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Home Ownership

How NOT to Apply for a Home Loan


Home loan

Here’s the scenario: you’ve just watched a home improvement show, and you’re not only feeling confident about your DIY skills (even though you’ve not touched a power tool in years), butyou’re ready to march out and buy a home. You’ve cruised the listings that Google provided you, and already have a home just around the corner picked out.

That’s a great start – we applaud your determination. Now, let’s work on getting you a home loan, since you probably don’t have all the cash available under the mattress.  Here are 5 things not to do to get started.

Have no deposit

Most lenders require you to have at least 20 per cent deposit for a first home approval, and depending on your credit history or the home price, some require a deposit of up to 30 per cent. Home loans with a deposit below 20 per cent, normally requires you to pay Lenders Mortgage Insurance (LMI), which just adds to what will already be a large mortgage payment each month. 

Have lots of outstanding debt

Lenders like to see that you can make your repayments. This means you should not have outstanding debts, like credit cards or personal loans that can affect your borrow-ability. Be prepared to supply bank details and income information that proves you are not trying to live beyond your means.

Don’t check your credit history

If you don’t know your credit history, it can’t hurt you – right?  Wrong: your credit will be one of the first things a lender checks, and if you don’t know what you’re up against, how can you defend yourself?  It is always a good idea to do a history check and look for any mistakes or items that you can fix. 

Quit your job

You’re probably thinking about quitting your job, since you’ll have all those DIY projects to work on. That isn’t the best idea, if you want the bank to give you a loan; banks want to see a consistent and steady income level, and if you have no proof of how you’ll support yourself without a salary, then you will not be going home with a cheque.

Don’t worry about the responsibilities of homeownership

Home ownership looks glorious on TV, so there is nothing to worry about, right?  Not exactly. Owning a home is not just a major lifestyle change – it is also quite a major responsibility, because you could end up in court or bankrupt if you can’t keep up with your payments.

For more information on how you can maximize your chances of securing a home loan, speak to a mortgage broker, such a Mortgage Choice, to help you find the right loan for your personal circumstances.

Home Ownership

Choosing the Best Theme and Twinkle Christmas Mini Lights

Christmas lights always liven up the occasion regardless of the kind of decoration. They can bring the festive mood to any indoor or outdoor environment. Christmas is not complete without an array of decorative lighting fixtures. They come in various colours and sizes and can decorate windows, rooftops, trees and patios.

There is a variety of Christmas mini lights in the market. It is advisable to get your hands on them now before they run out of stock during the Christmas season. It is also important to choose mini lights with the best features for your Christmas decorations. You can find a wide variety of quality lights here

Colour is very important when choosing decorative lights. Christmas mini lights come in a variety of colours. You can choose a single colour on an entire string of lights or a combination of various colours on the same string. The different colours can brighten up a Christmas tree even with very few tree decorations. If you want white crystal lights, keep in mind that when you are decorating outdoors during winter, they will look more like frost than festive lighting.

The Christmas mini lights come in a fixed number of lights on every string. If you are decorating the exterior of your home, choose strings with more than a hundred light count so you do not have to put up many strings. You also get great deals for buying long strings than many short strings.

One important thing you need to be very keen on is the bulb technology used. The best Christmas lights bulb technology prevents the entire string of lights from going out if one bulb goes out. You do not have to go through the trouble of bringing down the lighting fixtures as you can just replace the single faulty bulb.

Choose mini lights that can also operate on a variety of lighting patterns. You have the option of chase lights or twinkle lights for that extra touch. You may need to purchase lighting controllers along with these lights to operate different lighting patterns. Animated lights are very impressive and the kids will love it! It’s never too early to start.

Home Ownership

Avoid Downsizing Through Equity Release

When your children have left home and you no longer need quite such a big family home, it can be tempting to downsize and move somewhere smaller, which is cheaper to run and maintain, and this also allows you to access some of the value held in your family home.

