Archive for March, 2011

The waters may have subsided, but the economic impact of the recent flood disaster is likely to be felt for some time. Economists predict the Queensland and northern New South Wales floods will knock around one per cent off the Australian economy in the December and March quarters. However rebuilding should see at least half of this recouped by year’s end.

Given the extent of the flooding, damage to public infrastructure such as roads, railways, bridges, electricity and water supplycould easily top $10 billion. Yet until the true cost of the damage is calculated, economists widely believe the Reserve Bank of Australia (RBA) will keep rates on hold, which is good news for borrowers.

AMP chief economist Shane Oliver says the RBA will be more concerned with the negative impact the floods may have on economic growth than in increasing rates. As such, he expects the RBA Board to leave the cash rate at 4.75 per cent until Q3, when positive inflation – generated bythe mining sector – starts to push upwards. At present, the mining boom remains alive and well. And, if anything, the boom is strengthening with the terms of trade continuing to rise. The impact is feeding through the economy via higher wealth levels and dividend payments, higher employment,  higher tax receipts and higher business investment.

Mining investment, which accounts for 4 per cent of Australian GDP, is set to add around 1.5 percentage points to Australian economic growth this financial year and 2.5 percentage points to growth for the 2011-12 financial year, according to ABS business investment intentions data. Overall this suggests an environment of reasonable – albeit still somewhat disparate – economic growth, consistent with around 15 per cent profit growth.

So, while the floods may result in soft economic growth in the near term, from mid-year onwards there is a risk that the economy will start to overheat. This is a result of reconstruction following the floods and a boost in replacement spending byconsumers combined with a surge in mining investment.This will lead the RBA to resume tightening, which may result in the lifting of the cash rate.With potential rate hikes towards the end of the year borrowers should now be thinking about how this will impact their capacityto meet mortgage repayments and what steps need to be undertaken to help relieve any stress.

Feel free to give us a call to discuss your situation – we’d be happy to run some scenarios and explore whether there maybe a more appropriate home loan for your circumstances and financial goals.

Having your home loan approval delayed as a result of not having allyour required documentation ready to go could end up costing a lot more than just time – it could mean losing your dream property.

Ahead of applying for your loan it is crucial that you get all your affairs in order so that your application will go through as seamlessly as possible when you find that perfect property.

An ID check will be one of the first things any lender will perform, so make sure you obtain a copy of your driver’s licence or birth certificate and also have at hand copies of your Medicare Card,utilities bills or tax assessment notices as proof of identity.  Proof of saving and income will also need to be provided so that the lender can assess whether you have the means to service your home loan debt.

In addition, your credit record will have a huge impact on getting your loan approved so pay off any arrears or outstanding bills that have crept in before you approach a lender.

Your lender will require you to provide information regarding any current liabilities so get a hold of any HECS statements, credit card statements or other loan documentation you still owe. You will also have to detail what your monthly expenses are, so take the time to calculate your expenses including what your rent, council rates and weekly travel costs amount to.We are well geared to help you with every step of the home buying process – from identifying the best loan products, through to making an application.

Macquarie Leasing have just announced the launch of a new Commercial express product that covers motor vehicle deals for eligible commercial clients without the need to provide financials subject to meeting the following guidelines:

• Passenger cars or commercial vehicles up to three (3) tonnes
• Maximum loan amount (including brokerage, insurances etc) of $70,000 (if the client is not a property owner, then the $70,000 is after a minimum 30% deposit)
• New and used vehicles up to four (4) years old
• Supplied via a licensed dealership (no private sales)
• No negative equity to be financed
• ABN held for a minimum of 24 months by applicant (in acceptable industry)
• Verified property owner with minimum of $100,000 equity (if the client is not a property owner or doesn’t have this equity, then the 30% deposit is required)
• Satisfactory Veda Report on applicant and guarantors
• Standard rates, terms and residuals/balloons to apply
• Total exposure for applicant to Macquarie is less than $150,000.

Please note this product is only available for commercial clients where bona fide business use can be verified. Financials may be required if any of the above conditions are not met or if the exposure is greater than $150,000 but if this sounds like something that interests you, then give us a call.

Some fantastic results of a survey recently conducted by the Mortgage & Finance Association of Australia (MFAA) and BankWest show just how people are starting to understand the role that a mortgage broker plays and that it is much more than just “doing the legwork” and all about having a professional who knows you and knows what your overall goals and objectives are working for you. The story is as follows:

Mortgage brokers are increasingly being seen to provide worthwhile services by the investor community, according to the latest MFAA/Bankwest Home Finance Index.

According to the survey, the number of people understanding the benefits of using a broker is at 35.7%, its highest level since a 26.9% low-point in November 2008. Conversely, the preference for banks is down nearly 5% since July 2010.

Additionally, awareness of the services that mortgage brokers can provide is at 78.9% and broker awareness is at 95% generally. The benefit of “getting the best deal” through a mortgage broker skyrocketed 18% from the 53% in July 2010.

“With increasing activity in the investor community, mortgage brokers have a tremendous opportunity to articulate a compelling value proposition based on convenience and choice,” MFAA CEO Phil Naylor said.

“We are seeing consumers understand that mortgage broker benefits extend beyond the traditional realms of leg work and wider loan range. Increasingly the ability to understand a client’s personal circumstances and finding interest rate deals are proving key reasons people are turning back to mortgage brokers.”