Good Debt V’s Bad Debt – What’s the Difference?

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?

Good 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.

Continue reading Good Debt V’s Bad Debt – What’s the Difference?

Why you should consider a Home Loan Health Check!

Within the home loan industry there are numerous offers to provide a review of your current loans, whether they call it a “Home Loan Health Check”, “Loan Review”, or similar.

What does this mean? Continue reading Why you should consider a Home Loan Health Check!

6 Ways to Repay your Home Loan Sooner

There are many different strategies to repaying your loan back quicker than the approved term, but none of them include a “magic fairy” that miraculously repays large amounts off your loan!

The cold hard facts are that to repay your loan back quickly requires you to in some way or form utilise more of your disposable income to the benefit of your loan.

Six of these strategies are:

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Fixed V’s Variable Interest Rates – Pro’s and Con’s

With Australia currently enjoying historically low interest rates there are many borrowers asking themselves “should I fix the interest rate on my home loan?”

Indeed at many social functions the topic of interest rates is often raised and it seems that there are many views and opinions on the best strategy, which just adds to the confusion for many of us. Continue reading Fixed V’s Variable Interest Rates – Pro’s and Con’s

Interest Only Loans – Time Bomb or Hiccup?

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.

The appetite for interest only lending has diminished significantly and through pricing and policy banks are encouraging borrowers to consider principal and interest repayment options. Continue reading Interest Only Loans – Time Bomb or Hiccup?

The Five Step Savings Plan for First Home Buyers

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?

Continue reading The Five Step Savings Plan for First Home Buyers

Investment Loans – Banks tighten loan criteria

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

Does 1% p.a. make a difference?

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.

Continue reading Does 1% p.a. make a difference?

Why use a Mortgage Broker?

Mortgage Brokers (also often referred to as Finance Brokers, Mortgage Planners or Credit Advisers) act as an intermediary between lenders and borrowers to negotiate loan facilities.

Over the last 10 – 15 years the usage of Mortgage Brokers in Australia has increased consistently and it is now estimated that approximately 1 in every 2 new home loans in Australia is sourced through a Mortgage Broker.

So why do so many borrowers utilise a Broker rather than going to their local Bank? Some of the benefits and reasons include:

Continue reading Why use a Mortgage Broker?