However, it’s not something you should rush into. Many people have followed this course and then regretted their decision because of the disadvantages of moving home at this stage of life. While you are able to actualise some value from your home, you often have to move to a different area, and you may lose the network that you have established during the years you were raising a family. This can be more isolating than people might think, and it’s hard to start finding new friends when you’re older.

One way to stay where you are, but to increase your income is to take in lodgers. This can be a great solution for people who enjoy the company of others, but for some people, it may feel like an invasion of their privacy. You have to be ready to adjust to share your home with other people.

Something that more and more older people are turning to as an alternative is equity release. This is where you can access some of the financial value held in your home without having to leave it. You can find out about cheap equity release schemes at Age Partnership, an independent company that searches the equity release market for the best available deals for its customers.

It has become a popular choice in recent years due to the increase in the value of property across the board. To find out how much equity you could access from your home, use the types of equity release calculator at Age Partnership.

Equity release may not be suitable for everyone, so before going ahead with a policy, make sure you get some independent financial advice first.

Home Ownership

5 Reasons Homeowners Should Consider Refinancing

One of the best features about mortgages is that a homeowner does not have to live with the same one forever. Even though the original mortgage came with a long term 30 year commitment, the most common length of mortgage, a homeowner can turn it in for better terms. At a time when mortgage rates are low, which is happening right now, there are 5 reasons that homeowners should consider refinancing.

1. Low mortgage rates are in place and have never been better. Homeowners need to consider the fact that once rates rise, they may never fall this low again. For at least a year, rates have bounced around historical lows which has set new records. With this in mind, anyone who has a higher mortgage rate should take advantage of a rare opportunity to move to lower rates. Homeowners who are interested in a lower monthly mortgage payment can refinance to the same terms that they currently have, but at a lower rate. Although this will return the loan to the original term, such as 30 years, the lower monthly payments will instantly put more cash in the hands of the homeowner which they can use for other expenses.

2. When mortgage rates are low, it gives the homeowner more options to work with. Another solution for homeowners is to reduce the term of the loan. When going from a 30 year mortgage to a 15 year mortgage, the amount of time that the loan is active is shortened. Since 15 year mortgage rates are even lower than 30 year rates, the mortgage payment could possibly be equal to the current payment or, in some cases, even slightly less. The benefits of doing this type of refinance is that the mortgage is paid off faster, the overall interest paid is significantly less and the homeowner ultimately grows equity at a faster pace. For this reason, refinancing to a 15 year mortgage has become very popular in recent years.

3. There has never been a better time to move from an ARM to a fixed rate product. Many homeowners opted for an adjustable rate mortgage in the past when rates were higher. Now that rates are low, it is the ideal time to refinance to a low fixed rate mortgage. The fixed rate mortgage offers a homeowner stability because the rate never changes and security because the mortgage payment remains the same throughout the life of the loan.

4. Many long term homeowners have accumulated equity in their homes over the years of paying their mortgage. In recent years, the interest charged on credit cards has increased significantly. The cash out refinance is often used for debt consolidation which ultimately combines all of these payments into one monthly payment. There is usually a significant amount of money that can be saved each month by doing this type of refinance. In other cases, the cash out refinance is used for home improvements instead of obtaining a home equity loan which usually has a higher rate. It doesn’t really matter what the need is, as long as the equity is there, the cash out refinance is a way to use the equity as cash at the lowest rate of interest available today.

5. For diligent homeowners, refinancing can be used as a savings tool. When the new mortgage payment is lower, some homeowners will put away the savings each month. The accumulated savings can be used for other things, such as financial planning. However, the savings can also be used at some point to make a principal payment on the mortgage which will reduce the years and total interest due on the loan. This is usually done when a homeowner opts for the longer term loan which reduces the monthly mortgage payment. The longer term loan is then reduced with each payment made to the principal amount. Even though many homeowners feel secure with the lower monthly payment, they can still shorten the term by making payments to the principal.

