Loan application checklist

Applying for a home loan is a long and complex process, involving everything from credit and reference checks to verification of employment and income.
To ensure that you have the best chance of getting your loan approved, we’ve compiled a checklist of some of the information a lender may require when assessing your mortgage application. Remember that requirements vary between financiers, so confirm the exact documentation you need directly with your lender or mortgage broker:

Information
- Full employment history
- Current and previous addresses
- Details of your current assets – car, motorbike, boat, collectibles etc
- Your income and outgoings
Employment documentation
- Current records of your salary
- Latest tax return/notice of assessment
- If self-employed, three years’ worth of tax returns
- A letter from your employer stating the tenure of your employment
Other documentation
- ID – 100 points, including passport etc
- Copies of recent credit card statements, confirming your credit limits
- Completed application for First Home Owner Grant
- Front page of the sales contract
- Six months’ worth of bank statements, to confirm genuine savings pattern
- Statutory declaration stating that funds gifted for the deposit do not need to be repaid (if applicable)
- Council rates notice for any properties you own, such as investment properties
- If purchasing an investment property, confirmation of rental income for the property (real estate agency letter)
Top tip: If you plan to reduce your credit card limit to improve your borrowing power, make sure you request the reduction with your card provider at least a week prior to applying for the loan. As you need to provide evidence of the decrease to the lender, this allows time for the card provider to send you written notice of your new credit limit.
Costs of buying
First homebuyers are often shocked at the number of expenses involved in buying a property – from legals and bank fees to government charges, the costs add up.
As a general rule, you should budget for around 10% of the purchase price to be spent on acquisition expenses. These costs vary, but the following checklist covers most of the common expenses:

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Sydney’s Housing Bubble Seen Surviving Tepid Loan Limits

Australian regulators are flashing warnings. Banks are vowing to curb lending. And that may not be enough to damp runaway housing prices.
At the urging of the financial services watchdog, the nation’s biggest mortgage lenders, including National Australia Bank Ltd., plan to trim the growth in loans to investors who have been on a home-buying frenzy. Regulators may have to impose stricter measures like those in New Zealand to cool Sydney’s housing market, said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd.
“New Zealand’s approach has been lot more direct and tougher, whereas here it’s about having a chat with the banks and expecting changes,” Oliver said.
The Australian Prudential Regulation Authority in December asked lenders to limit the expansion of investor mortgages to 10 percent a year, warning that those breaching that level will face higher capital ratios. Such a slight reduction from the 10.4 percent growth in March, the most in seven years, may not restrain housing prices that have skyrocketed 40 percent in Sydney in three years, according to CoreLogic Inc.

Investor Frenzy

“It’s modest and I wouldn’t expect it to have implications,” said Ben Jarman, a Sydney-based senior economist at JPMorgan Chase & Co. “If they push investor credit lower instead of reinforcing the current rate, then that would be a different story.”
Lending to investors is near a record high. The proportion of home lending to speculators rose to 40.8 percent in March, just shy of the 40.9 percent record in December, according to government statistics.
“The level of risk in banks’ mortgage portfolios has risen over the past couple of years,” Reserve Bank of Australia Deputy Governor Philip Lowe said at a conference in Sydney on Wednesday. “When risk moves up, both financial institutions and households need to respond to that.”

RBA Dilemma

The surge in lending adds to the RBA dilemma. While it’s keeping interest rates down to stoke growth in a sluggish economy, policy makers don’t want to inflame the housing market. The central bank’s key lending rate is at a record low, and the average benchmark variable mortgage rates are at a five-decade low.
“The RBA is trying to tread a middle ground,” Jarman said. “They have been seeing positive signs in home building, which is helping economic growth a bit.”
National Australia and Westpac Banking Corp. in the past month said they expected growth in lending to landlords to decline in the September quarter. Australia & New Zealand Banking Group Ltd. and National Australia said they were doing away with interest-rate discounts on investor home loans.

‘Monitoring Closely’

APRA has agreed on plans with the banks to slow the pace of lending and will be “monitoring closely to see that they kick into effect,” Chairman Wayne Byres said on May 13.
Australia has been a laggard in the region in tackling surging home prices that have eroded affordability and helped make its citizens among the most indebted in the world. Households carry a record debt of 153.8 percent of income while wage growth languishes.
Hong Kong, Singapore and most recently New Zealand have introduced measures to deter housing speculators. New Zealand this month said it will require investors to provide a 30 percent down payment to get a mortgage on Auckland property, and will more rigorously enforce taxation of capital gains on investment properties and ensure non-residents are included in the tax net.

