Real Estate

The 2014 Real Estate Forecast

February 21, 2014 by Reporter Leave a Comment

The Australian real estate market is currently only second in the world behind that of the US market in its activeness for investors. Last year saw plenty of strong investment conditions for home buyers and although many are predicting a burst to the Australian housing bubble in 2014, there are still plenty of reasons for prospective home buyers to be optimistic this year.

How Did We Get Here?

Last year we saw great growth across the country with home values rising substantially in nearly every major Australian city. Sydney saw a 15.1 percent increase while Perth was up 9.9 percent and Melbourne rounded out the year at 8.5 percent growth. This rise was due in large part to population growth, low interest rates and increases in consumer confidence. These factors all combined for a perfect mixture that lead to a much higher housing demand than previous years.

What to Expect

There are a few different polarizing views when it comes to the future of the housing market in Australia for 2014. First, we have American investment guru Harry Dent’s less than happy predictions. Dent has claimed credit for predicting the US boom and subsequent bust and the deflationary decade in Japan. He has recently made the rounds promoting his new book, The Demographic Cliff and is predicting a decline in the Australian market at anywhere from 30 to 50 percent. While that is an alarming prediction for most, Dent also states that there is a wildcard at play with China’s ultra wealthy investors who are in part to thank for the boom in 2013. If they keep investing it might help to keep Australia’s housing prices up.

Many other analysts like APM chief economist Andrew Wilson, are predicting a slowing in the housing market overall but nothing to the extent of Dent’s numbers. Wilson expects things to slow considerably in the market for both Sydney and Melbourne, of which both saw house price growth peak in December of last year. He also sees plenty of growth in the cards for both Perth and Brisbane. The market in Brisbane is still in the pivotal "catch-up" phase and is primed to reach new heights as Queensland sees a jump in the economy and an influx of job seekers. This is great for perspective investors in these regions.

Other market analysts are stating that Australia is still in the growing stage of the property cycle, which was bottomed out in mid-2012. This research shows that the housing market is moving into the "expansion" stage meaning more growth overall and an increase in property prices. Echoing predictions made by Wilson, this research shows that many states and cities will see different levels of growth but growing is they key factor here not a major decline.

What Does This Mean for You?

For the average home buyer this means that settling down and making that big purchase is still a good idea. Even with the possibility of the market slowing in certain urban areas this change will have little effect on the average home buyer as interest rates should stay low. If you are looking for great mortgage rates and customer service contact the expert team at State Custodians Mortgage today. As a leading non-bank lender, State Custodians Mortgage is committed to providing access to high quality home loans at market leading interest rates. They can help put you one step closer to taking advantage of the housing market while it is still on this generous uphill curve.

Who pays a mortgage broker?

July 14, 2013 by Reporter Leave a Comment

Consumers as well as people who aspire to become a mortgage broker are not sure about who really pays these professionals. While consumers might suspect a mortgage broker to be recommending solutions that earn him more profits, aspiring “mortgage brokers” have little or no idea of how well or how much they can earn in this profession. This article sheds light on this subject!

Much like there are no free lunches, there are no free advices either, much less a financial one. Mortgage brokers are experienced professionals who’re paid for their knowledge and expertise.

There is no way one would spend their time and energy if it were not for the compensation they earn for it. To become a mortgage broker, you have to understand the intricacies of the business. It is downright smart to understand how you would get paid before you venture into becoming one.

Mortgage Brokers earn a commission

It is needless to say brokers are compensated in monetary terms. Mostly, they earn a single-shot commission from the lender. The percentage can be anywhere between 0.5% to about 1.2% depending upon a number of factors like the duration of the mortgage or the lender‘s offering. Say, for instance, a broker is selling a mortgage for 10 years. In this case they would bring home a higher remuneration as compared to a 5 year mortgage for the simple reason that the lender is benefitted from it. In addition, the broker would also be selling one mortgage in a period of 10 years instead of two 5-year mortgages.

The commission earned is the trailer fee in financial terms. It is the lure for the broker to sell the mortgage. The lenders have been paying trailer fees to financial advisors for ages but it has just come into the scene for mortgage brokers. This is actually very important to understand if you want to learn how to become a successful mortgage broker. At the time the mortgage is signed, brokers earn a low percentage but they continue to get an additional percentage every year till the tenure of the deal. This translates into a twin benefit: one it gives them financial sustenance and two it gives them a constant revenue stream over a defined period.

What you, as the broker, have to take note of is this trailer fee. It is what hitches you to sell you the mortgage. Whilst working with a prospective client, you may be able to present a wider variety of offerings as compared to a financial institution as they can only sell certain products their organization has affiliated itself with. This is where the trailer fee kicks in. Combined with a host of other benefits like bonuses dependant on volume of business brokers procure for the lender, trailers can largely influence you in terms of the products being offered as some are more lucrative as compared to others. Bonuses for certain products can mean travel, perks or gifts for you.

