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Is the Great Australian Dream a thing of the past?

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Perhaps due to the current conditions of the housing market, many Australians think the Great Australian Dream of owning a home is a thing of the past.

A new survey by Real Insurance found that two-thirds of Aussies would rather have freedom and flexibility in life over the commitment of saving for a home. Nine in 10 respondents said that achieving happiness in life is more important than having accomplished the traditional Australian dream of owning a home

“So, it seems that putting happiness, including travel and freedom, above anything else in life is the new Australian Dream. There’s nothing more important in life, after all, and reiterates how adaptable and resilient us Aussies are when faced with a challenge,” Real Insurance said. While 70% still think it is important to personally own a home in the future, three in five prospective homebuyers might find it hard to do so, as they are locked out of the property market.

The study also found that for those who are saving for a home, clothing, hobbies, tech gadgets, and eating out are some of the most common things they spend less on. “Our research shows that us Aussies are a resilient bunch who love a bodacious dream to aim for in life. So, we’re adapting our dream to meet a more realistic reality in the face of high property prices,” the study said.

Watch Out For These 4 Housing Market Scenarios This Year

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They say the New Year brings an opportunity for things to improve, but market watchers are not getting their hopes up for Australia’s housing market as conditions remain dire.

In a market forecast, CoreLogic head of research Tim Lawless said there are four scenarios that are likely to play out over the course of 2019, with the general downturn still continuing throughout the year.

The housing downturn in Sydney and Melbourne will continue to be the main culprit of the housing downturn. On the other hand, while other capital cities are expected to lose some momentum, they are likely to witness positive growth in nominal terms. “There will be a few exceptions: with the improving trend in Darwin, it looks likely the top end market will continue what is likely to be a long and gradual recovery in 2019, while the Perth market could also move back into positive growth territory through the year,” Lawless said.

On the home loan front, tight credit conditions are expected to persist, limiting housing market activity to below-average levels. The unfavourable lending environment will also discourage potential homebuyers from breaking into the market. The strict lending conditions will also have a negative spillover into consumer sentiment, which is already projected to weaken as Australia approaches a federal election.

The third likely scenario is the continued downturn in the new unit market, particularly in Sydney and Melbourne. This is due to weaker conditions across the two markets brought about by slowing migration rates from both overseas and interstate, fewer domestic and overseas investors, low valuations for off-the-plan unit settlements and overall tougher lending conditions.

Despite these discouraging market projections, one part of the market is likely to buck the trend. Lawless said lifestyle markets along the coastline and hinterland locations adjacent to the major capitals will remain a bright spot in the market as they continue to see strong demand from a variety of market segments.

While growth conditions will not be as stellar as last year, values are expected to trend higher throughout 2019.

Western Australia’s mortgage ‘delinquents’: The stories behind the stats

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Ms Meerman’s team of three counsellors based at Midlas in the Midland CBD helped Perth’s north-east deal with more than $50 million worth of debt last financial year. In the past six months, half of their clients were having issues paying off their mortgage. Mortgage delinquency occurs when someone falls more than 30 days behind on their home loan repayments.

Despite slight improvements on delinquency rates across the country and in WA, it remains a rampant issue. Recent figures from Commonwealth Bank suggest more than 1.5 per cent of its WA customers were in arrears on their home loan, second only to the Northern Territory.

Moody’s April 2018 mortgage delinquency map showed four of Australia’s worst performing regions were in WA: the WA outback, the Wheatbelt, Mandurah and Perth’s north east, which includes Midland. While the numbers paint a concerning picture, behind them are thousands of families who have experienced job losses or sickness, which is causing huge financial strain and serious mental health issues.

 

“It is really sad and most of these clients coming into me, they’re in their 50s or early 60s, they have worked their whole life, they’ve never been out of a job this long.

“It’s about their identity as a person and they feel like they’re failures. They’re facing bankruptcy, they’re at the end of their life with nothing to show for a lifetime of work.”

