Good Home Loan Tips: September 2012

Thursday, September 20, 2012

More Information About Low Doc Home Loans

Low docs are specially implemented for those who are unemployed. This will still require an application in writing and to sign a loan agreement. The only difference it has from other home loans is that you don’t need to provide and evidence of your income. Instead, you just have to sign a declaration regarding your income and your ability to meet the payments. This process is called “self-certification”. And that you have met your lender’s requirements, you won’t need to report your financial statements as well as tax returns.

Most lenders particularly in Melbourne, Australia allow borrowers to apply for low doc home loans whether in refinancing your home or buy property for investment purposes. Moreover, if you have been in the same business for at least two years, lenders will allow you to use the funds for the following:

Buy a business
Fund for business expansion
Purchase plant
Buy equipment, fixtures, fittings, machinery or cars; or
Refinancing a business loan

What’s makes this good news is that it is absolutely a cheaper alternative to bank overdraft or secure business loan.

Low doc loans actually have the same features as a standard home loan. For one, low doc loans also offers choices to borrowers whether they prefer variable or fixed rate options. In addition, it also has features that standard home loans have such as offset facility and redraw.

Furthermore, low doc loans are a bit more risky than of the standard home loans. One needs to fully meet the requirements of the lender. Another difference of low doc loans from the latter is you typically have to deposit a larger amount than you should have with standard home loans.

One of the requirements for low doc loans is an ABN and that you have been in the same business for at least two years. But if you still have many questions about this loan and of you are not quite sure if you would ever qualify, just contact your lender.

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How You Can Salary Sacrifice Your Mortgage

There are different types of salary sacrifice which is also known as salary packaging. These are: Superannuation Packaging, Novated Lease, Rent, Home Loan and laptop or phone. However, to those who wanted to own a home a little easier way possible, here's how you can do it. http://bit.ly/lA4XZj

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Wednesday, September 19, 2012

Different Standards and the Types of Savings Considered as Genuine Savings

Lenders in certain countries around the globe have introduced the idea of genuine savings for a loan application. Genuine savings policies are for everyone who wanted to apply for home loans the easier. The origin of this implementation is to respond the proliferation of first time home buyers that were applying for home loans with no savings or no deposit.

There are different standards that genuine savings that were made by lenders across the country. These are:

Some lenders would require 3% of the purchased value of the property which is usually applied to every first time buyers.
Other lenders would require 5% of the purchased price of the house that should be saved before being approved to buy it.
Others would ask for 5%of the purchased price for a loan which is 80% at least o the value of the price. However, this will also depend both on the LMI product and the lender.
Some would not require genuine savings for mortgages that are almost 90% of the price of the property.

Furthermore, the following types of savings are considered as genuine savings but only if they will add up beyond 5% of the purchased value:

Savings which are mounted up for three months
Term deposit for three months
Shares or managed funds held for three months
Equity acquired in real estate but will depend on the lender

Ever wonder why they have put such restriction in home loans? It is for the reason that the lender will be put at risk if a borrower will fail to pay the loan. A lender who does not have a genuine deposit handled on a loan will have the possibility to not being paid back for a claim. Therefore, the lenders should implement the genuine saving standard.

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Tuesday, September 11, 2012

Is Low Doc Home Loan Fit For You?

Low doc home loans are designed for people who are self employed and who are incapable of proving their revenues by typical means. Generally, it is for people who do not qualify for traditional home loan to purchase a property. This is a type of home loan that can be approved without the regular income verification requirements but is a necessity if you are unable to have recent tax returns or any financial statements. Low documentation needs the application to be made in writing yet you don’t need to provide much paperwork such as that of proof of income, assets and liabilities. This mainly relies on a self-verification method in which you can state your income without any documentation needed.

If you are a person who have some existing equity or a deposit saved or have some trouble presenting a proof of your regular income, then you can benefit from this low doc loans. And basically, this applies to all self employed or casual workers. This can also be applicable to people who hold bad credits. However, the availability of low doc home loans is sometimes abused by people who actually have income but have been removed them when they report to the taxation office. If this offense is caught, they are charged to pay greater than the saving they should be making upon breaking the law.

Low Doc mortgage

In this modern day, low doc home loans have become more flexible than the previous years. Self employed borrowers are required to have a valid ABN that has been active at least for the last two years. However, this should also be registered for GST.