Therefore, before you take the road to become a mortgage broker, study the market well as to which products are going to give you the maximum benefits as these will be the ultimate deciding factors in you becoming a successful mortgage broker. Explore the market options and choose the ones that offer you the most perks and bonuses as these are the monetary, or otherwise, gains you are going to derive out of selling a mortgage to a client.

Article by Red Rock Brokers who is an independent mortgage finance company specializing in property finance solutions for investors & borrowers with specialized lending needs.

Types of Low Doc Products and Options

June 23, 2013 by Reporter Leave a Comment

Everyone doesn’t have a specified regular income, and when a person doesn’t have a fixed income or cannot provide documents in support, he become ineligible for a home loan. For the benefit of such people low doc home loans have been introduced, which have now transformed into smaller mortgage finance solution for such people.

Getting a home loan isn’t as easy as it looks first up, there are many formalities associated, which makes it really lengthy and cumbersome process. However, when you want to purchase a property, you will need a home loan. And to get a home loan, you will need proof of income, assets and liabilities etc to prove your credit worthiness.

Low doc residential loans are designed specifically for self-employed people or casual workers, who have income and assets, but are unable to provide the financial documents required at the time of application for loan. To apply for a low doc loan or low document loan, a person needs to file in a written application, this application works as a self-declaration of income derived from business for casual workers and self-employed. People with bad credit history are also eligible to apply for low documentation loans.

Benefits of low doc home loans

· These loans are suitable for people who do not have financial documents to prove their regular income

· Low doc loans require no or very minimum paperwork at the time of application.

· People with bad credit history can apply for a low document loan

· Low doc loan is passed on self-verification, applicant himself states his income. No financial verification needed

Types of Low Doc Products

· Low doc 60: Under low doc 60 an applicant can get a Loan to Value Ratio of 60 percent. The applicant needs to provide an application for self-verification along with accountant’s declaration. The loan can be taken for purchase of refinance.

· Low Doc Construction: The loan covers up to 80 percent of the value, and can be used for purchase of refinance.

· Low Doc Platinum: The loan covers up to 80 percent of the value; it requires self-verification and accountant’s declaration.

· Lite Doc Express: The loan covers up to 80 percent of value. Self-verification and accountant’s declaration is required for application.

· Low Doc Easy: The loan covers up to 85 percent of Loan to Value Ratio. Application for Self verification along with accountant’s declaration is required. The loan can be used for purchase of refinance.

Low Doc Loan Options

Various types of low doc loans are available, some of them include:

· To purchase property

· For refinance

· Low doc loans for business expansion

· Loan to pay tax debt

· Loans with no mortgage insurance

· Low doc home loans to purchase or refinance residential land

· Low doc construction loan to build more residential property

· Specialist low doc loans for applicants with bad or not so perfect credit history

Author Bio: I’m Andrew a specialist mortgage finance consultant of Red Rock Mortgage Group an independent mortgage finance company with 7+ years’ experience in writing finance topics.

Housing price growth in Australia is over

May 1, 2013 by Reporter Leave a Comment

Price rises in the Australian housing market have slowed, according to new reports, and they won’t show any signs of picking up again in the near future.

In an important speech to the Citibank Property Conference in Sydney last week, the Australian Reserve Bank’s head of financial stability Luci Ellis said that home prices in Australia are likely to grow more slowly than they have for the past 30 years.

She stated that “trend housing price growth will be slower in future than in the previous 30 years”, and is unlikely to rise rapidly again.

House prices are definitely rising – but not “booming”

These new statements from the Reserve Bank come just a month after the latest RP Data-“Rismark Home Value Index” showed that capital city house prices rose by 2.8 per cent on average in the March quarter of 2013 – the strongest quarterly result in almost three years. According to The Australian, this slow rise can also be seen in both the Australian Bureau of Statistics’ established house price index, which rose by 2.1 per cent, and its consumer price index, which rose by 2.2 per cent throughout 2012.

However, RP Data research director Tim Lawless admitted that we are unlikely to see such growth rates continue throughout the year, with growth likely to normalise over the coming months.

What’s to blame for the slowdown in housing price growth?

In the late 1990s and early 2000s, the low-inflation targets imposed by the RBA meant that consumers could borrow around twice as much as they previously had been able to. This in turn contributed to the huge rise in home prices and housing price problems in australia that was observed during this period, both in absolute terms and relative to consumer income.

However, now that this inflation-targeting period is over, housing prices are believed to have leveled off to a “new normal”, according to Dr Ellis.

What does this mean for potential homebuyers or investors?

Those scoping out new home loans for a home or investment property may be wondering what this latest news means for them, and the answer may not be such a positive one. In her speech, Dr Ellis suggested that these slower growth trends in housing prices meant that total returns on rental properties would fall, and that today’s homebuyers would most likely not receive the same capital gain on the family house as the previous generation did.

The Reserve Bank also warned that a slow housing market may see more periods where house prices actually fall, meaning that both purchasers and financial institutions should be cautious of borrowing or loaning a high percentage of the purchase price of a new home. This is so borrowers can try to avoid a situation in which their outstanding loan is larger than the actual value of their home – or what’s known as negative equity. The RBA is also opposed to banks lowering their lending standards to try and incentivise borrowers and boost loan growth and profits.

