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If you’ve been thinking of applying for a mortgage, you may have spent some time preparing for the process. I’m guessing you’ve cut back on your non-essential spending, saved as much money as possible for a deposit, maybe even paid off that last little bit of credit card debt that’s been hanging over your head.  

You do all of this so you can present yourself as an excellent borrower to the banks. 

But have you thought about how your older debts might come back to haunt you? 

When Credit Cards from the Past can be a Problem 

Recently, I’ve had a couple of clients who were shocked to find that credit card debts from the past were getting in the way of a successful finance application. 

One client was hoping to secure a home loan. They had a squeaky-clean application that ticked all the boxes, as far as we were concerned. 

Serviceability? Check! Are current accounts all paid on time? Check! Enough income to service the debt? Check! 

Unfortunately, they’d failed to disclose late payments on a credit card from the past. 

Now, in this client’s defence, they hadn’t deliberately left his information out. It simply wasn’t on their radar, because the card had been closed for two years. They genuinely believed it wouldn’t be an issue, especially considering the effort they’d made to keep their finances on track ever since. 

But, as a result of this old credit card they’d pretty much forgotten about, their application was knocked back. 

Six-figure Income Doesn’t Mean Home Loan Success 

Another recent example was a couple who came to us for help getting a home loan. They’re both professionals on great incomes, pulling in more than $300,000 between them. Shouldn’t be a problem securing finance, right?  

They too ran into difficulty, thanks to a credit card from a few years back. While they’ve always had the cash available to make their repayments, the organisation wasn’t their strong suit.  

Busy lives and day-to-day distractions meant they’d missed a few payments, and their credit provider had shared this information with another major bank – the bank we’d approached for their mortgage. 

Here’s the thing. When we submit a finance application for a client, we like to be 99 per cent confident it will be approved. Why? Because every application you make, whether it be for a mortgage or a lounge suite on interest-free terms, means an enquiry on your credit file. And having too many enquiries on there is not a good look. It can even make getting approval in the future more difficult, which is the last thing you want. 

Not only that, it could mean you miss out on your dream home, because you now need to take the extra time to find a new lender, and another buyer with their finance pre-approved could swoop in and snap it up. 

Unfortunately, we didn’t know about these historical credit issues. If we did, we could have managed expectations with the lenders in question prior to submitting the application formally.  

The Lesson  

Even if a debt or credit issue is in your past, please share it with your broker. We may be able to use a credit repair agency to sort it out, or sometimes we can try to find a lender whose policies suit your needs. 

What we can’t do is fix problems that we don’t know about.  

Full disclosure is the best way to help us help you! 

Think of your broker like a dating agency, trying to find you the perfect match. If you leave out key details when filling out your profile, chances are you’ll end up paired with potential partners who you find less than desirable. 

So, tell us everything – even if it’s embarrassing, or you don’t think it’s super important. We’ve heard everything before, and we won’t judge. What we will do is find the best lender, best interest rates, and best terms for your unique situation, so all you have to worry about is packing your moving boxes and settling into your new home.

If you have any questions about the home loan process, how much you may be able to borrow or what your options are, feel free to get in contact with our friendly team today.  

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au     


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.      

About the Author:       

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.       

Connect with Louisa on Linkedin.      

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.      

We have been told that our home loan is the first one we should get rid of. After all, it is the biggest debt, so it makes sense that most people want to pay it off as quickly as possible.  

But is that really the smartest way to manage your finances? Should homeowners pay off their home loan completely before considering other investments such as buying an investment property?  

For some people, this may make sense. If you want a low-risk profile, can see your income going down in the future or there are other reasons why you want to get rid of this debt, then it could be the right way to go. But when you avoid investing because you want to pay off your home loan first, you will pay a big cost.  

This is known as an opportunity cost. This is simply a way of saying – how much will it cost you to wait 10 or 20 or 30 years before you start investing? How much profit and market growth will you miss out on by waiting?  

