catch up on the repayments that are in arrears, as well as continuing to make any repayments that are due in the 30-day period.

This notice will include an acceleration clause. This means that if the arrears are still outstanding after the 30 days has lapsed, the entire loan becomes payable.

Thirty days after the Default Notice, the lender can take vacant possession of a property that is not occupied, or seek a court order for possession of a property that is occupied.

The key to avoiding this substantial trouble is, of course, to keep making repayments. From time to time, circumstances such as unexpected job loss or illness will impact a mortgagee’s ability to make payments and, when this happens, the key is to act quickly, as there are more options before a Default Notice is served than there are after.

Many lenders will negotiate short-term variations to repayment schedules as long as there is a plan to get back on track, and there are circumstances in which lenders are obligated to agree to such arrangements. It is important, however, not to agree to payment terms that cannot be met.

Make sure you think through your plan as to when you will resume making payments. Do not promise something you are not certain you can achieve or is not realistic. If you don’t know when things will improve, ask for an initial arrangement to be reviewed at the end of the agreed repayment arrangement.

One of the advantages of recognising a looming problem before you get behind in repayments is that a finance broker may be able to assist you to pinpoint the source of the problem, as well as identify savings that may be available by refinancing to a lower-rate or lower-fee loan. Once there are clear signs of financial distress, this will become much more difficult.

If you are struggling to make your mortgage repayments, Aloha Loans may be able to help you negotiate with your lender or find a more manageable loan. For more information, please contact us on (02) 9614 0888 or enquire via our website here.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post The Secret to Avoiding a Loan Default appeared first on Sydney Financial Services - Aloha Loans.

It’s easy to get carried away with the fun part of buying a property – looking at houses – but delaying the less compelling task of arranging finance will weaken your negotiating position on both the property and the loan.

Looking for a property to purchase is an exciting time. Choices regarding location, size, number of rooms and local amenities often see house hunters carried away in a deluge of daydreams and anticipation.

But, before you get carried away, it’s important to check off the essentials first. Although organising your finances may seem drab in comparison to perusing sales listings, gaining pre-approval with a lender will give you confidence about how much you can afford to borrow.

First and foremost, you need to determine if you’re eligible to borrow money from a lender. Your ability to repay the loan will need to be assessed as you don’t what to find out after you have made an offer that your credit history or deposit is not up to scratch.

Arranging finance before finding the perfect property will put you in a good position when it comes time to make an offer. When you do find the house you have always wanted, you can present to the seller and estate agent as a prepared applicant who is serious and reliable.

It shows you mean business, and gives them peace of mind that your financing will not fall through. Don’t be afraid to let the selling agent know you have conditional loan approval in place.

Sellers are most interested in completing their sale fuss-free and with steadfast funding, and showing that you are capable of both will help put you at the top of a potentially competitive list of applicants.

In the instance that you find and secure purchase of a home without having your loan pre-approved by a lender, there are a few pitfalls that you risk running into.

If you don’t have financing to pay for your property, you run the risk of forfeiting your initial 10 per cent non-refundable deposit you need to put down to secure the property. This may differ depending on what state you live in, but the point is it always pays to be organised and have pre-approval in place.

Saving home loan applications to the last minute also leaves less time to find the most suitable loan and have it approved ahead of settlement.

Arranging financing as an afterthought also adds immense pressure to the process of shopping around for the right loan and gathering the paperwork to prove you can service the loan.

The first step towards finding your new home is to sort out the finances. For further information about how we can help, give us a call on (02) 9614 0888 or enquire via our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post What Comes First: the Property or the Loan? appeared first on Sydney Financial Services - Aloha Loans.

Buying a property carries more costs than just the purchase price. In addition to moving costs, council rates, strata fees, renovations and furniture, homebuyers face additional fees to complete their property purchase.

Stamp duty

Stamp duty must be paid in order for mortgage documents to be legal. It’s essentially a tax levied by the state or territory government on the purchase value of the property or the market value, whichever is greater.

Legal costs

The legal transfer of ownership of the property will require a solicitor, conveyancer or settlement agent. He or she will perform property and title searches to ensure the seller is entitled to release the property, for instance, by checking the strata body corporate records.

Inspections

Pest and building inspections are an added cost, but they can save you from dealing with a major building problem after the purchase is complete. The amount is often dependent on the size of the property.

Agent fees

First-home buyers don’t have to worry about paying commission, since it is charged to the vendor of the property, most often as a percentage of the sale price. However if you’re selling your current home to buy another, you’ll probably have to take these fees into account.

Borrowing costs

Lenders have application, valuation and settlement or loan approval fees that vary depending on the lender. Finance Brokers are familiar with these fees and can help you take them into account when choosing a lender.

Insurance

Depending on your loan-to-valuation ratio (LVR) you may be required to take out lenders mortgage insurance (LMI). Read more about LMI here.