Ms Meerman said these clients usually had great payment histories on their home loan and it was frustrating for her to see banks pursuing them relentlessly after missing payments.

 Construction woes trickle down to families

Waikiki resident Samantha*, her husband and teenage daughter are healthy but they were affected by the ailing WA construction industry.

Her husband lost his job in April for three months, which was a huge blow to the family income.

“It wasn’t his choice to lose the job … he works with timber and that feeds the building industry and when that collapsed his company started retrenching people, he was sort of the last one on so the first one to go,” she said. The family’s mental health was strained from the financial stress coupled with the often crushing nature of job hunting her husband was going through.

“I think (my husband) applied for over 100 jobs. He would go for interviews, sometimes three at the same place and not hear anything.

“It got to the stage where he would’ve gotten a job in Welshpool, and travelled three hours a day just to have a job to pay the bills.

With the help of a financial counsellor both Samantha and Adam were able to get the bank off their backs and navigate their ways out of financial strife in ways they would have never thought of themselves.

Ms Meerman said falling behind on mortgage payments was a complex and stressful time, which is why the free service the financial counsellors network provides was so important.

She said the first thing they asked was whether the lack of income was because of illness or injury.

“If that’s the case you want to get onto your insurances ASAP. Not just insurances you know you’re paying for but the ones you might not know you have on your loans and with your super.

“Some people are insured for quite a lot of money through their super. They can pay out their house.

“I have seen people lose their house when they could have actually paid it out.”

Visit financialcounsellors.org for more information.

LOCAL MORTGAGE BROKERS

 

 

Amid an epidemic of mortgage stress, a perfect financial storm is on the way

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Homeowners, particularly in the mining states of WA and Queensland, are already grappling with a number of factors including unemployment, under-employment, stagnant wages growth and weak house prices.

Another looming threat is rising interest rates, with three of the four major banks raising variable home loan rates earlier this year independent of the Reserve Bank of Australia.

Andrew and Rachel Hayden built their dream home in Perth’s south-eastern fringe three years ago, but they are expecting a mortgage default notice from their bank within a month.

“We put probably $600,000 into it and [are] probably going to sell it for $480,000 — shocking,” Andrew Hayden said

He said he wanted to unlock his superannuation to pay his mortgage but couldn’t until the bank served him a default notice.

The couple’s financial problems began when Rachel Hayden fell ill 18 months ago.

The mother of five was forced to stop work and Mr Hayden had to shut down his business to care for her.

“[I feel] absolutely gutted,” she said. “You do everything by the book, everything. Gutted for the kids, they don’t do sports or anything and haven’t because you just can’t afford to.

“It took us so long to get here and we thought yes, no wasted rent money or anything like that

A perfect storm of rising mortgage costs

Credit Ratings agency Moody’s has predicted the situation will worsen as a growing number of interest only loans convert to principal and interest, adding about 30 per cent to monthly fees based on current interest rates

About 40 per cent of all mortgages funded by banks during 2014 and 2015 were interest only, and many of them included clauses which stipulated homeowners would have to start paying principal payments after five years.

Throw into the mix flat wages growth nationally, underemployment on the east coast and stubbornly high unemployment in the west, and according to Keith John, founder of Pioneer Credit — which buys debt off the banks once people default on their loans — you have a perfect storm.

“A perfect storm in the sense of, and I think we’re seeing it play out now, really low retail sales and a general lack of consumer appetite, and … people are desirous to paying down debt but don’t have the capacity that they did a year ago, or two or three years ago,” he said.

 

LOCAL RELIABLE BROKERS

FRIENDLY PROPERTY MANAGEMENT COMPANY

Home Loans

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Home loans make the process of buying a new home more affordable than ever.   When you buy a home, you should understand as much as you can about the process, as well as the questions you will be answering.  This way, you will be familiar with how things work and you will find the entire process to go much smoother.

 

When you look towards a home purchase loan, you will need to fully understand the interest rates. They are never the same and will vary among the different financial institutions, as well as from time to time. When you buy a home, it is very important that you keep up with the economy.  Any change in interest rates for a home loan can either increase or decrease the amount you pay back.

