|
|
|
|
|
Showing posts with label Mortgage Advice. Show all posts
Showing posts with label Mortgage Advice. Show all posts
Can you be saving bucketloads on your mortgage?
Are we in a Property Bubble
Interesting Article from Alex Lee of Ark Total Wealth www.arktotalwealth.com.au
This would have to be one of the most debated financial topics at the moment, with every 'expert' from around the globe having their say.
Using facts, theories, gut instinct or economics you could mount a strong argument for either side. The following articles provide an interesting insight into some of the alternative views by respected commentators and economists.
Treasury Secretary John Fraser warns Sydney is 'unequivocally' in a housing bubble.
ANZ's Chief Mike Smith doesn't believe we are in a housing bubble but we could be heading that way if we aren't careful.
ABC's Alan Kohler writes that we are not in a bubble, but merely watching market forces taking place which means we may have over-valued property for a considerable amount of time.
Domain executive editor, Stephen Nicholls has analysed the doomsday experts in his article today on Domain.
Every expert will have their own opinion - what we believe is important is making efficient use of your resources, and managing risk regardless of the prevailing economic conditions.
To get you thinking, here are some ideas on that you can be doing right now;
1. Take advantage of the low interest rate environment - If you are a property owner, and hold debt, then almost certainly in the past you have been making repayments at a higher rate of interest. What are you doing with your extra cash flow? A low interest rate environment is a great opportunity for you to pay down additional debt to get ahead for when interest rates eventually increase.
In addition to making extra repayments, if you are worried about your cash flow moving forward now might also be a good time to fix your interest rates. There are a selection of lenders whose fixed interest rates are currently lower than their variable rates. This may be an additional opportunity to create some extra cash flow which can be used to repay debt or invest.
2. Be strategic on which lender you use - Whether we believe the property market is overheating or not, banks are being forced by APRA to tighten their lending - this means increasing their interest rates on investment properties and lowering acceptable loan to value ratio's. This tightening has created quite a large differential between lenders which means it is important to shop around to find the right loan for you. We have mentioned it before, but while a low interest rate is important it's also just as important to understand which product has the features and benefits that suit your specific situation.
3. Build your buffers - Property is a long term investment - it is not about picking the absolute bottom or selling at the top it is your ability to be able to hold the investment through good and bad times. To do this, you need to put in place the appropriate buffers to help you should times get tough. For example, do you have the following in place;
- 6 months' of interest payments in cash to get you through any cash flow shortfalls
- Income Protection to ensure you have a replacement income should you not be able to work due to injury, illness or sickness
We are not experts in picking the property cycle, however we strongly believe that regardless of what the market is doing there are strategies you can put in place to put yourself in a better position. If you have any questions, please don't hesitate to contact us on info@arktotalwealth.com.au or visit our website www.arktotalwealth.com.au for more information.
Using facts, theories, gut instinct or economics you could mount a strong argument for either side. The following articles provide an interesting insight into some of the alternative views by respected commentators and economists.
Treasury Secretary John Fraser warns Sydney is 'unequivocally' in a housing bubble.
ANZ's Chief Mike Smith doesn't believe we are in a housing bubble but we could be heading that way if we aren't careful.
ABC's Alan Kohler writes that we are not in a bubble, but merely watching market forces taking place which means we may have over-valued property for a considerable amount of time.
Domain executive editor, Stephen Nicholls has analysed the doomsday experts in his article today on Domain.
Every expert will have their own opinion - what we believe is important is making efficient use of your resources, and managing risk regardless of the prevailing economic conditions.
To get you thinking, here are some ideas on that you can be doing right now;
1. Take advantage of the low interest rate environment - If you are a property owner, and hold debt, then almost certainly in the past you have been making repayments at a higher rate of interest. What are you doing with your extra cash flow? A low interest rate environment is a great opportunity for you to pay down additional debt to get ahead for when interest rates eventually increase.
In addition to making extra repayments, if you are worried about your cash flow moving forward now might also be a good time to fix your interest rates. There are a selection of lenders whose fixed interest rates are currently lower than their variable rates. This may be an additional opportunity to create some extra cash flow which can be used to repay debt or invest.
