propertyinvestmentiq.com.au

It’s not often you hear nice news like this from a lender!  HomeSide (NAB’s Broker Channel Lender) will provide a repayment holiday if a customer needs it for personal reasons such as to study or take maternity leave. There’s a slight catch of course. You have to be ahead on your loan payments. But many borrowers are and could take advantage of this. Here is the release from HomeSide if this interests you.

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We are in the middle of a credit squeeze and it’s resulting in lenders declining a significantly higher number of mortgage loan applications. Here are some tips on increasing your chances of having a loan application approved.

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“The point is that if you have a Low Doc loan, now is the time to see if it can be converted to Full Doc, while interest rates are relatively low.”

Many self-employed borrowers used Low Doc loans when credit was easy. Instead of providing Financial Accounts and Tax Returns all you had to do was self-declare your pre-tax business income. In my mind the provision of Low Doc loans by all the major banks at the same interest rates that applied to Full Doc loans was recognition  by the lenders of the fact that self-employed people ‘live’ through their businesses to some extent and are generally responsible enough not to enter into any financial commitment they can’t meet.

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It seems sensible to convert Variable Rate loans to Fixed Rate in a low interest rate environment. It certainly seems more sensible Fixing at around 6% now compared to Fixing at around 9% last year!

However the problem with Fixed Rate loans is that when a bank offers, for example, a 5 Year Fixed Rate of 6.5% it has calculated (as best its economists can) that the AVERAGE Variable Rate over that 5 year period will be lower than the Fixed Rate they are offering.

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