While a downturn is possible, there’s a low possibility of a property price crash

Those worried about the property market ‘crashing’ shouldn’t be – it’s unlikely that the price of property will crash any time in the near future, even though the RBA says that a downturn is possible. Ellis said that the RBA was “pretty sure that the boom we saw in the early 2000s managed to end with a fizzle, not a bust. So we don’t expect a sharp reversal from a starting point described by the situation we face now.”

Those interested can read Luci Ellis’s full speech here.

Low doc loans solutions for self employed business people

March 5, 2013 by Reporter Leave a Comment

Are you a self-employed professional? Do you find availing loans for your business or personal needs difficult? Did you face unending hassles the last time you applied for loan from the bank?

Self employed low doc loans

If the answers for all the questions are in positive then it means you are facing some serious hardships in availing loans, which be quiet disappointing for the future plans you’ve made.

However, the long wait is finally over.

No longer would you be facing trouble standing in the long queue and waiting your turn only to find that the application for loan approval has been rejected.

The answer is in the form of a path-breaking financial products—– “low doc loans” or “low documentation loans.”

How do they help?

Low doc loans are specially designed for the people who are self employed and who face difficulty in furnishing up to date documents related to the income source and various other financial details. There are situations where the produced documents don’t actually reflect the source of consistent income. Hence the application for loan, receives rejection wherever applied.

Regular loans lenders find it very unsafe to offer loans to people categorized under self-income groups due to the instability of their business in comparison to regular income holders.Therefore, lending funds to such individuals is termed as a huge risk and banks generally refrain from lending it to them.

These loans could very easily add on to the list of Non Performing Assets (NPA’s) for these banks.

Other advantages of low doc loans:

· The number of financial documents required to avail the low doc loan is fewer than otherwise. It solves the major problem for the loan aspirants categorized under self-employed groups.

· Low doc home loans in Australia is available up to 90% of the market value of the property. This means that the applicant receives higher amount of the funds than from regular sources.

· The options under this category are innumerable and the aspirant can easily decide on the best possible choice as per the needs.

· Low doc loans offer redraw repayment facility. This is one of the main features of the loans that impart unique credibility and attractiveness to them. This feature is present in much selected regular loan schemes.

· In addition, the applicant receives the option of flexible repayment and unlimited extra repayment without any early exit. This adds a unique cover of security to low doc loans. In short, they have all the necessary features that make them more preferred.

Therefore, even in conclusion, we can state that low doc loans or low documentation loans are the best option for self employed people. However, they should make it a point to enquire about the stamp fee and miscellaneous expenses along with the total repayment amount before applying for these loans.

These loans are easily available at all the banking institutions where they can be easily accessed. It is always better to evaluate your borrowing potential before thinking of applying for low doc loans. Red Rock Mortgage Group is an independent mortgage finance company specializing in property finance solutions.

NSW property law & stamp duty changes

June 14, 2010 by Reporter 1 Comment

Under the NSW Home Builder’s Bonus, from July 1, 2010:

Pre-construction stage Stamp duty

• Stamp duty will be cut to zero for off-the-plan home purchases worth up to $600,000 – a saving of up to $22,490.

• The zero stamp duty will only apply prior to any construction commencing on house and land packages or new apartments.

Under construction stamp duty

• Stamp duty will be cut by 25 per cent for people buying a newly-constructed home worth up to $600,000 – a saving up to $5,623.

• The 25 per cent stamp duty cut applies to home purchases made at any time during the construction period, or at completion.

First home buyers NSW

• First home buyers will also be eligible for these stamp duty cuts, giving them total benefits of up to $29,490

• They will still be able to access the NSW Government-funded $7000 First Home Owners Grant as well as the NSW Home Builder’s Bonus.

Empty-nesters

• Stamp duty for people aged over 65 will be cut to zero when they purchase a newly-constructed home worth up to $600,000 – a saving up to $22,490.

• This will only apply to people aged over 65 selling their primary place of residence and moving to a newly-constructed home, to encourage down-sizing and to encourage the regeneration of the state’s housing stock.

Get all the information on thes changes to the property sector in our 2 pdf files uploaded here

http://www.australianbusinesstimes.com/wp-content/uploads/2010/06/ofs_hbb11.pdf

http://www.australianbusinesstimes.com/wp-content/uploads/2010/06/7-6-10_Treasurer-2_Zero_stamp_duty_-_Australian-first_Home_Builders_Bonus_property.pdf

Thanks to : http://kpdn.com.au/

Australian Times – Business News and report

February 15, 2010 by Reporter 1 Comment

Australian Business times – Our First Post

Get ready to get news and updates from Australia , straight from the people to the people. Unbiased news not sponsored by any commercial entity (Except advertisements off course).

Its an all you can eat buffet of free information , Dig into finance , business news , stock market tips and information , and happening news all over Australia.

And it all cost you zip , nada 100% free

Thanks

Australian Business portal ( Ausbiz Times)

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