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Carol from Vista Financial

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About Carol from Vista Financial

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  1. Carol from Vista Financial

    Current mortgage rates and special offers

    Good morning world Testing out a new format that I hope will be a bit easier to read. Let me know what you think!
  2. Carol from Vista Financial

    RBA cash rate decision 6 November 2018

    On hold again, as most predicted. "Growth in China has slowed a little, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector. Globally, inflation remains low, although it has increased due to both higher oil prices and some lift in wages growth. A further pick-up in inflation is expected given the tight labour markets and, in the United States, the sizeable fiscal stimulus. One ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States. ...In Australia, money-market interest rates have declined recently, after increasing earlier in the year. Standard variable mortgage rates are a little higher than a few months ago and the rates charged to new borrowers for housing are generally lower than for outstanding loans. ...Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Growth in credit extended to owner-occupiers has eased but remains robust, while demand by investors has slowed noticeably as the dynamics of the housing market have changed." Read the full release here.
  3. Carol from Vista Financial

    Lenders Mortgage Insurance (LMI)

    What is it? Lenders Mortgage Insurance or LMI is an insurance policy that protects the bank from financial loss if you can’t pay your loan back. LMI cover protects the lender, and you pay the premium. That’s right, you are paying to protect the bank from yourself! When/why is LMI applicable? Normally LMI is required if you request to borrow more than 80% of the property value, as this is deemed riskier to the lender. Why? You’ve put less money in, your repayments will be higher, and they have more to lose. So, they hedge their bets by insuring themselves. If you default on the loan (i.e. don’t/can’t pay), they will chase you for the funds. If that doesn’t work and as a last resort, they will re-possess and sell the house to pay the debt. If the sale of the property isn’t enough to pay the outstanding debt, the lender makes a claim with the insurer to recover the difference. (Important to note – even if the lender gets all the money back from the sale or insurer, this is doesn’t absolve you from your debt – there is sadly no get-out-of-jail-free card.) How much is it? LMI can be very expensive. The cost is determined by a number of factors including the loan to value ratio (i.e. how much you are borrowing compared to the purchase price), the size of the loan you want (costs increase exponentially), if you are a first home buyer or not, and the insurer. The two main insurers in Australia are QBE and Genworth, but some lenders also self-insure. You can get a rough idea on the cost of LMI here, but take it with a grain of salt as it does vary between lenders. How do you pay for it? You can pay it upfront or most lenders will allow you to add this to the home loan amount (i.e. capitalise it). Most people opt to add it to the loan. Why on Earth would you choose to pay LMI? Saving a 20% deposit is very hard, and can be almost impossible for some. LMI enables you to purchase without having to have 20% deposit, so is actually quite a popular option. How to avoid LMI? Save like crazy to have a 20% deposit. If not, there may be other options, including gifted funds from the Bank of Mum and Dad or using a guarantor. For a lucky few LMI waivers sometimes exist with some lenders – normally restricted to those in the medical profession or specific white-collar professions. Normally strict criteria apply. Important fact to remember LMI protects the lender, it does not protect you! As a borrower, this type of insurance does not offer you any protection whatsoever. LMI is often confused with mortgage protection insurance - a type of insurance that protects you if you lose your job/fall ill and can’t meet a repayment. This is a completely different insurance, so note the difference. If you still have any questions regarding LMI, get in touch so I can help.
  4. Carol from Vista Financial

    Current mortgage rates and special offers

    Hi all A few changes. These offers are now no longer available: New offers: - 3.65% owner occupied principal and interest - 3.95% 5 year fixed principal and interest First Home Buyer (owner occupied) special - 3.95% variable investment principal and interest - 3.76% 3 Year Fixed owner occupied with offset available All other remain valid as of today. Important: These are separate offers not in conjunction with any others stated previously and are subject to meeting lender terms and conditions. Fees and charges may apply. Thank you
  5. This report into housing has been released recently, produced by BIS Oxford Economics for QBE Lenders’ Mortgage Insurance. You may read the report on their website or download the full interactive PDF report here. Short on time? Watch their short video instead. If you want to read more download the PDF and click on the titles on the contents page to navigate to the parts you care about. Where did this report come from? QBE is one of the two main lenders mortgage insurance providers in Australia - the other being Genworth. BIS Oxford Economics is a large macroeconomics and industry forecast provider. The two companies have partnered for the last 17 years to generate these reports. What is LMI? Lenders mortgage insurance (LMI) is an insurance you pay if you have less than 20% deposit (i.e. you borrow more than 80%) for a property purchase. LMI protects the lender, it does not protect you. If you put in less cash, it is a riskier transaction for the lender. Hence they hedge their bets. If you can't pay, they will chase you for the funds, and they submit a claim through the LMI provider to try recoup their losses. That's right, you pay for the lender's insurance premium so they are protected from you! Normally the LMI premium can be added on top of the the base loan amount (capitalised). Or you can save like crazy to have a 20% deposit, or use a guarantor. Are their predictions for the future accurate? Who knows, I don't have a crystal ball either. This is an outlook report - an insight into the property market in Australia. A predication is still essentially an educated guess, but an interesting read nonetheless. I am providing it here as one source of information. Make of it what you may.
  6. Carol from Vista Financial

