Credit Crunch Looms Over Interest Only Borrowers

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While many Australians are looking forward to this new year to start afresh, there are those who dread what is to come, particularly the interest-only borrowers who are scheduled to switch to principal-and-interest repayments.

The interest-only periods of around $300bn worth of mortgages are expected to end this year, and many borrowers are left with no choice but to transfer to another lender or sell their homes amid the housing downturn. This translates to roughly 900,000 loans, or one in six mortgages, based on Australia’s $1.7bn mort According to a report in The Australian Financial Review (AFR), a borrower owing an average interest-only loan of $316,000 will need to pay an additional $400 monthly in order to meet the higher repayments. Borrowers with around $1m worth of home loans will have to pay about $880 more.

Many borrowers are faced with tight lending rules imposed by most banks. Some of those who find themselves stuck often turn to shadow banks or non-authorised deposit-taking institutions. Digital Finance Analytics principal Martin North said banks will be trying to refinance as many loans as they can, but the alternative for many buyers facing a dilemma is to seek help from these non-banks.

“It is fair to conclude that non-banks are lending like fury compared with the ADIs. But this is a big thing for the python to swallow. This is a symptom of easy non-bank funding, different capital requirements and a greater willingness to lend,” he told AFR.

However, this could potentially spur more risks ahead as borrowers who are rejected by banks often have to pay larger interest rates when they apply to non-banks.gage loan book.

 

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Aussies Blame Migrants For Skyrocketing House Prices

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Australians are starting to withdraw their support to migrants due to housing affordability and overcrowding concerns, a recent poll revealed.

ANU professor Nicholas Biddle said the most common reasons given by those who do not support further population growth were housing affordability, overcrowding of cities and the support for training Australians rather than importing skilled workers.

“Nearly nine out of 10 people nominated the cost of housing being too high as a reason for not increasing Australia’s population, while 84 per cent of people said that cities are too crowded and there is too much traffic,” Biddle said.

“Intergenerational wealth inequality is evident, and it’s understandable Australians just want a fair go. But immigration does not necessarily mean higher house prices – migrants contribute net economic benefits,” Allen told The New Daily.

Moreover, Allen thinks the timing of the survey, which was conducted around the time Prime Minister Scott Morrison gave a controversial speech calling for a permanent limit on immigration, might have affected the views of the respondents. “These ills aren’t the consequence of population, but rather politicians,” she said.

However, she added that while Australia is suffering from growing challenges, opportunities and benefits still abound for the country to thrive.

“Australia’s ageing demographic profile means the pressures on young people to shoulder the economic burden of future taxation dependency presents real risks to the nation’s future. The fact is, in Australia’s demand-driven migration scheme, migrants fill jobs locals won’t or can’t. Migrants don’t take from locals. They make net contributions to the economy,” she said.

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“The Best Comes With The Lowest” With Cheap Secured Loans

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Cheap secured loans are offered against any collateral. It could be real estate, automobiles or some other valuable assets. Generally, with cheap secured loans, the ranges of borrowed amount are from $3,000 to $75,000. But, in case of greater amount, lenders will check the worth of your collateral. If your collateral has higher value then, lenders will not only be willing to offer higher amount but also a lower interest rate. Even cheap secured loans are available for a comfortable duration of up to 25 years and you can pay off the instalments either monthly or quarterly.

Cheap secured loans however are offered at better terms and conditions that suit the borrower’s requirement. The interest rate of cheap secured loans varies from individual to individual. For a regular income earner, a lower monthly loan will help in saving a big sum of money. On the other hand, for a person whose monthly income is not stable, a loan with flexible monthly payments such as over payments, underpayments or payment holiday will be highly suitable.

Nevertheless, cheap secured loans are obtainable against your valuable collateral. And for that, in case you fail to repay that can put your collateral in danger. So, before applying, you will have to calculate the amount you want to borrow as a loan. Needless to say, should borrow the exact amount, as borrowing a larger amount may become a huge financial burden in future.

Now the question is how can you get a cheap secured loan. It is a bit tough as many lenders offer cheap secured loans to lure people. But in reality, these loans are not at all cheap. Don’t worry. With some effort, you will be able to get a cheap secured loan. First of all, list your requirement- decide the amount you want to borrow, how long would you like the repayment period to be, what amount of monthly instalment are you comfortable with.