If you bought a home in Sydney 10 years ago and waited until you paid it off before you invested in property, you would still be waiting to buy another investment. It would be at least 5 or 10 years, if not more, before owning it outright. BUT if you used some of your equity to buy an investment property 3 or 4 years ago, you would have 2 quality property assets that have both gone through a massive growth spurt. Your wealth would be greater with 2 properties than it would be with 1, even though you have more debt.  

The extra wealth of profit is the “opportunity cost” you miss out on if you wait for util your home loan is paid off.  

How Can You Safely Invest Before You Own Your Home Outright? 

How can an investor use their home equity safely, so it does not impact their lifestyle and enables them to buy a property at the same time?  

Our suggestion is that people pay off their home loans enough to be able to avoid paying Lenders Mortgage Insurance. This means you want to borrow no more than 80% of your property’s total value when you withdraw some equity to buy an investment property.  

Let us explain… say your home is worth $800,000 and your loan is $500,000. A loan worth 80% of its total value is $640,000. You owe $500,000 so you can borrow another $140,000 against your home to use as a deposit and stamp duty on an investment property.  

Here are a few tips for people who are considering this strategy: 

What Are the Traps to Know About?

Over the years we have seen a similar pattern play out in that inexperienced people don’t structure their debt correctly and end up with loan products that don’t suit them or that restrict their borrowing capacity.  

Other traps we have seen is that borrowers fall into is include using redraw, causing them to lose tax advantages, taking out principal and interest loans on an investment loan that is not tax-effective, or they don’t think about using the equity they have built on their properties to use on purchasing investment properties.  

To best leverage your loans for both your home and investment properties, it is ideal to set up the right structures and loan features from the beginning. Working with a mortgage broker and an accountant can be so powerful – it can save you from making mistakes that could cost you thousands, tens of thousands or even hundreds of thousands in lost profits, missed opportunities and unnecessary fees.  

If you are interested in property investment but don’t know where to start or whether you should pay off your home loans first, feel free to get in contact with our friendly team today and we can help look

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au     


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.      

About the author:       

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.       

Connect with Louisa on Linkedin.      

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.      

Usually, the first time that people learn about mortgage brokers is when they are trying to enter the property market. But… we are more useful than just helping you get a home loan.  

Here are a few ways a mortgage broker can save you money, time and stress. 

Mortgage Brokers can get You a Better Deal than a Bank 

Getting a mortgage with your bank is not always going to be the best way. Your bank has a handful of home loan options, but a mortgage broker has access to hundreds or even thousands of home loan options as they have access to lots of lenders. They could get you a cashback offer, a cheaper interest rate or a package deal that saves you money on other things such as credit card fees.  

Mortgage Brokers Provide Independent Advice 

Banks are in the business of selling products – which is the way they make money – a mortgage broker wants to earn money but recognises that the best way to operate is to build long-term relationships with their clients. This means helping clients to pay off their debt faster, providing independent advice around loan structures and suggesting products that are in the best interests of the client. 

This is not just good business practice, but it has now become law. Mortgage brokers MUST act in the customer’s best interests and legally cannot suggest a loan unless it is a good match. Banks, on the other hand, are not held to the same legislation, which is why it really pays to work with a mortgage broker.  

Mortgage Brokers Save Time 

Researching the mortgage market takes a lot of time and effort, whilst a mortgage broker can save you this hassle. They focus on getting the best deal at the beginning of the property journey and will work with their client’s overtime to make sure that they are all still getting the best deal. Mortgage brokers do regular check-ups every year on the borrowing status of all their clients to ensure that they are not paying too much interest. This is a service that mortgage brokers provide at no cost, and could save thousands of dollars every year! 

Mortgage Brokers Help You Grow Wealth 

Good mortgage brokers recognise that building a long-term relationship is not just about getting a good deal on a mortgage right now but setting up the best possible structures with a clear road map to achieve all future goals. This may be upgrading to a bigger home, investing in a holiday home, building an investment property portfolio or renovating to build equity. Whatever the goals are, a mortgage broker can help to work out what the borrowing capacity is now and what it could be in the future.  

