Bad Credit Loans, Bad Credit Home Loans – Bad Credit Finance Australia

According to Standard and Poor’s, the number of Australian residential mortgages which fell by more than 30 days into arrears surged in January 2010.

The ratings service found home loans more than 30 days in arrears  jumped to 1.39 per cent in January, from 1.25 per cent in December 2009.

The company’s credit analyst Vera Chaplin attributed the surge in arrears to the five interest rate hikes since October last year.

According to Ms Chaplin, the effects of the last five rate increases are finally starting to be felt by residential borrowers. They have also seemed to have contributed to the slowing of property prices over the recent few weeks.

Sub-prime RMBS arrears also increased in January, rising 0.51 percentage points to 12.08 per cent.

With International Monetary Fund predicting rate increases by another 75 points before the end of 2010, this trend is only likely to continue.

The housing shortage in Australia is increasing exponentially, doubling over the past year.

We should be creating at least 20% more homes than we are doing today in order to have a reasonable supply.

A recent report by the Federal Government Housing Supply council expects the shortage to be at an all time high of 200,000 by the end of the year.

The greatest shortages are experienced in NSW and Queensland – 60,000 approximately.  The shortage in Voctoria is about 22,000.

By 2029 Australia’s shortfall is expected to be 640,000 homes.

As expected, those on low incomes bear the brunt of this shortage,  with more than 160,000 households paying more than half their income on housing repayments and 170,000 paying more than half their income on rent.

The report found that construction costs are far higher in the city than in the country. On average a new two-bedroom unit in Melbourne’s existing suburbs costs almost half a million dollars – about $100,000 more than a three-bedroom house on the city’s fringes.

The high costs of units in existing suburbs was a trend repeated across most capitals except Sydney, where a new house on the city’s fringe was a fraction more expensive.

Community opposition to new developments in the suburbs is adding massive delays and costs to the creating of new homes.

Interestingly enough,  a large proportion of Australian homes are empty. One in 10 homes are unoccupied and  a quarter of these were holiday homes.

Clearly there is a significant gap between the haves and the have-nots, with some people owning several properties and others not even being able to afford the rental of one.

Most Australian have no awareness that it is not possible to borrow more than 80% of the purchase price of the home you are looking to buy if you have some history of bad credit.  On a daily basis dozens of applications are received by us from people looking for a No deposit home loan or a ‘better still’ 110% Home Loan.

Tirelessly our staff respond that if you have any history of bad credit 5% deposit will not do.

Unfortunately, given the current trend of real-estate prices, it is becoming next-to-impossible for people to put together a 20% deposit.  If you are one of these people it may be an idea to seek help from your family and purchase something smaller as an investment first.  Once your investment grows in value, you can sell, refund the family loan, and try to purchase something for yourself.

Some people are purchasing jointly with friends or family.  It is easier to put together 20% when there are 2 or 3 of you.

The main thing is not to lose hope – there is a Bad Credit Home Loan out there for you – you may just need to look a little longer.

John Symond,  CEO of Aussie Home Loans has warned the RBA not to raise rates again in May, stating that another increase could lead to problems in the housing market.

The Aussie chief expressed concern that a sixth increase in a row would seriously hurt consumers and lead to a further drop in home loans taken out.

“The retail sector is already suffering as a result of interest rate increases.

“There are a lot of signals suggesting that this economy will slow down and the RBA has to be very careful.”

According to Mr Symond, the RBA needs to take into account the state of the global economy when the board meets next month.

“Outside of Asia, it’s still a basket case,” he said, adding that the RBA has “a lot of reason to show caution at the moment”.

However the Chief Economist with NAB,  Alan Oster, is predicting the cash rate to increase again in May, taking the official interest rate to 4.5 per cent.

Aussies are carrying a very high level of household debt.  With property prices growing, home loans are higher than ever before, additionally most people are struggling with personal loans, credit cards and other debts.

A calculation by the RBA suggests that the total current level of mortgage debt in Australia is 38.2 per cent bigger than national household income, with rapid growth over the second half of last year likely to have been driven by the Government’s incentives to first-home buyers.

Household debt has been fast increasing over the past 20 years, but the financial crisis brought a temporary halt, The Australian reported.

Mortgage Debt had risen to 35.8 per cent more than income in March 2008, but then started receding as the Reserve Bank lifted rates and consumer confidence fell. By this time in 2009, the level of debt had dropped back to 33 per cent more than income.

While households are being encouraged to borrow by rising property values, the RBA figures show that, at the end of 2009, there was still a long way to go before households made up ground lost during the global financial crisis.

The total value of household assets, including housing, superannuation and share portfolios, had risen from a multiple of 6.5 times income to 7.2 times income, which was a level last achieved in 2004.

Rising interest costs are also starting to affect household finances, taking 10.6 per cent of disposable income in the December quarter, compared with a low of 9.6 per cent in the June quarter.

HIA relased some figures yesterday pointing to the growth in land prices being the main contributor to property value increases across the country.