Next step is choosing lenders. Besides traditional lenders, you can opt for online cheap secured loans. Even, finding an online cheap secured loan is easier- Just a click brings all data within a minute. And last but not the list, comparative judgement of various quotes will help you to get the best deal.

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Being Straight With Debt Counsellors

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‘Credit card debt’ is the worst of all nightmares. Credit card debt settlement is a wonderful stress relieving mechanisms. Once you are done with your credit card debt settlement, you are assured of a much better life.

You can approach credit card debt settlement in 2 ways. You can either go for credit card debt settlement all by yourself or you can take advice from a credit counselling company or a professional.

If you go for credit card debt settlement all by yourself, you will need to analyse the various options available to you e.g. checking on various balance transfer offers available in the market, checking the short term loan options with the banks etc etc. However, if you want to take credit card debt settlement advice from a professional, you should be able to trust the advisor fully. So you need to check the credentials of the credit card debt settlement advisor/company.

These credit card debt settlement companies/advisors will be able to help you in the best way if you tell them your current financial situation correctly. Your future plans are important too, as they might influence the decision on ‘What route for credit card debt settlement would work the best for you’.

Moreover, once you are done with your credit card debt settlement, you should also take measures to avoid falling into that pit again.

 

 

Checking Mortgage Rates Online

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Homeowners who are planning to re-finance their home may find the Internet to be a very worthwhile resource. The Internet is useful because it can give the homeowner a wealth of information as well as the ability to compare different rates from different lenders at their convenience.

One of the most popular advantages to researching re-financing online is the ability to comparison shop at the homeowner’s convenience.  Homeowners can also take their time comparing the quotes they receive from these lenders online instead of feeling pressured to provide an immediate response.

Homeowners who are using the Internet to research re-financing options and obtain quotes should carefully consider their sources.  Homeowners who stick with well known lenders and established websites will not likely encounter problems but those who select a new lender may be surprised by the results of the re-financing attempt.

Homeowners should also take care not to be fooled by fancy web design. A website which looks very professional is not necessarily a website which is accurate and informative. Many skilled website designers can create websites which are both attractive and professional looking.

While shopping for re-financing options online is certainly easy and convenient, homeowners should consider completing the application process in person. Completing the re-financing process in can  prevent the homeowner from being surprised by any elements of the mortgage re-finance. This may include additional fees which are tacked on during the processing of the application, rates which are only available in certain situations or other elements of the re-financing agreement which could significantly impact the homeowner’s decision making process.

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A Basic Guide To Home Contents Insurance

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Basically, home contents insurance is insurance protection against the replacement cost that you would otherwise have to pay to replace the contents of your home in the event of then being lost, damaged or stolen. As is the case with home buildings insurance, the main factors contributing to grounds under which you can make a claim against your home contents insurance include theft/burglary, damage due to floods, burst water pipes or boilers, etc.

There are, however, two very important factors that you need to keep in mind when insuring the contents of your home:

First, in the case of home contents insurance, it is rarely the case that your mortgage provider is going to insist that you have this type of insurance as part of your mortgage agreement;

Second, regardless of whether you own or rent the property you are currently living in, you should still be looking to insure the contents of your home – as these are your personal possessions.

Two further aspects of home contents insurance also need to be considered carefully when you are checking out the different kinds of policies on offer. In some, but not all, cases you can be insured for your home contents even when the items listed in your home contents insurance policy are not actually physically located on the home ‘property’. So, for example,

First, it is possible to claim when you are transporting items from one place to another and they are stolen.

Second, home contents insurance is insurance against the replacement cost of the item being insured.
It does not, nor is it intended to, insure you against the nostalgic value of the item damaged/lost. So, for example, if you insure a picture your deceased grandmother gave you, which would cost £20 to replace, it makes little difference that it was your deceased grandmother who gave it to you and that it cannot, therefore, be replaced.

Although home contents insurance is, in all but a few very rare circumstances, a completely voluntary scheme of insurance to subscribe to, if you are in any doubt as to the value of this insurance scheme, take a quick mental inventory of the contents on your home and their value and then get a few quotes off the internet and you’ll soon be seeing the value of having your home contents properly insured.

 

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Auto Insurance Tips

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1> Raising your deductible
Deductible is the amount you pay from your pocket before making an insurance claim. The disadvantage of raising your claim is when you make a claim, you will pay more. However, if you are a safe driver, you will overtime save more money by raising your insurance deductible. Look at your previous insurance claim history and make a discreet decision for yourself.