Here are just a few things mortgage brokers do to help their customers and remember – they don’t charge anything for their services! Mortgage brokers are paid by the banks in the form of commission, which is the compensation for managing the loan process and introducing new clients to the bank.  

Mortgage brokers will also work to show how to take advantage of interest rate specials with different lenders when they become available, advise on how to prepare the application for the best chance for approval and be a source of independent advice, to help work out the next steps.  

If you are interested in learning more about how Zippy Financial can help you get approval for a home loan and realise your property dreams, contact us today. 

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au  


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.    

About the Author:     

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.     

Connect with Louisa on Linkedin.    

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).  

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.   

   

Do you remember that TV advert: nine out of 10 dentists recommend using Colgate? It turns out that mortgage brokers have earned a similar level of trust when it comes to helping first home buyers get into the property market. This is because nine out of 10 first home buyers (FBHs) recently said they trust a mortgage broker to help them buy their first home.  

Why Do so Many First Home Buyers Trust Mortgage Brokers?  

The Genworth First Home Buyer Report 2021 surveyed 2,077 prospective FHBs and 1,0008 recent FHBs, and they were very happy with the results.  

Here is what one respondent said: “Go and see a professional mortgage broker in-person, early on in the process. That way they know your situation and are able to best guide you through and help you out,” the 32-year-old recent FHB from WA said. And he wasn’t alone. 

Almost nine in 10 FHBs believe that mortgage brokers help cut through the complexity of the home buying process. The report also found a similar proportion of FHBs believe mortgage brokers provide reliable and trusted advice, information, and support.  

In a nutshell: 

Trusted = tick 

Jargon busters = tick 

Reliable advice and information = tick 

Valuable support = tick 

How can We Help You Buy Your First Home? 

The property market has picked up over the past 12 months which has left a lot of prospective first home buyers frustrated that the suburbs they were once focusing on, now moving out of their price range.  

But there are a number of Federal Government schemes available to FHBs, including the First Home Loan Deposit Scheme – which can allow you to buy your first home with a deposit of just 5% without paying for Lenders Mortgage Insurance. There is also a range of State and Territory Government schemes designed to help FHBs get into the property market, including first home buyer grants and stamp duty concessions. 

We’d love to discuss your situation and help you make the leap from renter to a first home buyer. Get in touch so we can support and guide you through the entire home loan application process to settlement and beyond.  

Phone: 1300 855 022             
Email: clientservices@zippyfinancial.com.au  


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.   

About the Author:    

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.    

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025). 

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.   

By consolidating your debt, you can take some pressure off your monthly finances.  

Here is a quick experiment…  

Go pick up three balls and try and juggle them. Most people, besides those who ran away to join a circus, will likely drop at least one of them within a few tosses. Now put two of the balls aside and throw the remaining up and down with one or both hands… that is much easier to manage, right?  

Well, this is not too dissimilar to the concept of debt consolidation. If you have more than one loan – for example, a credit card, a car loan and/or a personal loan – you can reduce the stress of juggling multiple debts, payment dates and interest rates by rolling them into one easy-to-manage loan.  

There are Other Benefits Too

One common debt consolidation method is to take out a new personal loan and use the funds to pay off your other existing debts.  

If the interest rate on the new personal loan is lower than the interest rate on your existing debts (for example, a credit card with a 17.99% interest rate) this can help your pay less interest each month and avoid the nasty late payment fees that come with these kinds of cards.  

By rolling all your debts into one, you can get a clearer timeline of when you can be debt-free.  

Debt consolidation can also make it easier for you to manage your household budget, as you only need to factor in repayments from one debt per month instead of many.  

Refinancing your Home Loan for Debt Consolidation 

Another method used for debt consolidation is rolling it into a refinanced home loan because mortgages offer comparatively low interest rates.  

If you are struggling with multiple debts right now, consolidating your debts into your home loan will, in most cases, reduce your overall monthly repayments.  

But there is a big word of warning…  

Whilst this option can reduce your monthly repayments now, debt consolidation through your mortgage can turn a short-term debt (such as a personal loan) into much longer-term debt.  