    Greetings guys

    Welcome to Adelaide @ErnstGlaser!
  7. Carol from Vista Financial

    Someone migrating to Adelaide this September

    Hey @Sanjay Just came across your post. Hope you have settled in ok from your move! Assuming you may be working at LMH, the RMO Society there is quite welcoming so hope you have been able to make some friends up that end of town. All the best
  8. Carol from Vista Financial

    Current mortgage rates and special offers

    One day left until Friday! So, despite a few rate movements up and down and the release of the interim report from the Banking Royal commission into misconduct, the rate out there are still very much the same. Lenders are now focusing on their special policy niches, and rebates. Changes to note: - the lowest variable rate on owner occupied principal and interest that I previously quoted above for 3.64% and the intro rate for 3.59% are now both no longer available - the new lowest advertised rate on our panel of lenders for owner occupied principal and interest is now 3.67%. A lower rate may be able to be negotiated for substantial amounts of lending but lenders are now digging their heels in, even when it comes to price matching against another lender. - one lender has finally introduced a purchase 'round up' feature linked with your home loan - i.e. you buy something like your morning coffee, it is rounded up to the nearest $1 or $5 and the difference is transferred onto your mortgage to help you pay it off quicker and reduce the amount of interest you pay - if you are looking to refinance and purchase a new property, you may able to access both a refinance rebate of $2,000 AND a new purchase cash back rebate of $1,500 subject to criteria. That's a total of $3,500, just saying. Important: these are separate offers not in conjunction with any others stated previously and are subject to meeting lender terms and conditions. If you are thinking of making changes to your home loan, start the process now. Nobody likes paperwork during holiday season - banks included. If you wait until Christmas Eve, it will be slower - they take holidays too. Thanks for stopping by
  9. How long does it take after moving to Oz to secure a mortgage? Short answer: it depends. I can see the rolling of the eyes from here. Different banks have different criteria, you need to tick the boxes. However long that takes, that is how long you have to wait. There are no hard fast rules on how long you ‘should wait’ to buy a house but there are some important things to know. The process itself is super quick The actual purchase process here is a lot quicker than in the UK. The never ending chain of teetering disappointment is very rare here. Property is bought and sold within weeks. Find out how much the banks will lend you, find a suitable house, put an offer down, exchange contracts, settle and move in. From start to finish in Australia you can be putting down an offer on a house today and potentially be moving in 6 weeks later. It can be that quick. Are you actually ready to buy? Why do you want to buy? Are you in a rush to buy? Why? Do you know the exact state and suburb you want to live in? Will the kids be accepted into the school there? Are you happy with that school? Is your commute to work a nightmare? Is it a dodgy area? If you have just arrived, renting is a great way to get to know Australia and trial out living in different places so you know exactly where you want to buy. The last thing you want to do is buy in an area soon after arriving only to realise your dream location is on the other side of the country. Where to start Ok, let’s assume you are set on buying as soon as possible. The first step is figuring out what it will cost overall and where is the money coming from. If you have enough to cover the shortfall between what it costs and what the bank will lend, you are good to go. If you don’t, then you need a plan on how to change that. Do you need to save more? Or do you need to wait for some circumstance to change so the banks are more favourable towards you (e.g. do you need to complete probation? Does the bank require you to have worked for longer than 6 months?). If you are a PR or Australian Citizen with 20% deposit (plus costs) then happy days, the banking world welcomes you with open arms. If not, don’t give up! There are so many different banks and policies out there so you don’t know exactly until you have had a professional unequivocally tell you so AND (most importantly) what you need to do to change that. If you are a temporary resident most banks may only lend you 60 – 70% these days. BUT if you purchase with someone who is PR or a Citizen then it can be a whole different ball game. It all drills down to finding the best fit for you. One last thing. Comprehensive Credit Reporting (CCR)- Australia is catching up If you are coming from the UK you probably already know all about credit scoring and the importance of having a clean bill of financial health. Australia has technically had CCR in place since 2014, but the uptake has been sluggish. This is about to change and may be a rude awakening for a lot of Aussies. From 1 July 2019 all major banks are required to share 100% of their data with credit reporting bodies, so this will become more and more relevant here, as it is in the UK, in the coming years. As of right now, lenders are slowing sharing their data and eventually will use this as a tool in their lending decision making. So whilst I wouldn't run to get an Aussie credit card, it is not a bad idea to think about ways to start developing your credit rating here, because it will be a brand new file. Setting up with an Australian phone plan is a good start, and if you are renting first even paying your utilities bills on time can help build up your score. Keep in mind that yes, a good credit score can help, but some banks value it more than others and it is not the be all and end all at the moment. What is more important is knowing which bank to go with and what is best for your particular circumstance. Hope this helps, any questions feel free to ask!
  10. Carol from Vista Financial

    RBA cash rate decision 2 October 2018

    Hi all Bit behind the 8 ball and catching up on some posts after a few busy weeks. A lot happening in the mortgage market with rate moves, refinance offers, lending policy changes, the Banking Royal Commission interim report released and more! First things first - the RBA. Last week to no ones surprise the RBA left rates on hold again: "In Australia, money-market interest rates are higher than they were at the start of the year, although they have declined since the end of June. In response, some lenders have increased their standard variable mortgage rates by small amounts, while at the same time reducing mortgage rates for some new loans. ...Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Growth in credit extended to owner-occupiers remains robust, but demand by investors has slowed noticeably as the dynamics of the housing market have changed. Credit conditions are tighter than they have been for some time, although mortgage rates remain low and there is strong competition for borrowers of high credit quality." Full release can be read here More on the rest soon, watch this space!
  11. Carol from Vista Financial

    Westpac rates increasing... will the others follow suit?