 

When getting a home loan, you will also need to understand the terms and the length of the loan.  Almost all financial institutions and lenders have a variety of different plans or periods for you to choose from.  If you choose a longer period, in most cases your interest rate will drop.  You can find this out yourself by using a mortgage calculator.  This way, you will know how much your mortgage payment will be before you decide to further pursue the loan.

 

As you probably already know, your ability to pay the loan back is very important.  Some lenders require that you keep your loan full term, while others may provide you with the option to pay it off any time you wish. Home loans that give you the option to pay it off early will normally save you quite a bit of money in the end.

 

Even though the early payoff option is great to have, it can also come back to haunt you if you end up defaulting on the home loan.  Or, if you decide to sell your home in the future, the early payoff can haunt you as well. For those very reasons you should always consult with a specialist before you commit to any type of home loan.

 

For the potential home buyer, home loans offer several different opportunities.  Before you rush out and get a home loan, you should always know what you are agreeing to.  You should also look into the company you are thinking of getting the loan from as well, so that you can better prepare yourself when you go through their process of getting your loan.

Unsecured Business Credit And How It Can Help Cash Flow Problems

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Unsecured Business Credit and How it can Help Cash Flow Problems

 

At some point in time, the reality with most businesses is that fluctuation periods would eventually come and such companies will have to face problems regarding their cash flow. A company may experience a financial crisis wherein more cash may be going out than entering as profit.

 

It is very important for any enterprise to never run out of funds, especially if the life of the business is dependent on being able to make large purchases of goods for production

 

What Is An Unsecured Business Line of Credit and How Does It Help?

 

An unsecured credit line for your business is a type of financing resource that can provide your company with the money that it needs without requiring collateral. This can provide you with the temporary funds that your company may need for operations to continue.

 

This is extremely vital especially when funds are simply either lacking or not available but your business is greatly dependent on making purchases for production and profit to come in. Aside from that, this type of credit line can also be beneficial for commercial use in such a way that it involves fewer risks for your part as the business owner as no collateral is involved.

 

Most lenders offering this credit line can also charge less interest and even a bigger credit limit as compared to other sources of finance.

 

What you should know about trying to secure such a credit line is that it may not be as easy as you want it to be or that it may not come right at an instant. In applying for unsecured credit lines, lenders would usually take the extra step of checking on your company’s credit history. This is necessary for them to do, as they are risking more by providing you with finances without the collateral.

 

And, thus, before you can be approved for an unsecured line, make sure that your company has maintained a favorable credit score. These lenders are interested to find out if whether your company is capable of making the right payments and purchases for both your parties to gain good income.

 

PROFESSIONAL BROKERS

Credit Card Debt Consolidation

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Credit card debt consolidation

 

Credit card debt is a nightmare of a problem and unfortunately there a lot of people who face this today (and if others don’t pay heed, they might get trapped into credit card debt too). Credit card debt consolidation is generally regarded as the most important step in credit card debt reduction and elimination.

Credit card debt consolidation is the process/strategy to consolidate debt from multiple credit cards into lesser number of credit cards. Credit card debt consolidation is sometimes also referred as a balance transfer where you transfer your balance on one credit card to another credit card. Generally, the balance transfer (or credit card debt consolidation) is done from credit cards with higher APR to credit cards with lower APR. Credit card debt consolidation can also be achieved by going for a bank loan (at a lower interest rate) and using that towards paying the debt on the higher APR credit cards. This loan is then paid-back to the bank in the form of monthly instalments.