So, unless you aim to make a lot of extra repayments as soon as possible, you could end up paying significantly more interest than you would have otherwise. One way to address this issue is to create a loan split for the debt consolidation, giving you the ability to pay off all the short-term debts within a few years rather than for example over a 25-year home loan period.  

If you would like to explore your debt consolidation or refinancing options, then get in touch with Zippy Financial today, and we can help you look at ways to take off some financial pressure.  

Whatever your circumstances, we are here to support you however we can! 

Phone: 1300 855 022             
Email: clientservices@zippyfinancial.com.au  


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.  

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.  

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).  

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.  

One of the biggest mortgage challenges that bubbled up during COVID-19 was the blowout in banks’ turn-around times. While most lenders were previously able to process and approve loans in several days to a couple of weeks, many of their processing times blew out to weeks and weeks – and for some banks, the turnaround time stretched on for months.

That bad news? These challenges are set to continue. With so many banks’ putting an end to pre-approvals, it’s putting extra pressure on other lenders, who can’t keep up with the demand. 

As mortgage brokers, we do our best to help our clients navigate these choppy times, but it can be really volatile. We put a home loan deal forward to a bank recently and after submitting, this particular bank stopped taking applications, because they are at capacity in terms of being able to process loans.

Even though we submitted the deal before they announced this temporary cut off, they have refused to assess the deal. This is obviously really frustrating for the borrower, but it also makes us look really unprofessional in front of our client.

Add to this the fact that many banks have support staff based in India, in the grips of a harrowing COVID-19 outbreak, and it’s causing extra delays and dramas across the industry. 

We are dealing with an environment that is constantly changing, and if we, who are in the industry are finding it confusing and challenging, I can only imagine how borrowers feel! If you are concerned about your home loan, need advice or you are having trouble working out your next steps, we are on hand to help as much as possible. Contact our team of experienced brokers today on 1300 855 022 for a chat about how we can help you move forward.

Everyone has been talking about mortgages for the last 12 months – ever since COVID-19 arrived, the topic of home loans has been constantly in the air.

From mortgage holidays to interest rates falling to record lows, it’s been a huge year for the finance industry.

It’s also been a huge year for you as a borrower, which is why my question for you is: when was the last time you checked your home loan interest rate?

If you haven’t taken a look at your home loan since 2019, then there’s a really good chance you’re paying too much for your mortgage.

This is because rates have fallen and banks and lenders are being more competitive than ever to try and get your business.

There are some big differences between packaged variable versus basic variable interest rates at the moment – and if you make the switch, you stand to save a lot of money.

What are the Best Home Loan Deals on the Market Today?

The answer to this question quite literally changes daily, but at the time of writing we are able to secure fixed home loans for our clients with an interest rate as low as 1.99%, and variable rates are also very low.

When I talk about packaged variable loans versus basic variable interest rate loans, you might not think there’s much of a difference.

The two loan products do sound very similar, but they’re actually really different.

A basic loan is just that – it’s a loan with no bells and whistles. You can’t save money in an offset account to reduce the amount of interest you pay. You can’t redraw money from your loan, if you make extra payments.

It’s a simple, no frills home loan and it’s quite popular with first home buyers or those borrowers who doesn’t want to pay extra features – they just want to pay their home loan off as quickly as possible.

A packaged variable loan comes at a cost, usually around $400. But for that fee, you get:

Banks are very competitive right now, with many of them even offering big cashback incentives to get your business.

We have lenders on our books who are offering between $2,000 and $4,000 as a bonus for you, if you refinance your loan with them.

Every bank has a different policy and loan criteria, which is where we can help. If you are thinking of refinancing and want to take advantage of lower interest rates or a great cash back offer, contact us today and we’ll see how we can help you get into a new loan that saves you money.

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Comparison Rate calculated on a secured loan amount of $150,000 for a term of 25 years. WARNING: This Comparison Rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different Comparison Rate. Fees and Charges Apply. Terms and Conditions are available on request.