Aug 9

There has been a drop to a nine year low in Australia’s home loan commitments during June 2010.

While Home Loan commitments for owner-occupiers fell 3.9 per cent in June, almost twice the market forecast of 2 per cent,  the total value of housing finance fell by 1.9% seasonally adjusted, to $20.710 billion.

Our housing market is finally beginning to show some cracks under the weight of ongoing price increases and interest rate boosts.

We are not seeing as many investors in the market with people choosing the ‘wait and see’ approach instead.

Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.

The ABS said finance for construction projects also dropped 5% during June 2010. There is indication of overall deterioration in the property market and especially the residential housing sector.

We will no longer be able to rely on the housing sector to prop up the Australian economy. Undoubtedly this was one of the factors which led to RBA leaving rates on hold last week.

Aug 5
Mortgage refinance can provide you with a multitude of benefits with a cheaper interest rate being only one of these. However when deciding to make the plunge you should be aware of all the risks, costs, and implications.
While often refinancing your mortgage makes perfect sense, sometimes all is not what it seems on the surface. If your current lender’s interest rate is higher than its competitors, for instance, or you need to access cash to finance renovations, investments or your child’s education, then refinancing is a great way to tap into your equity.
However, you need to enter the process fully aware of whats in store, as there are many factors that can influence the outcome of a refinancing application.
Before you get stuck in a legally binding contract to move your mortgage to another lender, make sure you carefully answer the following questions:
Has your income, asset and debt position changed?
If your income has changed for any reason since your previous application, you may not have the same borrowing power today as you did when you applied for your existing loan. Perhaps you are currently on maternity leave, have recently changed jobs or employment industries. Financial factors that can impact your borrowing power include: moving from full time to part-time or casual employment; starting a new business, so you’re now self-employed; increasing your personal debts, such as credit cards or car loans; and/or losing an income temporarily to have a baby.
Reasons for Mortgage Refinance
If your personal debts such as credit cards and personal loans have escalated, and you wish to refinance so you can consolidate them into your mortgage, make sure that you understand what you are saving. “People usually ‘bundle’ to reduce their monthly commitment, rather than to pay down the debt more quickly. Refinancing your debts into your mortgage will reduced your monthly repayment but will increase the period over which you will be repaying your mortgage.
Have you considered mortgage exit fees?
Lenders don’t want you to refinance your mortgage to another lender, and they can financially punish you for doing so. Make sure you check your loan contract carefully: early exit fees, pre-payment penalties and deferred establishment fees can equate to thousands of dollars, which can cancel out any benefits you’ll receive by refinancing.
Has your credit rating changed ?
If your credit history has changed due to outstanding debts or financial difficulties that you’ve experienced since you were approved for your current mortgage, you may have trouble refinancing your home loan to a bank or a traditional lender. Bad Credit Lenders invariably charge a little more in terms of rates and fees. It’s best to do a credit check prior to applying elsewhere; order a free copy of your credit profile at www.mycreditfile.com.au
Aug 4

Mark Bouris, the chairman of Yellow Brick Road and the former founder of Wizard Home Loans believes that the federal government should return to a Seventies-style homeowners’ rebate.

Mark Bouris, is confident that such assistance would do a lot to help out struggling home owners to stay in their home. It is effectively a reward for not caving in to interest rate pressure. A rebate of up to $1500 which is means tested would go a long way in assisting to lower income home owners.

While measures such as the First Home Owners Grant only inflate property prices and puts money in the pocket of developers and banks,” said Bouris, a means-tested rebate, would not have the same effect, by limiting pricing distortions and rewarding those who are paying their mortgages, rather than it just being a gift.”

Bouris added that the rebate could be a temporary measure, and could help mitigate the effects of likely interest rate rises by banks due to the price of wholesale funding.

Aug 3
RBA leaves rates at 4.5%
icon1 admin | icon2 Economy, Property | icon4 08 3rd, 2010| icon3Comments Off

The Reserve Bank of Australia has just announced that rates will remain at 4.5% . This decision was widely anticipated by economists following the release of lower than expected inflation figures last week.

The Consumer Price Index (CPI) rose 3.1 per cent in the year to June quarter, slightly over the RBA’s target level of 2-3 per cent.

RBA is comfortable that interest rates are now approximately where they should be and in in line with economic indicators.

In addition to the CPI figures, uncertain conditions in Europe have also forced the RBA to hold rates.

Aug 2

According to a new Australian Banking Consumer Recommendation & Loyalty Survey, people who do their banking through second-tier banks are happier with their banks than those with one of the four big banks.

The survey actually revealed that Bank of Queensland and Bendigo Bank are the most popular banks with consumers.

The survey ranks organisations based on more than 6690 consumer responses, and assigned a positive or negative score depending on customer experience. Out of the nine banks included in the survey, only three – Bank of Queensland, Bendigo Bank and Suncorp – achieved positive ratings.

Naturally questions were asked about all the different products and services offered by the banks and consumer experiences with these.

The survey results demonstrated that overall bank customers continue to be disappointed with experiences provided by the large Australian banks.

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