What Is A Mortgage?

Written by Investment-Mortgages on August 21, 2011 — 2 Comments

A mortgage is a loan or finance structure to lend money secured against a property. The most common form of a mortgage loan is a residential loan against a property. This is usually an owner occupier loan where the person taking the mortgage will be living in the property. A bank or money manager would lend the money needed to purchase the property.

How it a mortgage works:

A bank or lending institution will write up an agreement to have an ownership interest in the said property in return for lending the money to the would be home owner or borrower.

The agreement or mortgage will have an interest rate attached to the loan. This interest rate is the banks “payback” or income in return for the lending of the principal amount. The home owner id responsible for paying back over an agreed time frame payments incorporating an amount of principal and interest repayments. This would effectively mean the loan gets fully paid off over time with full ownership being transferred to the borrower or home-owner.

Different types of mortgages:

Interest Only. This is where you have a principal amount that does not change and you do not pay back. You payments are purely on the interest component and this is just to keep the loan maintained. At the end of a thirty year period you would still owe the same amount at the start. The repayments are usually lower as the principal amount is not included. Property investors use these types of mortgages predominantly as the full payment is tax deductible in several structures like in Australia.

 

Principal and interest. This type of loan is the standard mortgage type. This means you would end up paying off the whole amount of debt of the life of the loan made up of both types of payments. At the start of the repayment term your payments are mostly interest with the rest made up of principal. Over time as you slowly pay back the principal, the interest payments reduce proportionally. This then allows your payments to slowly gear towards more principal amounts being paid off. At the end of the loan the majority of your repayments would be principal. This is a sure way to have no debt at the end of the loan term.

 

How To Find The Right Mortgage:

You can either go direct to a bank or lending institution yourself or have a qualified mortgage broker do the legwork for you. Either way its worth knowing the basics before hand so you know the important points to look out for and ensure you are getting the best property loan for your situation.

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Is A Refinance On Your Mortgage Needed

Written by Investment-Mortgages on August 4, 2011 — 1 Comment

When you first applied and got your home loans or investment loan you might have had a completely different set of circumstances to now.

Do you find yourself asking:

  • Am i paying too many fees?
  • Is my interest rate too high?
  • Can i get out of this loan as i know there is a better one?
  • Can i draw some equity out of my loan?

If you ever asked any of these, its worth a simple question to your local mortgage broker or your bank manager about your current home loan.
Its free to have a health check on your mortgage and see if there are any obvious saving to be made.
This could be as simple as combining your credit card with your home loan to use your cash flow for paying the bills later saving credit card interest.

Most mortgage brokers and all bank managers will have a mortgage payment calculator of some kind that can help you work out you budget or cash-flow projections.
This is fairly important to be able to work out what you can afford and how much you will be able to borrow in the future. The key to this exercise is being conservative, not overestimating what you may earn and not underestimating what your expenses are. Being left short with a loan you are legally obliged to pay is not a great start.

If you also decided to move homes or buy an investment property you might need to refinance to be able to draw out some equity to fund your next purchase. You current property may have grown in value enough for you to complete an equity redraw and use this capital to purchase another property or even transfer the borrowing power you have to another property. Effectively getting a new mortgage.

If you are unsure about your home loan options contact a qualified local mortgage broker to talk it through

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Accurately Calculate Your Property Loan Repayments

Written by Investment-Mortgages on July 21, 2011 — 1 Comment

Are Your Mortgage Repayments What They Thought

Mortgage repayment amounts are one of the most common questions when it comes to a property loan or home mortgage. Being able to accurately calculate your repayments is vital and very important to estimate your cash flow once you secure the investment loan.
You need the right figures to be able to set your budget so using a good mortgage repayment calculator is the fastest way to get some sums going.
You need to add up as many bills as possible so you don’t find yourself short.

