Scared to apply for a home loan? You’re not alone. Fear of rejection has stopped one in five Aussies from applying for finance over the past year. We explain what’s driving this fear, and how you can boost your chances of getting approved.
No one enjoys rejection. But despite this, there are plenty of times in life when we put ourselves in a position where rejection is a possibility.
From applying for a new job to asking the love of your life to marry you, the risk of a knock back isn’t too far away.
Yet we give it a go because the rewards of success outweigh the disappointment of being turned down.
It’s the same when it comes to applying for a home loan.
Sure, you could get a ‘no’ from a lender. But if you get the thumbs up, you’re on the way to buying a home!
This is worth bearing in mind because a new survey by Finder shows that over the past year, one in five (19%) Australians have avoided applying for finance, including home loans, out of fear they’d be knocked back.
The rejection concern that bothers borrowers
According to the research, one key aspect of being knocked back for a loan raises particular concerns for people – and that’s what rejection could do to their personal credit rating.
The thing that is much more likely to impact your credit rating is applying for a loan in the first place.
When you submit a loan application, the lender will usually take a look at your credit report. This is called a ‘hard enquiry’.
It is these enquiries that can lower your score, and they can stay on your credit file for up to five years.
That’s why it makes sense to minimise the number of loan applications you make.
Better still, try and stick to one application and get it right the first time. And that’s where we can really help you out.
How to overcome fear of home loan rejection
Applying for a home loan can be nerve-wracking. After all, there’s a lot riding on loan approval.
But if fear of rejection is holding you back, there is a simple solution. And that’s getting in touch with us.
We can walk you through your credit report to explain any issues that could raise concerns with a lender. And if your credit score is a little low, we can share tips on how to improve it.
Keep in mind though that your credit score is just one piece of the picture that banks look at.
We look at your total position in terms of home loan readiness.
Your income, household expenses, any other debts, and a variety of additional criteria that vary between lenders, all go into the mix of factors that decide whether you get the green light for a loan.
We’ll review it all, help you iron out any kinks in the application, and then line you up with a lender (and loan) that’s a good fit for you.
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.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
As property prices hit record highs across a number of cities, it’s no surprise that new home loan balances are also nudging towards fresh peaks. Today we’ll reveal what the ‘average’ new home loan is in your state, and provide you with some handy tips to help bring down your balance sooner.
It’s great news for home owners, but not so good for buyers, who may have to take out a bigger loan to fund a property purchase.
On the plus side, not everyone is having to upsize their home loan.
In some cities, new mortgage sizes are staying pretty still or becoming slightly smaller.
What’s the average in your state?
Across Australia the ‘average’ new mortgage is at a record high of $626,055 as of May 2024, according to the Australian Bureau of Statistics. That’s up from $584,607 just 12 months earlier in May 2023.
However, ABS data shows plenty of variation in new loan sizes in different states and territories.
Here’s what’s happening across the country:
NSW – the average new home loan size is currently $767,584, up from $720,029 in May 2023.
VIC – average new home loan is $601,891, slightly up from $598,949 in May 2023 but well below the peak of $651,364 in January 2022.
QLD – the sunshine state’s average new home loan size is $586,627, a solid increase on the May 2023 average of $521,609.
SA – average new home loan of $541,775, a big jump on the May 2023 average of $467,438.
WA – average new home loan of $538,860, up from $472,080 in May 2023.
TAS – the Tassie market has seen very little movement in new loan sizes. The current average is $462,324, just a few thousand dollars shy of the $465,313 average in May 2023.
ACT – the average new home loan across Canberra is $614,242, up from $589,130 in May 2023.
NT – in the Top End, the average new home loan has increased slightly, currently sitting at $437,427 compared to $424,873 in May 2023.
How to potentially whittle away your home loan sooner
No matter where in Australia you are buying a home, managing a home loan can be stressful at a time when interest rates are high.
So, it’s important to look for ways to help ease the pressure.
Choosing an offset home loan, for example, can let you put spare cash to work by helping to lower your monthly interest charges.
It can also allow you to build up a savings buffer while also reducing the overall interest you pay on the loan, and thus, bring the balance down quicker.
If you are unlikely to have substantial savings, looking for a loan that lets you make small, extra repayments at no additional cost can be a way to pay down the loan sooner, and save on interest costs.
