As property prices rise over time purchasing in a centrally-located or sought-after area is out of reach for the average working millennial. Instead, many are opting to rent rather than buy as it means not having to compromise their inner city or beachside lifestyle. But for those who are still eager to enter the market, there is a way to get the best of both worlds. Continue reading Rentvesting – enter the property market without sacrificing your lifestyle
The mortgage industry is a wide, wondrous world with a language all of its own. One of the many acronyms bandied about is ‘LVR’, which stands for ‘loan-to-valuation ratio’. Here’s what it means. Continue reading What is LVR?
Within financial circles many advisers and commentators regularly talk about the negative aspects of bad debt and positive approaches to good debt.
But to many the difference is a mystery – isn’t debt just debt?
Lets first consider what good debt is. Good debt is referred to as that debt that assists in building net worth through either income and / or the holding of an asset that will appreciate in value. This type of debt could also often be tax deductible.
Over recent months it has been very noticeable that banks have been increasing interest rates and tightening credit policy for interest only loans, regardless of whether they are for Investment or Owner Occupation.
Getting into the property market and buying your first home can seem like an impossible task to many. Saving the deposit seems like a big ask, then you need to consider Stamp Duty and other purchase costs that just require even more savings!
Getting the deposit together takes discipline, but the rewards are great if you can manage your money effectively.
So what are the steps a future first home buyers should be doing to achieve their goal?
In mid 2015 we highlighted through this Blog that Banks were tightening credit policy in regards to investment lending and that had resulted in tightening of lending criteria.
This was initially due to communications from APRA to all Approved Deposit-taking Institutions (ADI’s) about expectations of a range of measures to reinforce sound residential mortgage lending practices. An ADI is basically a bank, credit union or building society. APRA’s expectation was that ADI’s maintain growth in investment lending portfolios to below 10%. Those communications quickly lead to Bank’s: Continue reading Investment Loans – Banks tighten loan criteria
As a general statement Australians tend to be lethargic in reviewing their Home Loan once it has settled. It generally takes another ‘trigger’ event, such as changing homes or renovating before we consider if there is a better loan option available.
Does this mean that many Australians are paying more interest on their home loans than they need to? I would say in many cases this is definitely the case.
So lets consider a hypothetical couple called Bill & Beth.