As you would have noticed, a lot of credit card suppliers and banks keep coming out with attractive offers for Credit card debt consolidation. There is no dearth of 0% APR offers for credit card debt consolidation. However, credit card debt consolidation is a serious exercise and you must exercise caution. When going for credit card debt consolidation, you must properly analyze the offers from various banks and credit card suppliers. Check the time period for which 0% APR is being offered and also the APR that would be applicable after the lapse of that period. Generally, 0%APR is valid for a 6-12 month period only. So, if you are confident of paying back a considerable amount of debt in that period, this kind of credit card debt consolidation will work for you even if the APR (post 0% period) is a bit higher.  However, if that is not the case, the long term APR is going to be the most important thing for you. If the long term APR is more than the APR for your current credit card, this kind of Credit card debt consolidation will be futile for you. Also, check processing charges etc before you actually go for balance transfer or credit card debt consolidation with another supplier/bank. Another good idea is to check with your current credit card supplier and see if they can offer a lower APR to you in order to help you in clearing off your debt.

 

 

Credit Card Debts

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Credit Card Debt as a silent financial killer

 

Technology spoils people’s whims. It tends to cater to every human’s caprices. It feeds on the people’s undying thirst for easy, instant, and convenient. More often than not, it also causes them a lot of trouble—financial trouble through credit card debt—that is.

 

Credit Card convenience vs. Credit Card debt

 

We often see people pull out “plastic” to pay for everything they need. Why not? When all it takes is a quick swipe of the card through a little electronic box and a signature then, everything’s okay. You go home happy, content, and almost worry-free. On the other hand, not every one of these people realize that the convenience of using credit cards can lead to a false feeling of financial security. And this realization will strike them as soon as the bills arrive.

 

In fact, studies show that credit card debt and personal bankruptcies have increases bank profits to the highest level in the last five years. It only shows that more and more credit card holders were unable to manage their finances that lead to credit card debt. If you are a cardholder and having some credit card debt troubles at this early stage, it’ now time to think over the possible outcomes of this minor glitch so that a more serious problem with credit card debt would cease to arise.

Credit card gives people the feeling of invincibility. And it also gives them tons of uncertainty about their financial management capability when they encounter problems with their credit card debt. Although it is true that that credit cards solve financial matters especially when it comes to safety and convenience, credit cards also creates hassle especially when the person using it doesn’t know what you he or she’s getting into.

 

Indeed, paying off credit card debt may take a long time especially if the person has high interest rates. But, it doesn’t mean that you can do nothing about efficient management of credit card debt. When you find yourself overwhelmed with credit card debt, don’t fall into a pit of depression. You can get through it with discipline and a change in spending patterns. Start eliminating problems with credit card debt by getting tips and techniques on how to pay off your balances easier, how to consolidate of frequently encountered problems, look for free debt consultation agencies that can help you, and try—inch by inch—to rediscover ways on how you can regain your financial freedom by reducing you credit card debt.

 

The power to eliminate credit card debt

 

People who are having problems managing their credit card debt or those who are near in bankruptcy often don’t realize that the power to eliminate their credit card debt troubles totally is in their hands. Today, more and more Americans need credit card debt help badly. The main problem is that these families are having difficult times paying high interest for credit card debt. And instead of lifting the burden of credit card debt, more people are paying much in interest every month than that of the actual expenditure.

 

There are actually more lawful and moral ways to zero-out thousands of dollars in credit card debts. And if you only take the time to research and know your rights and how bankruptcy laws have changed, you will discover that there are valuable facts to eliminate credit card debt. Actually, the possibility of reducing or eliminating the high interest credit card debt is now more possible when a person takes action to get his or her finances back on track.

 

Apart from knowing your weapon in terminating credit card debt, it is very important that you develop a sense of control and perseverance first. Since credit card debt elimination process requires organization, clarity, and commitment to your own growth, it is a must that you are ready for the responsibility and to stand free and independent.

 

For those people who consider having a credit card indispensable but afraid of getting one because of the possibility of credit card debt nightmare, you must remember that credit card can be a powerful tool in managing your finances but there will always be glitches when not used properly. Of course, there are countless reasons why you should and shouldn’t get one depending on your needs. Whether you decide to get one or not, managing finances it still takes a sense of good budgeting, willingness to change spending habits, and the humility to avail low interest consolidation loans when you are already burdened by too much credit card debt.