PAYG (pay as you go) are not recommended for anyone who has a stable job. If you have it (PAYG) yet cannot support with their income pay slips, there can be alternatives that will still allow you to borrow without proof of your income.

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Monday, September 10, 2012

SMSF Mortgages: Geared Up Towards Better Home Buying

SMSF or self-managed Superannuation Funds which is also known as DIY superfunds is a popular choice of mortgage of many Australians. It is a small superannuation fun established for 1-4 people with the fund being governed by trustees or directors who are also members of such. This fund is now privileged to borrow money to purchase a property. An investor can have many choices and at the same time can have power over the investment properties.

Baby Boomers and SMSF's

To be an SMSF, this fund should comply wit6h everything that is stated in Section 17A of the Superannuation Industry (Supervision) Act 1993 (SIS Act). And these are: • Trust deeds that would meet the requirements of SIS Act • Fund should have 4 members and below • Every member must be a trustee • No member is an employee of another kind of fund fund—ony if they are pertinent; and • No member or trustee of the fund that will receive any wage or remuneration for their service for being trustees Every trustee has a duty which is also controlled and governed by the Superannuation Industry (Supervision) Act of 1993: these duties are:

• Honesty in everything they do particularly in all matters regarding the fund • Implement the degree of skill and good judgment of an shrewd individual whenever dealing with the financial issues towards another person • Work in the interest of the members and their recipients • Meet the requirements of SIS • Conform with the investment limits; and • Keep up with the records and submit ATO requirements

SMSF mortgages are tax-effective way of buying a property. This kind of mortgage will allow you to differentiate the assets in your SMSF. Another advantage of SMSF mortgage is that will enable you to borrow in buying the property directly which offer you the opportunity to diversify your overall SMSF portfolio through incorporating a previous property that has been difficult to process however, without substantial equity available.

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Sunday, September 9, 2012

Genuine savings: Assuring Your Lender to Paying Your Home Loan

"A penny saved is a penny earned." –Benjamin Franklin

This kind of saving is not an ordinary money saving. A genuine saving is policy that has been re-introduced by lenders so that you can prove a minimum of five percent savings for over three months in order to qualify for a home loan.

For those who don’t get it that much, here is a brief, precise and basic information of what genuine savings is.

Genuine Savings Explained

So if you think you can buy your home by just slamming a slab of money to your lender, you better think again. Nowadays, not all cash deposits are acceptable for your home application when you deposit below 20% of the purchased price.

Conversely, if you cannot prove that you can save a deposit, you should then consider applying for a no savings home loan which is available up to 95% of the property’s value. And yes, you will still need a deposit and it can come from just about any source.

Now, you question why lenders are being so strict with this policy. The lenders have tightened their belts when it comes to this since the Global Financial Crises which results to the eliminated the full availability of home loans but will be available with a guarantor.

There are other assets that might be considered as genuine savings. Some of this is term deposits, shares, and equity of the property that are held for three months. Moreover, gifts from parents, tax refunds, income bonuses, saved cash and a lot more never qualifies for a genuine saving.

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Thursday, September 6, 2012

Get A home Loan Through Salary Sacrifice

A salary sacrifice is when an employee agrees to be given a lower base salary but can have benefits of the same value in exchange for it. This sacrificed part of the salary goes to your employer in order to fund these benefits. It is an advantage because when you receive your income, you will only pay for your tax and not for these benefits anymore which have taxes if you accomplish yourself. Therefore, making you less pressured. This salary sacrifice can save you tons of money.

There are more benefits of a salary sacrifice. And one of it is to consider it as a fringe benefit. This means when you sacrifice you salary, you have it in exchange for a car or home loans. This way, your employer is making the transactions himself without the money going through your pockets which you might be tempted for spending it for other things.

With this, banks and lenders are assured that you can sustain the payments for your loan as long as you keep up with your salary to pay it. Moreover, you are taxed is minimized because it is your employer who is doing direct transactions particularly payments to the lender in which your get a tax break.

How does the Salary Package work?

This way, it’ll be much easier to own a property—your house in particular through salary sacrifices. You won’t find it a burden than loaning a house with the help of a bank.

So talk to your employer now and get necessary arrangements done. You will probably get your house without even knowing it and without too much worry of paying it sustainably as long as you do your job well.