Even something as simple as switching from monthly to fortnightly loan repayments could deliver savings on your interest repayments over the course of the loan.
Paying half the monthly amount every fortnight can mean paying the equivalent of an extra month’s repayments each year, helping you forge ahead with the loan without too big an impact on your household budget.
What matters is that you speak to us about a mortgage that suits your unique needs. One that gives you the benefits of the loan features you need, plus a competitive interest rate.
So if you’ve got your eye on a potential new home – or just want to find out your borrowing capacity so you can start searching – get in touch with us today.
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.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
The new financial year has kicked off with a bang for first home buyers! A whopping 45,000 more places have opened up for them under the Home Guarantee Scheme, as well as 5,000 more spots for single parents. Here’s how it could help you buy a home sooner.
Home ownership has long been the great Australian dream, but high property prices are making it tough to save a 20% deposit for many young families.
That’s where the federal government’s Home Guarantee Scheme (HGS) comes in.
It gives first home buyers a leg up into the property market even if they have just a 5% deposit, and it’s proving to be very popular.
Let’s take a closer look at what’s involved by answering a few FAQs.
What is the Home Guarantee Scheme?
The HGS helps first home buyers and single parents buy a place of their own even when they have a small deposit.
Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance, which can be a big saving on upfront costs.
In fact, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.
Who does the scheme help?
The HGS covers three separate programs, each with a different type of home buyer in mind.
The First Home Guarantee helps eligible first home buyers get into the market with as little as a 5% deposit. From 1 July 2024, an extra 35,000 places became available.
The Regional First Home Buyer Guarantee is dedicated to helping first home buyers who live in regional areas buy a home with just a 5% deposit. An extra 10,000 places have opened up for the 2024-25 financial year.
The Family Home Guarantee supports eligible single parents to buy a home with as little as a 2% deposit. This will help up to 5,000 families this financial year.
Am I eligible for the Home Guarantee Scheme?
You’ll need to tick a few boxes to be eligible for the HGS.
In particular, there are limits around the maximum purchase price for a home under the scheme. The upper limits vary between cities and across regional areas from state to state, and are adjusted each financial year.
One way to find out if you’re eligible is to call us and we can walk you through the various requirements.
Do all banks support the Home Guarantee Scheme?
No. Lenders choose to be part of the HGS, and while there is a reasonably wide choice of banks to pick from, not all lenders have signed up.
The Real Estate Institute of Australia says the “best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker”.
To date, mortgage brokers have secured up to 80% of the HGS placements, and we can guide you through the application process, answer any questions you may have about buying a first home, and recommend a home loan option suited to your needs from the lenders that are part of the scheme.
Call us today to find out more about buying with a 5% deposit – and zero lenders mortgage insurance. You could be in your own home a lot sooner than you expected!
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.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Property prices are expected to keep climbing higher through to mid-2025 – though not everywhere, according to a new report. We reveal where prices are tipped to go up, and where prices are expected to fall.
What a crazy financial year it’s been for property prices.
Despite a cost of living crunch and high interest rates, home values Australia-wide have soared 8.3% over the past 12 months, according to CoreLogic.
Will prices keep heading north? Or can we expect the market to cool at some stage?
These are key questions for home buyers who may be weighing up whether now is the right time to buy.
To get some answers, we turned to Domain’s latest forecast report, which sets out expected property price movements over the next 12 months.
The big picture: prices set to keep rising
According to Domain, several factors are set to push Australian home prices higher over the next year.
On the other side of the ledger, strong buyer demand is being fuelled by a growth in migration.
As Domain puts it, the “push-pull between affordability and availability” will be the factor that shapes Australia’s property market between now and June 2025.
Price growth is expected to differ between cities
That’s not to say home prices across Australia will move in the same direction and at the same pace.
Let’s take a quick tour around the nation to see what Domain believes lies in store for home buyers (and apologies to Hobart and Darwin residents – neither city was covered in the released report).
Brisbane
Brisbane’s property market has notched up an impressive 16.3% price growth over the past year. And Domain says there’s more growth to come.
With a forecast for 6-8% price growth, Brisbane’s median house price could hit a record high of up to $998,500 by mid-2025. Apartment values are expected to increase by 4-6%.
