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Is Your Home Loan Still Right For You? What to consider when refinancing

If this crazy year has taught us anything, it’s how life can change and chances are that since you got your home loan, interest rates have moved. Since you took out your mortgage, your life has probably changed a little too. Your income and expenses may have changed, and your financial goals could also be different.

With the Christmas holidays just around the corner, possibly bringing with them a little down time, now could be the perfect opportunity to review your finances and think about your goals.

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How to Avoid Paying Lenders Mortgage Insurance

Lender’s Mortgage Insurance (LMI) is insurance that covers the lender’s risk within a residential mortgage transaction in case the borrower fails to make loan repayments. A lender considers a loan to carry a higher risk if the loan-to-valuation-ratio (LVR) is more than 80 per cent of the purchase property price, this is when LMI is payable.

If you consider that the average price of a home in Brisbane is $550,000, that would mean a deposit of around $110,000 would be required. The major benefit of LMI is that borrowers with smaller deposits are able to enter the market sooner rather than later, allowing the dream of homeownership to become a reality for a lot of first home buyers.

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Your Comprehensive Guide to Common Banking Terms

As finance professionals we sometimes catch ourselves using jargon and acronyms that may inadvertently render our message useless to a person who is not familiar with the language of a lender.

With this in mind, we thought it was a good idea to put together a guide to help you make the most of your finances, by understanding some of the banking terms that are commonly used in the ever-changing world of finance.

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The First Home Loan Deposit Scheme

On January 1st 2020, the government rolled out their First Home Loan Deposit Scheme (FHLDS). This scheme is designed to help millennials buy a home sooner by removing the extra cost of Lender’s Mortgage Insurance (LMI).

Ten thousand borrowers will be eligible for the scheme this financial year with 3,000 spaces having already been taken. Another 10,000 spaces will become available from July 2020.

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Breaking news – December interest rate announcement

The Reserve Bank of Australia has delivered its final cash rate announcement for the year with the decision to leave the rate unchanged at 0.75%.

In making the decision the RBA appears to be assessing the impact on the broader economy of the three previous cash rate reductions together with recent tax cuts, government spending on infrastructure and signs of improvement in the resources sector.

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