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Wednesday, September 5, 2012

Home Loan Credit Score—Why You Need A Good Score

A credit score can mean the difference between being denied or approved for credit. In addition it is a high or low interest rate. A score that can get you qualified for apartment rentals and/or utilities without being required for a deposit must be a good score.

A credit score is a numerical expression based on statistical analysis of a person’s credit files, to present the “creditworthiness” of that particular person and it is primarily based on credit report information typically sourced from credit bureaus according to Wikipedia.

What's My Credit Score and How Do I Raise It?

If you wanted to improve your credit score in order to qualify for a credit, you have to understand how to improve your credit history. So clear up your jargons and make the most of your credit card.

How Credit Score Is Calculated & How To Improve Your Credit History

There are some vague aspects of credit scoring formula. However, that is not the case, all you needed to know about is your credit score and knowing how to achieve the best of it.

How Can I Achieve The Best Credit Score?

Credit scoring is never limited to banks only. There are a lot of organizations that employ the like techniques such as mobile phone companies, insurance companies, government departments and even your landlords. So get things right by now and enjoy the privileges that a good score can give you.

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Tuesday, September 4, 2012

Mortgage Insurance—Does It Really Work?

Mortgage insurance or mortgage guarantee is an insurance policy that insures lenders against loss when a borrower fails to pay their mortgage. This is the type of insurance that everybody complains about. When a borrower defaults to pay and the lender takes title to the property, the mortgage insurer either reduces or eliminates the loss to the lender. Therefore, this problem is shared the borrower.

Knowing How Mortgage Insurance Really Works

Basically, it is the borrower who will be paying for this mortgage insurance. With this, he/she should be aware that a monthly amount may be included in the payment of the property which is given to the lender despite the many premiums to choose from. If you compare mortgage insurance over term life insurance, it is always up to you which is better for it depending on your situation. However, both are different types of insurance products but share some common features. To better understand these two, please watch this short video.

Comprehensive Difference between Mortgage Insurance and Term Life Insurance

Although mortgage insurance shares a lot of benefits, it still has some disadvantages. Once you failed to file a claim by the time you found out that you can’t keep up with the necessary payments, you will eventually lose your dream home. Therefore, it is important for your to keep up a good communication towards you lender in order for easy access especially when this point of time comes. Another possible risk is that you might end up with dented credit when your insurance company defaults on making payments on time.

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Monday, September 3, 2012

Lender Mortgage Insurance Calculator—Why You Need It

When you need a lender’s mortgage insurance information, then you have to trust the lender mortgage insurance calculator. You might think that it is just like any other ordinary calculator we have but no, it’s not. This kind of calculator is barely the same as the common calculator because it is a product of technology that has a lot of purposes; it saves your traveling expenses and it is a great time-saver.

With this, you can get easier access to information from banks such as interest rates, policies and special offers of banks. It is indeed an incredible tool as it is able to suggest the best offer suitable to your situation.

Lender mortgage insurance calculator—in UK

These calculators can be very helpful in saving and budgeting the exact amount of money to purchasing your dream home. It is a tool that can calculate for you what you should take per month, per year, and/or during the whole period of your insurance. Whether you are a lender of a borrower, both can definitely benefit from it.

However, the lender mortgage calculator is much beneficial to borrower. It is because he can choose the best and the most affordable offer for him. Moreover, this calculator is customized according to its content, country and the unions it belong to.

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Sunday, September 2, 2012

Buy Your Home Now With No Deposit Home Loan

No deposit home loans have gained so much publicity as it is one of the most important means on how home buyers can take a deep breath and relax. This is on of the best alternatives solution to every home buyer. These home loans would only require the family to provide limited liabilities in order to guarantee that they can pay continually their needed payments.

However, there are still who wanted to buy a home that doesn’t understand what no deposit home loan is, its advantages and its terms. So to inform you, please watch this:

Understanding No Deposit Home Loans

This no deposit home loans allow those with a medium to high income; however, with a low equity to purchase a home. so if you are planning to avail this, it is advised to get a guarantor to secure a no deposit home loan. Also, get a no deposit home loan through a credit card.

No Deposit Home Loans With Fast Approval!!!

With this kind of help that the government has offered, you can secure a no deposit home loan without having the money for a deposit; and there can be additional features such as repayment and redraw options offered. What a wonderful it really is, right?

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