Here is a short checklist of some possibles

Expenses:
Credit card repayments (this debt could also be wrapped up in the new property loan)
Food and living expenses
Vehicle repayments and running expenses
Rates and water bills if these exist
Rent repayments if you don’t currently own
Insurance payments
Schooling fees for your children if applicable
Current home loan repayments for personal or investment debt

All your income should be tallied up also

Income:
Your personal income
Your shares dividends payments
Interest earned in savings accounts
Rental income if you own investment property

 

Once you have the expenses and income, whats left over when you subtract one from the other is your left over income, or the money left over to contribute to a new loan and its repayments.

A qualified mortgage broker can assist you in working all of this out and ensuring its all accurate down to the last dollar.
An experienced mortgage broker will have software to do this most probably as a mortgage calculator.

Contact us if you need help in applying and sourcing your next home loan in Australia

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Let A Mortgage Broker Help Your Tricky Loan

Written by Investment-Mortgages on July 19, 2011 — 1 Comment

The Experienced Services a Mortgage Broker Can Offer

Mortgage Brokers Australia wide are a great source for advise and knowledge when it comes to home loans and mortgage finance.

What’s really important is have someone you trust to share ideas and show you the best options for you personal loan and mortgage needs. This advise is really important and you must always make sure you only listen to a finance professional.

A mortgage is a big commitment and can be one of the most important debt commitment most people can decide upon. There are usually only two uses for a home mortgage in Australia – An owner occupier home loan, or an investment property loan. They are similar from the outside, however they differ in the finer details. More Australians are taking up the services of mortgage brokers as the service given is unbiased, now due to new regulations- highly qualified and it is 100% service driven. If the service is not up to scratch, the mortgage broker will not

A mortgage broker will help the applicant slowly go through the whole loan process and ensure the clients fully understand the mortgage they are signing up for. There is nothing worse than having a loan you don’t understand and cannot really afford!

Mortgage brokers also work for free also. They are paid by way of commissions by which ever lender they end up using so their advise is as unbiased as you could expect. It is far different from a bank lend which only has their own institutions products to sell!

This is probably the biggest difference.

 Mortgage Brokers Also Help Tricky Loans

An experienced highly qualified mortgage broker will also be able to get the more tricky loans completed also be having a better view on all the different products available. This can be of an advantage if you have a credit problem of lack easily traceable income. These are the common hurdles overcome every day.

If you had to fill out a mortgage application yourself, take as much time and caution as you can. Its sometimes a complicated process and a lot of clauses to go over and stipulations to for-fill. That’s not to say it cannot be done. Just do your research and ensure you get the best product available suited to your situation.

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How A Mortgage Broker Saves You Time

Written by Investment-Mortgages on July 17, 2011 — 2 Comments

How a Mortgage Broker Can Help Your loan Application

 

Brisbane Mortgage brokers or mortgage brokers in general take care of a lot of the hassle of mortgage and loan applications.

The paperwork being one of the biggest undertakings. This is daunting for all applicants if you have never had to do it before by yourself

 

Right from the first step a qualified mortgage broker will walk you through all of the legalities of a mortgage or home loan to ensure you understand all the legal obligations and responsibilities you have by signing up for the specific loan. There are no questions that cannot be answered in relation to the loan as the broker has a responsibility to ensure the client has full disclosure and understanding.

 

The qualified mortgage broker will gather all the necessary details from the client so they can take care of the rest. Usually the first step is to get a completed credit report filled out by all applicants to ensure whichever mortgage or loan they achieve, its is fitting of their financial capabilities. Their is nothing worse than being stuck with a mortgage you cannot afford if the repayments are too high for your income.

 

Mortgage brokers fill out all the forms which can be quite complex sometimes so you can have the peace of mind they are working for you to ensure all the I’s are dotted and the Tee’s are crossed. This also frees up your time for more time worthy tasks. All this information for your application is then sent to the bank or lender for final assessment.

 

It’s always worth remembering that a mortgage broker does not work for one bank or lending institution so provides 100% unbiased advise and information. Their goal is to provide the best home loan or mortgage package to the client. There are sometimes up to one hundred products to choose from so unbiased advise is crucial.

 

Contact Us If Your In Need Of  Qualified Professional

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