Sydney
If Domain’s prediction of 6-8% price growth proves accurate, Sydney’s median house price will hit a new record high of up to $1.76 million by this time next year.
Apartment prices (median) are also expected to reach a new record of up to $855,000 based on forecast price growth of 4-6%.
Melbourne
Melbourne’s housing market is expected to remain a little cooler, with growth between 0-2% expected – leaving median house prices between $1.03 million and $1.05 million. Unit prices are expected to do better, potentially rising by up to 4%.
Regional Victoria is the only market where Domain expects house prices to cool, with falls of 0-3% expected by mid-2025.
Adelaide
Adelaide could be on track to become a million-dollar city if Domain’s forecast of 7-8% price growth pans out. It could see Adelaide’s median house price hit a record high of up to $984,000 by June 2025.
Unit prices are anticipated to grow by up to 6%, helping the city’s median apartment price push through the $500,000 barrier.
Perth
There’s no denying Perth has had a bumper year, with a 22% jump in home prices over the past 12 months. And according to Domain there’s plenty of gas left in the tank.
With price growth of 8-10% possible over the year ahead, Perth could notch up a record-high median house price of between $840,000 and $856,000 by this time next year. In the unit market, prices are expected to jump 4-5%.
Canberra
Canberrans can expect mild house price growth, with values forecast to climb by up to 4%.
Unit prices in the nation’s capital are expected to increase by 1-4%.
What to weigh up
Domain’s forecasts are just that – predictions, not facts.
Along with factors that could push prices higher, the property listing site also cautions that a tighter jobs market and stagnating incomes could put downward pressure on prices.
Long story short: the right time to buy is when you feel ready to get into the market.
We can’t say for sure how property prices will move.
But we can provide clear answers on your borrowing power, help you understand if you’re in a position to land home approval, and help you find a home loan that’s right for your needs.
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.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Put the party pies on ice and postpone those rate-cut celebrations for a while yet. The much-touted rate cuts we’ve been waiting for may not arrive until 2025. Here’s why rates could be staying higher for longer, and how to take action yourself.
June saw the Reserve Bank of Australia (RBA) keep the cash rate on ice – yet again.
Rates haven’t budged since November last year, and with the RBA not due to make another rate call until August, interest rates will remain in a holding pattern for at least two more months.
For home owners struggling to manage their home loan at current interest rates, it begs the question: ‘what happened to all the talk about rate cuts in 2024?’
Here’s what’s happening.
One reason why rates aren’t moving
Just a few months ago, some of our biggest banks were predicting interest rates would start to slide sooner rather than later.
The RBA expects it could be “some time yet” before inflation is happily nestled in that 2-3% range – the point at which long-awaited rate cuts may start to kick in.
It’s not much of a date for home owners to work towards, though the big banks have a few time frames of their own.
Westpac and NAB now both see rates heading south from December. And while CommBank recently stated it expected rates to fall in November, there are signs it’s losing hope for a 2024 rate cut.
“Given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November,” CBA’s head of Australian economics, Gareth Aird, said.
“The risk to our call is increasingly moving towards a later day for an easing cycle.”
Long story short, even if we do get a December 2024 RBA rate cut, it’s probably fair to say we won’t see those cuts flow through to home loans until early next year.
And a note of caution: the RBA mentioned in its June statement that it is “not ruling anything in or out”.
It’s a grim reminder that a rate cut is not guaranteed before another rate hike.
This is why it’s so important to take action of your own.
How to manage higher rates
Revisiting your household budget, identifying areas where you can cut back, and tucking spare cash into an offset account to save on loan interest are all steps worth considering.
That could provide extra cash each pay day to help pay off your home loan.
It’s also a good idea to speak to us for a home loan review.
We can let you know if you still have the loan that’s right for your needs, or if you could save by switching – without having to wait for RBA rate cuts.
Better still, rising national property values may mean you could be in a great position to refinance.
Talk to us today for more tips on managing your home loan repayments and possibly trimming your loan rate. It may mean the party pies can come out sooner!
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.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
There is something very special about moving into a newly built home or putting the finishing touches on a major renovation. Maybe it is the look and feel of new paint and fresh flooring, or just knowing you have kicked a worthwhile goal.