Although the borrower pays for it, LMI is not insurance for the borrower; it protects the lender should you default on the loan. You may also need building insurance if you are not purchasing a strata property.

If you are currently trying to obtain a property loan Aloha Loans has access to a wide range of lenders and experts in assisting first home buyers. For more information, please give us a call on (02) 9614 0888 or enquire via our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post The Added Cost of Purchasing Property appeared first on Sydney Financial Services - Aloha Loans.

Steps to Obtaining a Loan for an Investment Property 

Step 1: Speak to Aloha Loans

When considering an investment property, your first port of call should be your finance broker.  The first thing we will do is to review your income, assets and liabilities to determine how much you can borrow, which will give you a general idea of your target price range.  This will help you to narrow your property search within your purchase budget.

Step 2: Budgeting

Just like buying your first home, when purchasing an investment property, it’s essential to budget.  If you’re unsure of the how much you will need for the purchase of an investment property, speak with us and we will help you to get on the right path.

Step 3: Important conversations

Armed with all this information your Aloha Loans Mortgage Broker will discuss your plans to determine what you can afford.  We will then do some research to find the lenders that will meet your criteria and perform a comparison of those lenders to find the right loan for you.  After we have shown you the comparisons and settled on a lender, we will then help you to complete the loan documents, collect supporting documents from you and submit your application to the bank.

Step 4: Pre to Post Settlement

So what happens after you are approved for a loan and successfully made an offer for your property?  There can be many little things, like opening a bank account with the lender and funding it, coordinating between your conveyancer, the lender and the Vendor’s (the property seller) conveyancer to prepare for settlement and being your point of contact with the bank.  We even help you to apply for any First Home Owner’s grant that you may be eligible for.

For more information and further details, give us a call on (02) 9614 0888 or contact us through our website.

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

The post How to Successfully Obtain a Loan for an Investment Property appeared first on Sydney Financial Services - Aloha Loans.

What are investment lending caps?

In late 2014 the Australian Prudential Regulation Authority (APRA) attempted to curb the high competition in the Australian housing market, that locked out many first home buyers, by keeping a close eye on a suite of concerns, including the levels of residential lending to investors.

APRA’s communications at this time flagged an increased focus on:

• Higher-risk lending
• Serviceability assessments including interest rate buffers
• The rate of growth in investment lending

Lenders were strongly encouraged to restrict their investment lending to 10 per cent growth. APRA explained that the aim of the threshold was not to target specific loan types, but to pay more attention to the cause of imbalances in the housing market: strong growth in investor lending.

The Reserve Bank of Australia reported in its Financial Stability Review that direct risks to financial institutions would increase if high rates of lending growth persisted or were to increase further.  Following this report, in order to avoid the scrutiny of APRA, the major banks took action to slow their rates of investment lending, which would also lead to mandated lending caps and a potential need to hold increased capital against mortgage risk.

At the time ANZ Bank announced that they are no longer offering discount interest rates to new property investors who didn’t already have a mortgage over their own home with the bank and both Commonwealth Bank and National Australia Bank narrowed discounts applied to new investor borrowers.

What this means for investors

Fast forward a few years and while there have been investment lending growth targets set, the property market has continued to rise, however, we are seeing some moderation in that growth rate now.

While investment lending is now not as simple to secure as it has been, it is by no means impossible, and Aloha Loans have access to a large panel of investor-friendly lenders who are well placed to help. If you want to know more then please contact us on 02 9614 0888 or through our website

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Investment Lending Caps appeared first on Sydney Financial Services - Aloha Loans.

Lenders Mortgage Insurance
How to Buy a Property Without a 20% Deposit

Read Our Article: Guaranteeing Your Child’s Loan

How to buy without a 20% deposit

When you consider that a small flat in Sydney could set you back half a million dollars at the moment, saving a 20% deposit to buy that flat ($100,000) can seem an insurmountable task. That’s where insurance can help.

Lenders mortgage insurance (LMI) may be an added expense, but it offers buyers the opportunity to dive into the property market earlier, without saving up an entire 20 per cent of the property’s purchase price as a deposit.

What is Lenders Mortgage Insurance (LMI)?

LMI protects the bank or lender, should a home loan go into default, guaranteeing that the lender will get its money back if the property needs to be sold and there is a shortfall in repayment of the loan.

While a 20% deposit generally provides a good buffer against any drops in property value over the life of a loan, LMI can also provide the same protection for lenders, meaning borrowers can purchase property with a smaller deposit.

What’s in it for you?

For the borrower, it may seem like Lenders mortgage Insurance is just another expense to cover. But insurance can mean that some buyers will be able to enter the property market with, for example, only a five per cent deposit saved. In the example above, a $500,000 property, this brings the deposit down from $100,000 to just $25,000.

And, if the market is hot and prices are rising rapidly, paying LMI so that you can buy now could be cheaper than taking the time to save a bigger deposit. In the time it takes to save a higher deposit amount, property prices may well have surged by more than cost of the insurance so, for some properties and purchasers, it can make good financial sense to purchase earlier even with the added cost of LMI, especially when you consider the rent that you may have to pay while you’re saving.

