In a recent article by Charbel Kadib in Mortgage Business titled “Investors bear brunt of Loyalty Tax” According to the Reserve Bank of Australia’s (RBA) latest Lenders Interest Rates data, existing variable rate home loan customers were charged an interest rate over 30 bps higher than new customers over the month of December. Drawing on the research, RBA governor Phillip Lowe encouraged long term mortgage-holders to review their interest rate and refinance to a better deal to capitalise on the competitive dynamic in the market. [1] Looking at the differences found with…

Why do people get turned down for loans? Bank’s home loan lending rules can change Having your loan turned down by your bank can be a reflection of their current credit policy, which can change based on shifts in market conditions. This means when you may have had no issues getting a home loan from your bank in better economic times, but you might be turned down today because it’s a tougher financial climate. Boxes not being ticked They look for regular income – so being self-employed can be an…

All the major banks have a standard set of rules they use to decide if a loan application is acceptable, or not. A ‘non-conforming’ home loan is simply a term used for home loans designed for people that don’t fit those rules. Loans like these can also be called ‘specialist’ or ‘alternative’ loans (alt doc). Non-conforming may not be a common term, but you might be surprised how many Australians have been declined for a home loan because they fall into this category, and why. For example, people who are:…

An alt documentation loan (alt doc) or a low documentation loan (low doc) are mortgages that can be taken out using different sorts of paperwork to the kind needed for a full documentation (full doc) loan. Self-employed borrowers, who can find it difficult to provide standard documentation as proof of their income, often use these sorts of alternative loans. The low down on alt doc loans Once upon a time, a ‘low doc’ loan was just that: a mortgage that could be taken out using less documents to get it….

When you are thinking about your first home, finding out you should be thinking about saving for a 20 per cent deposit can seem really overwhelming. The good news is that for some of the big non-bank lenders like Pepper Money, a minimum deposit required on some products can be as little as five percent of the purchase price of the property, but it’s always a good idea to have a deposit of 20 per cent or more if possible. So let’s look at how to get there. First work…

All your debts in one basket – Why home loan debt consolidation could be the right move. A lot of small debts can balloon into one big headache. A simple way to get things under control could be to refinance your home loan to consolidate debt. So – is it right for you? What it is Simply put, debt consolidation is combining all your debts – credit cards, car loans etc. – into one single debt with a single monthly payment. When they are individual loans each of them have…

Bigger deposit, better position  While some lenders can offer low-deposit loans for less than 5 percent of the purchase price, saving around 20 percent can offer you big benefits:  Access to a wider pool of lenders and products You need to borrow less money overall It’s a clear sign to potential lenders that you’re good at managing money. If you’ve saved less than 20 per cent there are lenders who can help, but deposits of that size may require Lenders Mortgage Insurance (LMI). This adds more fees and another layer…

If you’re self-employed or you own your own business, you’ll know all about the challenges of admin – keeping your accounts, finances and income flow all on track. It’s not easy. The last thing you need is a ‘no’ on your home loan application because of the paperwork. But here’s some good news. There are alternatives. Here are four steps that anyone who’s self-employed can take to help get a home loan sorted. 1. Sort out the paperwork you do have When mortgage lenders are looking at a home loan…

Your finances can get a bit out of control sometimes, for all sorts of reasons. Illness, divorce, redundancy – sometimes, just getting overwhelmed with things to do and accidentally missing a bill payment. The end result can be that you get put in the bad credit basket. Even if you sort it out and pay the overdue bills or fix up a default on a loan repayment, you can still have a black mark against your name afterwards. So while you may see yourself in the clear after clearing debt, others…

Recovering from bankruptcy can be a long and difficult process. And even when you’ve been discharged or completed a debt agreement, some lenders will automatically decline your application for a home loan because of the history. However, there is good news. Some lenders look at things a little bit differently to others. Well-established non-bank lenders like Pepper Money believe a past bankruptcy shouldn’t mean that you’re not able to achieve your future goal of owning your own home. So they designed home loan products specifically to help. If you’ve been…