Whatever the motivation, plenty of Australians are rolling up their sleeves, with the value of building approvals jumping 14.7% from December 2023 to January 2024. Meanwhile, on the renovation front, we are not just pimping our pads for looks and lifestyle. Almost half the home renovations carried out in 2023 were designed with a ‘green’ focus to improve energy efficiency, according to Houzz Research.
The upshot is that planning a new build or renovation can be exciting and rewarding. But long before you kick back and enjoy it, you may need to decide how to pay for it all. And a constriction loan could be the right tool for the job.
How do construction loans work?
Construction loans work a bit differently from regular home loans. Instead of receiving a lump sum from the lender, which is usually the case with a traditional home loan, a construction loan drop feeds funds in line with various stages of the project.
If you are building a new home, a lender will typically make progress payments across give main stages:
Laying the slap
Erecting the frame
Reaching lock-up
Fitting out the home, and
Completion of construction.
This arrangement can offer valuable advantages.
For starters, paying out smaller sums during the construction period may provide a level of protection for the borrower against a building being paid for work that is not completed. In addition, while the project is underway, the loan interest is only calculated on the funds drawn down, not on the final total value of the loan.
During the constriction period, you will generally be asked to make interest-only payments. This can be a lot kinder on your budget than principal plus interest payments, especially if you are renting while builders are at work.
What to watch for with construction loans
Building projects do not last forever, and neither do construction loans. When your home or renovation is complete, your construction loan will typically roll into a regular home loan.
It can all sound very simple, and usually it is. However, a key challenge with construction loans is that they are not offered by every lender.
It is important to speak to us at an early stage. We can help you identify lenders with construction loan options that meet your needs and budget, plus guide you through the application process. Our support can save you time and leave you free to focus on the project.
If you are looking to build or renovate, talk to us about your funding options and we will aim to help you get the ball rolling on your construction project sooner.
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.
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 need a home loan in a hurry? You could be in luck. Plenty of lenders are keen to crunch loan approval times, but there is a lot of borrowers can do to potentially speed up the process too.
Finding a home to buy can take time, and when the right place comes along it can feel as though you need to sign the sale contract fast to stake your claim. But from there, you are going to need a home loan, and that’s where timing becomes critical.
The good news for home loan applicants is that average turnaround times have reached new record speeds at some of the bigger banks, while processing periods for smaller lenders have also reduced, according to the latest Broker Pulse Survey. But don’t let that lull you into a sense of complacency.
It is important to have your loan ready to go to by settlement, usually six weeks after you have signed and exchanged congrats (however this period of time can potentially be negotiated with the seller). Otherwise, if you don’t have finance sorted by settlement date, the seller may be able to charge interest and penalty fees.
So, there can be a lot riding on getting your home loan approved in a timely fashion.
The general rule for loan approval times
How soon your home loan can be arranged often varies between lenders. Some lenders boldly claim that it can take as little as an hour, but that is not usually the case.
To play it safe, allow about four to six weeks from the time you submit your application to have the funds available.
But if you require funds sooner than that, then it could be a matter of us helping you line up a lender with quicker turnaround times (and then having us hassle them a bit for good measure).
What is usually more important is that you focus on the home loan that matches your needs, rather than racing in for a mortgage that can be arranged in record time.
5 ways to help speed up the home loan process
Borrowers can do plenty to try and speed up the loan process. Here are five steps you can take to help keep application and approval times tight:
1. Talk to us first
We can explain your borrowing power, let you know how big a deposit you may need, and check if your finances are in the shape it takes to get the green light from lenders. We also have access to resources that estimate how long approval times currently are with potential lenders.
2. Get your paperwork together
Gather all the documents a lender is likely to ask for, including copies of payslips, birth certificates and other ID, plus bank account statements for the past 36 months. If you are unsure, this is a step we can help you with.
3. Try and hold off on any major changes
Big life changes, such as starting a new job or business just before you apply for a loan, can leave lenders asking questions. Try to maintain your budget – your usual spending/saving patterns – and your current job, to avoid a ‘please explain’ from lenders, which could delay the loan approval.
4. Double-check that you have completed the application accurately
Any mistakes on your application form can see the paperwork returned to you for corrections, putting the brakes on the whole process. Once again, we can help minimise any potential discrepancies in your application.
5. Ask us about loan pre-approval
Waiting until you have paid a deposit to apply for a mortgage can be a high-stakes high-stress strategy. Loan pre-approval is a way to help you speed up the loan application process while also potentially boosting your bargaining power with vendors.