Since refinancing is a financial decision, homeowners must take into account that there are costs involved. For those who will be staying in the home for a short period of time, refinancing may not be the best idea. For the long term homeowner, it is definitely something that should be considered. To determine the best option available, it is always wise to compare both the long term and short term loan. Lenders can easily give a homeowner a Good Faith Estimate for both types of loans which will show all of the costs, as well as, the estimated monthly payments. When looking at it in black and white, always remember what the original goals are for choosing to refinance.

Rosemary has been writing since 2010 for, a company that matches consumers with banks and lenders offering low mortgage rates. Previous to her writing career, Rosemary spent 13 years working hands-on in the mortgage industry as a mortgage loan analyst, mortgage processor, property manager, and a mortgage underwriter.

Home Ownership

First Home Buyer Grants: Find out What May Be Available to You

home buyerIf you’re looking to buy your first home, there are some helpful financial incentives available from the Australian government that you can take advantage of. Buying your first home has significant cost outlays, so it pays to understand exactly what you may be entitled to. The Victorian state government offers several incentives to first home buyers. Keep reading to find out about the various grants, bonuses and boosts that you may be able to take advantage of when you’re ready to get into your first home.

It always pays for first home buyers to seek advice from an official government website about exactly what is available to them in the way of government incentives. Australia has a huge number of mortgage providers so it always helps to shop around. It’s often easiest to call up a mortgage broker such as Smartline and get them to do the work for you.

Recent Stamp Duty Changes

Before we get into what government grants are available to first-home buyers in Victoria, it may help to understand the recent changes that took place in early 2013 regarding stamp duty costs, and any other changes that have been set out for 2014 and beyond. The great news is that the Victorian government is offering significant discounts for first home buyers looking to enter the property market in 2013. The discount on stamp duty costs is increasing from 20 percent in 2012 to 30 percent in 2013 for any home with a value of up to $600,000. A buyer looking at a $600,000 home can benefit from a savings of up to $3,000 on stamp duty costs. Combine this with the first-home-owner grant of $7,000 and you can save $10,000 on the purchase of your new build.

This good news is set to only get better. In early 2014, the stamp duty discount is due to increase to 40 percent, and in September 2014 it is set to increase to 50 percent. It seems that now might be the right time to look at entering the Victorian property market. What’s even better is that this discount applies not only to used homes but also to new build house and land packages.

First Home Owner Grant

The First Home Owner Grant is designed to assist those trying to get their foot onto the property ladder. The grant consists of a $7,000 lump-sum payment to those who are eligible. Candidates are not means-tested and the grant is available to buyers looking to spend up to a maximum of $750,000. The grant can be used to purchase a used home or a new build home.

There are eligibility criteria that must be met for the First Home Owner Grant. The basic eligibility criteria are as follows.

  • The buyer must not have received a grant in any other state or territory of Australia.
  • The buyer must not have owned any residential property prior to 1 July 2000.
  • The buyer cannot be acting as a company, and must be at least 18 years of age.
  • The buyer must be a permanent resident or Australian citizen.
  • The buyer must occupy the home as their primary residence for a period of at least six months.

There are numerous criteria exemptions for specific circumstances that the Commissioner of State Revenue has the authority to waiver or rule on, and each application for the First Home Owner Grant is taken on an individual basis.

Other Types of Government Incentives

Each state or territory in Australia offers their own specific first home buyer incentives, and each can differ in the amount given, the eligibility criteria and how the grant can be used. Originally introduced 1 July 2000, these grants were designed to offset the effects of GST on buying a home, and help people get onto the property ladder. It is a national scheme that is directed and funded separately by each state or territory. Some states offer various other grants, bonuses and boosts designed to help first home buyers purchase house and land packages. However, not all states offer these extra incentives. Those that do can be subject to change at any time. It always pays for first home buyers to seek advice from an official government website about exactly what is available to them in the way of government incentives.

About the Author: This article was submitted by Andrew Davis. Andrew has been selling home and land packages in Victoria for the past 4 years and writes regularly for various sites and publications. For more information about Elmswood Estate you can visit the website.

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