2> Older Auto – Drop comprehensive / collision coverage.
If your car is not worth much, why pay for comprehensive and collision insurance coverage. You can visit a myriad of online sites to find true worth of your car. Additionally your insurance broker might be able to pull up the true worth of your vehicle.

3> Taking advantage of low mileage
Some auto insurance companies will give discounts if you drive less than a certain number of miles or drive less than a certain distance to work.

4> Moving – Consider insurance costs.
If you are considering moving, it will be a good idea to call your insurance agent and get his opinion on the insurance costs in the new city or state.

5> Low profile vehicle
Your vehicle will also determine your overall insurance costs. Some of the cars are favorite for thieves since they fetch a good price. Some cars are more expensive to repair. It makes a lot of sense to do adequate amount of research before you make your auto purchase.

6> Make sure your vehicle is correctly listed by your insurance agent.
Many manufacturers offer somewhat similar model names for vehicles but insurance costs may vary. Additionally 2 or 4 door or the wrong model can impact your auto insurance quote.

7> Have your insurance broker check other insurance company discounts.
A lot of companies will offer discounts if you and your spouse are insured with the same insurance company. Additionally, if you seek home insurance, life insurance, auto insurance from the same insurance company, you will get some discounts. Check with your insurance agent on saving money.

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Australia Clocks Fastest Value Decline In A Decade

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2018 was an underwhelming year for the Australia housing market as values fell at the fastest rate since the global financial crisis in 2008.

The CoreLogic December home value index results showed that the downturn in Australian housing conditions accelerated through last year, recording a 4.8% decline. The drop was driven by the weakness in most capital cities, particularly Sydney and Melbourne.   Sydney led the yearly drop in home values, recording an 8.9% decline. This was followed by the downtrend in Melbourne (7%), Perth (4.7%), and Darwin (1.5%). While Sydney and Melbourne recorded the weakest conditions, the peak-to-current declines were much less severe relative to Perth and Darwin, where values have been falling since mid-2014.

While other capital cities recorded improvement, conditions were not as strong in 2017. This shows that the housing slowdown goes beyond Sydney and Melbourne, according to Tim Lawless, CoreLogic head of research.urne. “Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017,” he said.

 

 

Melbourne To Take Sydney’s Place As Major Housing Market Drag

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The deterioration of Sydney’s housing market will likely continue to affect Australia’s overall property scene this year, but according to some industry analysts, the city will not be much of a drag as it had been before. Instead, they predict that Melbourne will take Sydney’s place as the major housing market burden.

On the other hand, dwelling values in Sydney are expected to decline by 3.3%, but the rate of decline would not be similar across housing categories. Moody’s Analytics economist Katrina Ell told The Daily Telegraph that detached house prices are expected to record higher price declines, as they saw faster growth in recent years.

On the other hand, the unit market is expected to become a bright spot as it rebounds with modest growth this year.  Moody’s Analytics also anticipates that value in Perth will decline by as much as 2.8% this year. In contrast, dwelling values in Brisbane and Adelaide are calculated to grow by of 1.2% and 2.6%, respectively.

Overall, the housing market downturn is set to persist over the following months, which Ell said could have implications for the wider economy.

“Given that most of the household wealth is in the relatively illiquid asset of housing, there would be greater systematic implications if debt repayment difficulties suddenly become a broader concern. If unemployment were to rise, it would force many households to sell at once,” she said.

 

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Fewer House Listings Recorded In December 2018

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It was a muted end of the year for the residential property listings in Australia as the number of homes for sale went down by 9.2% to 328,203 due to the holiday season.

While this seasonal decline is expected, SQM Research said areas such as Sydney, Melbourne, and Canberra recorded larger-than-expected drops in listings at 17.7%, 17.2%, and 15.5%, respectively. Of all the city capitals, Hobart clocked the lowest rate of decline at 5.8%.

“Listings in December had some large falls. However, let us keep in mind there was a surge in listings recorded in November and that December.  Traditionally records a large fall in properties for sale as this is a holiday period,” SQM Research Louis Christopher said.  Christopher projected that prices would continue falling in Sydney and Melbourne over the next months. However, he observed that asking prices in the two cities actually increased slightly during the previous month, up by 0.7% and 0.3%, respectively.

The largest monthly boost came from Canberra, where house asking prices rose 2.5%. However, unit asking prices in the city declined by 1.1%.  Sydney recorded the highest increase in unit asking prices at 0.7% but the largest decline in house asking prices at 1.6% over the month.

 

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