Call us today for more tips on getting your loan across the line, we would love to help you move into your new home sooner!
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.
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.
Applying for a mortgage when you are self-employed can have you jumping through more hoops, but it does not need to deter you from getting into the property market. Here are 4 tips to help you apply for a mortgage like a boss.
Being your own boss does have its advantages: the flexibility of setting your own hours, building your own business to represent your values, having someone else get you a coffee… but when it comes to home loans, you may have more to prove than the average applicant.
Lenders may view you as a little more risky. That is because, in their eyes, you may not have a steady paycheck to make those all-important repayments. But being self-employed does not need to stop you from getting your slide of the great Australian dream. Planning ahead and knowing what lenders generally look for could give you an edge when it comes to mortgage application success.
Get your finances in order
As a self-employed applicant, having rock-solid finances is important. Even if your business is booming, most lenders will see you as more of a risk for defaulting. That is because self-employed incomes can be less consistent.
Lenders want to know if the likelihood of making regular payments is high. To mitigate risk, loan options available to you may have a lower loan-to-value ratio (meaning you may need a higher deposit) and/or have a higher interest rate.
To prepare to apply, consider getting your finances in check by:
Building up a healthy credit score.
Lowering your living expenses by focusing on the essentials.
Saving up a healthy deposit (aka genuine savings) and cash buffer.
Running your business on accounting software such as Xero, MYOB etc, so that you can provide up-to-date and accurate profit and loss statements.
Gather your documents
It is important to keep your business and personal finance documents up to date. For verification of income, many lenders need two years’ worth of lodged business and personal tax returns.
It is a great idea to tell your accountant in advance that you are planning on applying for a home loan. That is because some of the financial wizardry they apply to lower your tax bill might work against your application and lower your borrowing capacity. Also, keep in mind that business owners who do lots of “cash jobs” can find it harder to obtain a home loan because they have less income to show for their work.
On top of running your credit score, some lenders may want statements from loans and credit cards for proof you can make regular repayments. They may also want to see verification of assets such as any property, savings, and investments.
Some lenders may want to see everything when applying for a loan and some may need less. Some offer low-doc loans if you don’t have extensive documentation, but they may come with higher interest rates or the need to pay lenders mortgage insurance (or both).
Exactly what documents are required depends on the lender and the type of loan.
Choose your lender wisely
Not all lenders are comfortable providing self-employed loans for the reasons mentioned above. And every time you apply for a home loan your credit history is “pinged”. The more this occurs, the more of a red flag this may pose to lenders.
So, targeting lenders that have a track record of approving self-employed loans might be a wise move.
Having a reputable mortgage professional on your side may be helpful here.
Get in touch with us today
Just as you will want to give your accountant plenty of notice, so too will you want to reach out to a mortgage broker sooner rather than later. That is because we can help you work out your borrowing capacity and provide you with other tips that you can start working on that may eventually help make your application more attractive to lenders.
If you are self-employed and think you will be seeking a home loan in 2024, get in touch today!
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.
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.
The lending landscape has undergone significant changes, reshaping the dynamics of lending property and investment property lending rates. These shifts are crucial for understanding the current and future state of the property market. This article delves into how these changes are influencing both homebuyers and investors.
Overview of Recent Lending Law Changes
Recent modifications in lending laws, driven by a need to balance consumer protection with economic stimulation, have significantly impacted the property market. These changes, aimed at easing credit access while ensuring responsible lending, are altering the way individuals and investors approach property financing.
Impact on Homebuyers and Investors
The new lending landscape presents a mixed bag of opportunities and challenges for homebuyers and investors. For homebuyers, especially first-timers, the relaxed lending criteria can mean easier access to mortgages. Investors, on the other hand, are experiencing a shift in investment property lending rates, influencing their strategies and returns.
The Housing Market Response
The response of the housing market to these legislative changes has been notable. There has been an uptick in market activity, with an increase in property transactions and a gradual rise in property prices. This response is indicative of a rejuvenated market, spurred by easier access to loans and a growing interest in property investment.
Long-term Implications for the Property Market
While the immediate effects of the new lending laws are apparent, their long-term implications are more complex. Issues such as housing affordability and market accessibility for first-time buyers remain at the forefront. The market is also adapting to the evolving landscape of investment property lending rates, which could shape future investment trends.