The average cost of a block of land rose 14 per cent last year to $185,222, the fastest growth since 2004.

While home prices are going up, the volume of land being sold is falling, dropping 4.6 per cent in the December quarter, compared with a year previously.

According to a recent survey, Australians are more carefull in taking on additional debt.  People are showing reluctance to use credit cards and other forms of credit unnecessarily.  This is despite an overall sign of improved consumer confidence.

Recent data from the Reserve Bank of Australia (RBA) showed the total value of transactions on credit and charge cards rose 6.05 per cent in February.

The average credit card account balance increased by 1.9 per cent to $3,250 in February and it was 3.29 per cent higher than a year earlier.

Australians remain confident about the economic outlook despite two interest rate rises by the RBA in 2010, the Westpac-Melbourne Institute consumer sentiment survey for April said this week.

Consumers are showing preference for the use of debit cards rather than credit cards.  People prefer to use their own money when they can.

Since the onset of the Global Financial Crisis, consumers are opting not to take on debts whenever they can avoid it.

(14 April 2010 – Australia) The Reserve Bank of Australia has released its latest credit card and charge cards statistics, revealing consumers clocked up a further A$1.04 billion in credit card debt in February.

The total value of credit and charge card transactions, including advances, rose by 6.05 percent in February, with Australians increasing their spending from A$17.18 billion in January to A$18.22 billion in February.

Total credit and charge card balances outstanding increased by 2.1 percent from A$46.152 billion in January, contributing to an overall rise of 5.18 percent over the last 12 months.

In January the average credit card account balance sat at A$3,189, that has now increased 1.9 percent to A$3,250, 3.29 percent higher than a year earlier.

Not surprisingly credit and charge card repayments dropped by 4.7 percent from January to February settling in at the new balance of A$17.716 billion.

Repayments in February were up by 5.5 percent from a year earlier.

read full story

Loan arrears on prime residential mortgage backed securitization (RMBS) hit a two year low over the December quarter, according to rating agency Standard & Poor’s.

The agency’s latest report found that RMBS loan arrears fell from 1.85 per cent in January last year to 1.35 per cent in the December 2009 quarter.

Meanwhile, subprime RMBS increased by 0.08 per cent to 11.57 over cent over the same period.

According to a statement by Standard & Poor’s, further arrears are expected on the back of future interest rate increases, as well as other economic factors.

“Some borrowers remain vulnerable to economic factors such as job losses, reduction in disposable income as a result of reduced work hours, and rising interest rates,” the statement read.

read full story

Women have been urged to tackle the issue of “money conflicts” in their relationships after a survey found 19% of women do not totally trust their partner with shared finances.

The survey of 1,000 male and female respondents was conducted by Pure Profile for Westpac’s Women’s Markets division in time for International Women’s Day.

The survey revealed women largely have greater control over household finances, with 47% of women saying they controlled joint savings accounts (compared to 24% of men) and 36% reporting they have “more control” over the way money in managed (compared to 31% of men).

However, improved control doesn’t appear to be leading to improved relationships where money is concerned.

Both 47% of men and women said they argued with their partners over money, and 47% of women also said they believed their partner wasted money, compared to 40% of men.

Westpac’s Head of Women’s Markets, Larke Riemer, says women are more financially savvy than ever, and had quickly readjusted family budgets during the global financial crisis to ensure household budgets remained robust.

But she said women need to do more to avoid fights over money.

“Women are savvier than ever about money – they are more aware of how they can use it to achieve their goals. We want to see women using their financial know-how to avoid arguments.”

Money conflicts appear to be worst in Queensland, where 54% of female respondents said their partner wastes money, and 53% of women reported money-related arguments.

read full story

The founder of Refund Home Loans, Wayne Ormond, has been slammed by Australian Competition and Consumer Commission chairman Graeme Samuels after Ormond admitted that statements made to franchisees about a supposed agreement with the ACCC were false and misleading.

The Federal Court found Ormond had breached the Trade Practices Act after telling franchisees that the ACCC had approved the way Refund was dealing with franchisees.

“Mate, I’ve had meetings with Graeme Samuel himself. I have nothing to worry about,” Ormond told franchisees, according to the ACCC.

But Ormond has now admitted the statements were false and misleading and Samuels is clearly unimpressed of the use of the watchdog’s name.

“Using the name of the ACCC or individual ACCC officers as a means of discouraging franchisees from exploring their own legal rights is reprehensible,” he said in a statement.

“Franchisors and franchisees have a special business relationship. Franchisees trust their franchisor to provide honest and reliable information as to their own business and about franchising generally and to mislead them in this manner is an abuse of trust.”

Samuels has emphasised that the “does not, in any circumstances, approve individual conduct”.

Refund Home Loans, which was ranked 43 on SmartCompany’s Smart50 list in 2009, has grown quickly in the last few years, with average annual revenue growth of 42.5% over the past three years and revenue of $15.5 million in 2008-09.

read full story