2. Be strategic on which lender you use - Whether we believe the property market is overheating or not, banks are being forced by APRA to tighten their lending - this means increasing their interest rates on investment properties and lowering acceptable loan to value ratio's. This tightening has created quite a large differential between lenders which means it is important to shop around to find the right loan for you. We have mentioned it before, but while a low interest rate is important it's also just as important to understand which product has the features and benefits that suit your specific situation.
3. Build your buffers - Property is a long term investment - it is not about picking the absolute bottom or selling at the top it is your ability to be able to hold the investment through good and bad times. To do this, you need to put in place the appropriate buffers to help you should times get tough. For example, do you have the following in place;
- 6 months' of interest payments in cash to get you through any cash flow shortfalls
- Income Protection to ensure you have a replacement income should you not be able to work due to injury, illness or sickness
We are not experts in picking the property cycle, however we strongly believe that regardless of what the market is doing there are strategies you can put in place to put yourself in a better position. If you have any questions, please don't hesitate to contact us on info@arktotalwealth.com.au or visit our website www.arktotalwealth.com.au for more information.
Pay off your credit cards and refinance if you can
from Jim Ellis from Smartline
Do you have credit card or personal loan debts that stubbornly refuse to go away? We may have a solution.
Whilst a minimum monthly credit card repayment of 3% seems quite easy to handle at first glance, a $30,000 debt will require a $900 per month payment. A significant commitment.
Compare this with a current $30,000 home loan and the minimum repayment would be approximately $157 per month (see below).
Given the right set of circumstances, we can sometimes alleviate this type of cash flow burden by consolidating credit cards and personal loans into a residentially secured loan.
However, if this option is not possible or desirable, there is one very effective long term solution.
"Cut it up and pay it off."
"Cut it up" - This part of the solution is often seen as too difficult because shopping with a credit card is so convenient, however, the credit card organisations such as Visa and MasterCard now offer debit card facilities which give people all of the efficiencies of using a credit card without the temptation of using the credit.
“Pay it off" – This part of the solution can be made easier too. Most credit card providers have a direct debit system that will allow customers to make automatic fixed repayments (similar to a personal loan) on their credit card.
We believe that long term debt should only be used for buying assets that have a reasonable chance of appreciating. Holidays, cars, LCD screens and boats generally head the other way and should only be financed over a shorter term. There is nothing worse than a big debt with nothing to show for it.
This is a sensitive issue to bring up with people but if you know of anyone that would like to talk to us about getting their credit cards or personal loans in order, we would be more than happy to assist with some confidential and useful advice.
Do you have credit card or personal loan debts that stubbornly refuse to go away? We may have a solution.
Whilst a minimum monthly credit card repayment of 3% seems quite easy to handle at first glance, a $30,000 debt will require a $900 per month payment. A significant commitment.
Compare this with a current $30,000 home loan and the minimum repayment would be approximately $157 per month (see below).
Given the right set of circumstances, we can sometimes alleviate this type of cash flow burden by consolidating credit cards and personal loans into a residentially secured loan.
However, if this option is not possible or desirable, there is one very effective long term solution.
"Cut it up and pay it off."
"Cut it up" - This part of the solution is often seen as too difficult because shopping with a credit card is so convenient, however, the credit card organisations such as Visa and MasterCard now offer debit card facilities which give people all of the efficiencies of using a credit card without the temptation of using the credit.
“Pay it off" – This part of the solution can be made easier too. Most credit card providers have a direct debit system that will allow customers to make automatic fixed repayments (similar to a personal loan) on their credit card.
We believe that long term debt should only be used for buying assets that have a reasonable chance of appreciating. Holidays, cars, LCD screens and boats generally head the other way and should only be financed over a shorter term. There is nothing worse than a big debt with nothing to show for it.
This is a sensitive issue to bring up with people but if you know of anyone that would like to talk to us about getting their credit cards or personal loans in order, we would be more than happy to assist with some confidential and useful advice.
Jargon Busting
10 Reasons Why You Should Use a Mortgage Broker
Ten Tips To Help You Repay Your Home Loan Sooner
Fixed versus Variable
To Fix or Not to Fix – that is the Question!
Interest rates have been dominating the headlines since the GFC (Global Financial Crisis), but did you know that the latest hot topic is fixed rates? The reason is that there has been a bit of a price war going on between the lenders in the fixed rate market for the last few months and whilst some lenders have recently increased their fixed rates, others have reduced them.
Subscribe to:
Posts (Atom)