Strategies for Navigating the New Lending Environment
In this new lending environment, it’s crucial for borrowers to strategize effectively. This includes thorough financial planning, understanding the nuances of loan agreements, and considering the long-term implications of borrowing decisions. Seeking professional advice can be invaluable in navigating this landscape.
The Role of Financial Advisors and Mortgage Brokers
Financial advisors and mortgage brokers play a pivotal role in guiding clients through the new lending landscape. Their expertise is crucial in helping borrowers understand the changes, assess their options, and make informed decisions that align with their financial goals.
Navigating the New Lending Landscape with Expert Guidance
Comprehensive Financial Understanding: Financial advisors provide comprehensive financial understanding. Their expertise extends beyond mortgages, offering clients a holistic view of their financial situation, ensuring that mortgage decisions align with broader financial goals.
Tailored Mortgage Solutions: Mortgage brokers offer tailored solutions. Leveraging their market knowledge, brokers navigate the new lending landscape to identify mortgage options that best suit clients’ needs, considering factors such as interest rates, terms, and repayment structures.
Informed Decision-Making: Both financial advisors and mortgage brokers contribute to informed decision-making. By explaining the implications of changes in the lending landscape, they empower clients to make decisions aligned with their financial goals, enhancing overall financial well-being.
Maximizing Financial Opportunities Through Expert Collaboration
Strategic Financial Planning: Financial advisors engage in strategic financial planning. They help clients understand the broader financial context, enabling them to integrate mortgage decisions into a comprehensive financial strategy for long-term success.
Market Insights for Mortgage Selection: Mortgage brokers provide market insights for optimal selection. Their in-depth knowledge of mortgage products allows clients to navigate the new lending landscape with confidence, selecting mortgages that align with both current and future financial needs.
Responsive Adaptation to Changes: Financial advisors and mortgage brokers enable responsive adaptation to changes. In a dynamic lending landscape, their guidance ensures that clients stay ahead of market shifts, adapting mortgage strategies to capitalize on opportunities and mitigate risks.
The new lending landscape presents both challenges and opportunities for those involved in the property market. Staying informed, adaptable, and strategic is key to navigating these changes successfully. Whether you’re buying a home or investing in property, understanding the impact of these lending law changes is essential.
FAQ
A: Recent modifications in lending laws, aimed at balancing consumer protection with economic stimulation, have significantly impacted the property market, altering how individuals and investors approach property financing.
A: The new lending landscape presents a mix of opportunities and challenges. Homebuyers, especially first-timers, find easier access to mortgages, while investors see shifts in investment property lending rates, influencing their strategies and returns.
A: The housing market has responded with an uptick in activity, increased property transactions, and a gradual rise in property prices, indicating a rejuvenated market spurred by easier access to loans and growing interest in property investment.
A: While the immediate effects are apparent, long-term implications are more complex, involving issues like housing affordability and market accessibility for first-time buyers, as well as adapting to evolving investment property lending rates.
A: Borrowers should strategize effectively, including thorough financial planning, understanding loan agreements’ nuances, and considering the long-term implications of borrowing decisions.
A: Financial advisors and mortgage brokers guide clients through the new lending landscape, helping them understand the changes, assess their options, and make informed decisions aligned with their financial goals.
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 utilizes 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.
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.
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Are We Witnessing a Resurgence in the Property Market?
The Brisbane property market has been a topic of keen interest in the Australian real estate landscape. Known for its steady growth and resilience, the property market in Brisbane is increasingly being recognized for its potential investment opportunities.
Current Trends in Brisbane’s Property Market
Recent years have seen the Brisbane property market demonstrate robust growth, outpacing many other major Australian cities. This growth is characterized by a steady increase in property values, a surge in demand for residential properties, and a growing interest from both local and interstate investors.
Factors Driving Brisbane’s Market Growth
Several key factors are contributing to the growth of Brisbane’s property market:
Economic Stability: Brisbane boasts a stable and diversifying economy, which has been attracting businesses and job seekers, thereby increasing housing demand.
Population Growth: The city is experiencing significant population growth, with people moving from other states, drawn by the lifestyle and affordability Brisbane offers.