    Sadly, more often then not the little man does get trampled @scooterdan! Other lenders have actually also increased rates, but due to the sheer market share of the Big 4 they do certainly take the spotlight, particularly in conjunction with annual profit announcements, albeit lower than they were hoping for. Seems NAB are taking advantage of the situation here though... As you may have heard already there has been no move by NAB to increase their rates - their media statement saying they are holding them for now in an effort to 'rebuild customer loyalty'. Is this the case or are they just being opportunistic in an effort to capture market share? If they do eventually move rates to account for increased funding costs like the others, are they merely setting themselves up for a bigger fall from a moral high ground? I think their marketing team will have to prove their worth and really pull a rabbit out the hat if/when they do increase them.
  12. Carol from Vista Financial

    Westpac rates increasing... will the others follow suit?

    ANZ increases their rates first, CBA follows a few minutes later CBA increase by 0.15% ANZ increase by 0.16% You can read their media releases here: CBA announcement ANZ announcement (note here they have advised that those people living in postcodes they have deemed as drought affected will also have an equivalent increase in a discount - which means they don't escape the base rate rise, but are given a discount of the same 0.16% so they aren't impacted) No word on NAB just yet.
  13. Carol from Vista Financial

    Current mortgage rates and special offers

    Happy Thursday everyone! Apologies I didn't get a chance to post yesterday, got caught up in a few calculations from people wanting to vote with their feet and move banks. Have you thought of sacking your bank? I am a coffee addict, and if the barista gets it wrong, I sack them. I go somewhere else. I sadly throw my loyalty card in the bin and get mad that they didn't reward me as an existing loyal customer. Then I move on and start fresh somewhere else where they don't burn the milk and value the outrageous $4-something that I fork out for someone else to make my caffeine fix in the mornings. Why is it we don't think the same way with something that costs us hundreds per month? Why don't we shop around? Because it is too hard, and takes too much effort, and no one likes paperwork. So off it goes into the too hard basket to sit indefinitely next to cleaning-out-the-spare-room. But yet we will invest the time to shop around for clothes, food, shoes, coffee, you name it. Why is this relevant today? Because unless you choose to truly - thoroughly - investigate your options other than glance at the specials I put up weekly, you won't actually know the potential savings out there. Inaction is still a choice, so invest the time to do the sums yourself, or get someone else to. Despite Westpac, Suncorp and Adelaide Bank increasing their rates and other banks reducing their rates to try capture those annoyed clients serious about moving, all the above offers I have mentioned still remain the same, and have not actually changed. Why? Because lenders rely on your inaction. They rely on the fact that despite public uproar, Royal Commissions and disappointment, the majority still do nothing and stay where they are. So why would need to keep winning your business? They don't need to. Because if the vast majority of their existing clients don't actually jump up and leave, why would they have to reward loyalty and incite any true competition? I can't count the number of times that clients have tried and tried to get a better deal with their existing lender, get nowhere, go through the process of getting a refinance approved, only to finally have their bank call them when they receive a mortgage discharge request and offer them exactly what they have been asking for all along. "Hang on, you're actually going leave? Oh, don't do that, here, have this, we still love you". To top it off, many clients then end up staying! And I can understand this, they got what they wanted. But so did the bank. They leave it to the absolute last minute, call your bluff, and only then concede a tiny fraction of their overall profit at the eleventh hour to keep you after all. Does this sound like a lender that truly values your loyalty? Don't kid yourself. We are not special to them. But if we continue this cycle, there is no reason for them to change their behaviour. So do your homework, don't choose inaction. Do some sums here as a starting point. There's more to it than that, but it's a start. It could well be that you won't benefit at all, and that is fine! At least you checked! And at the end of the day if you can't be bothered, take it out of the too-hard-basket and ask me to do it, it's my job. Until next time.
  14. No change again, rate remains on hold: "Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality." - Statement by Philip Lowe, Governor: Monetary Policy Decision, 4th September 2018 But as we can see from this past week, this is only one factor used by lenders in determining whether or not to move on rates. Is it to cover cost of wholesale funding or to recoup upcoming fees for civil penalties? Watch this space. Full release by RBA available here.
  15. Westpac admits to breaching responsible lending obligations and now up for a $35 million civil penalty: "If approved by the Federal Court, this will represent the largest civil penalty awarded under the National Credit Act." - recent ASIC media release today 4th September 2018 Read the full ASIC media release here.

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