What you need to know

The insurance premium is generally a one-off payment, but you may be able to roll it into the loan amount so that you are paying for it month-by-month along with your mortgage.

There can be a big difference in the cost of LMI premiums if you have, for example, a 10 per cent deposit saved compared with a five per cent deposit, so it may well be worth trying to gather together some extra funds, even if you despair of reaching the full 20 per cent.

The mortgage specialists at Aloha Loans are experts in the industry and the credit markets. Investigating your options and working out whether to buy now or save a larger deposit is a decision that we can help you with.   Contact us on 02 9614 0888 or through our website.

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Lenders Mortgage Insurance: Buying Without a 20% Deposit appeared first on Sydney Financial Services - Aloha Loans.

Tips to improve ROI on an investment property

Read: Investing in property on a low-income

When purchasing an investment property, there are a number of factors that could increase or reduce your potential return on investment (ROI). In this case it’s not just location, location, location.

When considering a property for investment purposes, an important question to ask is “will it be attractive to tenants?”.  But how do you know what will appeal to someone you’ve never met? Settling on a handful of locations is a good start. Young families and couples are typically the ones that drive capital growth so a location that is within a reasonable distance to schools, entertainment, transport and an employment hub is important. Other ideal factors are a low vacancy rate and relatively high rental yield.

Although location plays a major role, the quality of the home is also important.  You have to buy a homeowner quality property, because someone has to live in it.  And when buying an investment property, you also have to have an exit strategy, which could include selling to homeowners as well as investors.

You need to think about the demographic of renters who are likely to be living in the area. If you put a good quality, decent sized, one bedroom apartment in the inner city, it could be a great investment, however if you put it 30km out, it may not garner as much interest.

When investing in any kind of property, be wary of any danger signs. One of the biggest mistakes Australians make is not knowing what their cash flow is. Bad cash flow can be worse than paying too much for the property.  “It is vital to know how much your chosen property is going to cost after tax, every week after you settle. There’s no point in buying a top quality property if you can’t afford it.

Always be wary of somebody who tells you that their way is the only way to invest.  And lastly, buying for cash flow alone is flawed and buying only for capital growth is also flawed. You have to buy property that’s going to work for you.

When looking for a loan to purchase an investment property, ensure the expert you are dealing with is actually an expert. Not only can your Aloha Loans Mortgage Specialist find you a loan to suit your needs, but we can provide you with free Valuation and Rental estimate reports as well as put you in contact with trusted professionals in the property market who will talk you through their process.

Building your investment portfolio is important and we recommend that you have a great team of professionals around you to give you the right advice, including a Financial Planner, Accountant and Lawyer.  The Financial Planners at Riviera Wealth Partners are a good starting point to discuss your goals and give you advice on how to best reach your goals.

If you want to know more then please contact us on 02 9614 0888 or through our website

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Credit Representative 488658 is authorised under Australian Credit Licence number 398328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Improving the Return on Your Investment Property appeared first on Sydney Financial Services - Aloha Loans.

Understand about being a guarantor on your child’s loan.

If you apply for a home loan, particularly if the loan is for more than 80 per cent of a property’s value, you’ll more than likely have to prove to lenders that you have a satisfactory amount of savings. This is to demonstrate your ability to funnel a portion of your income into repayments.

Although it can differ, in most cases lenders generally look for consistent additions to savings over a period of at least three months and preferably a year or more. This means that the following are not considered genuine savings:

• a cash gift
• an inheritance
• casino/other gambling winnings
• proceeds of the sale of a non-investment asset
• government grants and other finance offered as incentives

The great thing is you can still get a loan without genuine savings.

For those who don’t have any genuine savings but still want to obtain finance, there are options. These include:

• Guarantor loans – Having a guarantor on your loan may mean that no deposit is required, with the equity or asset the guarantor stakes standing in for a deposit.
• Other significant assets such as shares, managed funds and/or equity in residential property – Depending on your chosen lender, cash isn’t the only thing accepted as genuine savings. There are even situations where the sale of a vehicle can be considered as genuine savings if proved that it was owned for three months or more.
• A strong rental record may see a lender allow you to forgo the genuine savings route – Some lenders will waive the requirements if a letter can be produced from a licensed real estate agent confirming that rent has been paid on time and in full for the preceding 12 months, as it highlights your ability to make repayments on time and on an ongoing basis.

We can help you find a lender with politics to suit what you are trying to achieve. For further information, please gives us a call on (02) 9614 0888 or contact us via email.  

Don’t forget about our Cash Draw Give Away! Contact us to day and have us assess your eligibility for buying your new dream property!

Licensing statement: Credit Representative 488658 is authorised under Australian Credit Licence 389328.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post What counts as genuine savings in a loan application? appeared first on Sydney Financial Services - Aloha Loans.