Infrastructure Development: Ongoing and planned infrastructure projects are enhancing the city’s appeal, making certain areas particularly attractive for investment.
Investment Opportunities in Brisbane
Brisbane offers a variety of investment opportunities, from high-rise apartments in the bustling city center to suburban family homes. Suburbs like Fortitude Valley, South Brisbane, and Chermside are witnessing high demand, offering promising returns for investors.
Risks and Considerations for Investors
While the Brisbane property market presents numerous opportunities, investors should be mindful of potential risks. It’s crucial to understand the local market dynamics, property cycles, and to be aware of any regulatory changes that could impact the property market in Brisbane.
Future Outlook for Brisbane’s Property Market
The future outlook for Brisbane’s property market remains positive, with experts predicting continued growth. This optimism is based on the city’s ongoing development, lifestyle appeal, and its relative affordability compared to Sydney and Melbourne.
Navigating the Brisbane Property Market with Professional Assistance
For those looking to invest in Brisbane’s property market, professional guidance is invaluable. Experts like Zippy Financial can provide insights into market trends, help identify lucrative investment opportunities, and offer advice on financing options.
Leveraging Financial Planning and Mortgage Broker Expertise
Strategic Financial Planning: Navigate Brisbane’s property market strategically with professional financial planning. Align financial goals with investment objectives for an optimized strategy.
Mortgage Broker Assistance: Engage a mortgage broker for personalized financing solutions. Experts like Zippy Financial guide you in securing optimal mortgage terms, ensuring financial efficiency in your Brisbane property investment.
Market Trend Analysis: Utilize financial planning and mortgage broker expertise for in-depth market trend analysis. Make informed investment decisions based on current and future trends in Brisbane’s property market.
Identifying Lucrative Opportunities Through Expert Guidance
Informed Investment Decisions: Leverage expert guidance for informed investment decisions. Financial planning and mortgage broker professionals assist in identifying lucrative opportunities aligned with your financial objectives.
Financing Strategies: Explore financing strategies with a mortgage broker like Zippy Financial. Receive tailored advice to ensure your Brisbane property investment aligns with financial goals and budget constraints.
Risk Mitigation Planning: Mitigate risks with financial planning and mortgage broker expertise. Navigate potential challenges in the Brisbane property market with a well-considered and secure investment strategy.
Tailored Financing Options for Brisbane Property Investment
Personalized Mortgage Solutions: Benefit from personalized mortgage solutions through a mortgage broker. Zippy Financial tailors financing options, optimizing affordability and financial efficiency for your Brisbane property investment.
Budgetary Considerations: Incorporate budgetary considerations into your investment plans. Financial planning and mortgage broker experts help balance investment goals and budget constraints for a successful venture.
Long-Term Financial Alignment: Achieve long-term financial alignment through expert guidance. Financial planning professionals, combined with the expertise of a mortgage broker, ensure your Brisbane property investment aligns with broader financial aspirations.
Brisbane’s property market is emerging as a hotspot for investors, characterized by its growth potential and stability. Whether you’re a seasoned investor or new to the property market, Brisbane offers a range of opportunities to diversify your investment portfolio.
FAQ
A: Brisbane is considered a potential property hotspot due to its affordable property prices compared to other major cities, strong economic growth, increasing population, and significant infrastructure developments, making it an attractive location for investors and homebuyers.
A: Factors such as consistent economic development, population growth, low-interest rates, and ongoing infrastructure projects are contributing to the growth of Brisbane’s property market, attracting both local and international investors.
A: Compared to other major Australian cities like Sydney and Melbourne, Brisbane offers more affordable property options, lower cost of living, and a subtropical climate, making it an appealing choice for potential homebuyers and property investors.
A: Yes, certain suburbs and regions in Brisbane are experiencing higher demand due to their proximity to the city center, quality schools, and public transport, making them particularly attractive for property investment.
A: Predictions for Brisbane’s property market are generally positive, with expectations of continued growth driven by economic stability, population increase, and ongoing infrastructure and development projects in the region.
A: Zippy Financial can provide expert advice and comprehensive services to those looking to explore property investment opportunities in Brisbane, offering insights into market trends, property valuation, and financing options to help clients make informed decisions.
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 utilizes 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.
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.
RELATED ARTICLES
A Step-by-Step Guide to Finding Investment Property with Homeowner Appeal
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.