Holding Capital

Australian regulators should require lenders to hold more capital against investor mortgages, cut discounts on rates and raise down payments for investment properties, AMP’s Oliver said. These tools should target Sydney because house prices haven’t surged in some cities and lower rates are needed for other parts of the economy, he said.
Lenders have been reducing the risk weightings they assign to their mortgage books, lowering the amount of capital they need to set aside. A government review of the financial system in December recommended a 25 percent to 30 percent floor for the mortgage risk weight compared with the 18 percent average held by the four lenders.
“If APRA is right, it should mean house price gains in Sydney should start to moderate but the question is have they done enough?” Oliver said. “There is a lot riding on APRA now.”


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Home loans fall in Australia month on month

Home loans to owner occupiers in Australia fell 7.3% in January but those approved to investors increased by 1.6%, according to the latest data from the Australian Bureau of Statistics.
The number of loans to owner occupiers for the construction and purchase of new homes declined by 5.3% and the number of loans to owner occupiers buying established homes, excluding refinancing, fell by 7.9%.
‘Lending figures indicate that the investor market performed a little stronger. Lending to investors building or constructing new homes, however, was slightly weaker during the month but remained markedly stronger than this time a year ago,’ said Housing Industry Association economist, Geordan Murray.

He pointed out that these results follow the Australian Prudential Regulatory Authority’s December letter to lending institutions outlining their intention to increase the level of supervisory oversight of mortgage lending.
The letter detailed some specific areas of concern noting high LVR loans, fast growth in lending to investors, and mortgage affordability in a (future) higher interest rate environment.
‘It is too early to determine whether APRA’s communication has had an impact in January. It will be interesting to observe the lending figures over the next few months to see how lenders respond,’ explained Murray.
‘It is important that the new home building sector is not pushed back into a credit squeeze whereby a lack of readily available finance becomes an industry wide problem,’ he added.
A breakdown of the figures show that on an annual basis the total number of owner occupier loans for new housing in January 2015 increased only in Tasmania which saw a 67.3% year on year rise.
In New South Wales the number of loans fell by 3%, in Queensland by 6.9T, in the Australian Capital Territory by 9.9%, in Western Australia by 12.3%, in Victoria by 12.4%, in the Northern Territory by 17.6% and in South Australia by 23.5%.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Loans to Australia's housing investors surge by $3.7bn

The figures add weight to the comment by the Reserve Bank last week that housing credit has become ‘unbalanced’

The value of loans to housing investors has surged at twice the rate of those to homeowners in August, lifting by 0.8%, or $3.7bn, to $417.1bn.
The figures add weight to the comment by the Reserve Bank of Australia in its financial stability review last week that housing credit has become “unbalanced”.
And they will encourage calls for the RBA to use “macroprudential” tools – rules and regulations – rather than just interest rates to rein in lending and prevent a dangerous boom/bust cycle in the housing market.
The overall amount that Australians owe on mortgages has notched up its fastest annual growth for three and half years. And the rise in investor loan value in the six months to August, 9.9% on an annualised basis, was the fastest since 2007, before the global crisis bit into banks’ ability to lend.
Housing debt rose by $7.7bn or 0.6%, between July and August. That lifted annual growth from 6.5% to 6.7%, its fastest rise since early 2011. Loans to homebuyers rose 0.4%, or $3.7bn, to $918.8bn.
The figures from the RBA on Tuesday don’t include cross-border lending, such as loans made by the offshore branches of Australian banks to buy properties in Australia.
Other measures of credit in the RBA’s figures were more subdued. Credit to businesses, aside from residential property loans, was unchanged in August, with annual growth of 3.2% barely beating consumer prices.
And other lending to households, which includes loans to buy shares as well as traditional consumer spending, was up only 0.2%, with annual growth at 1.1%.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Cooling home loan demand widens scope for Australia rate cut

Demand for home loans in Australia seems to be coming off the boil just in time to allay policymakers' concerns about a speculative spiral in house prices, so widening scope for a cut in interest rates next month.
Talk of a housing "bubble" has been rife in the media in recent months and was cited as one reason the Reserve Bank of Australia (RBA) skipped a chance to ease further at its April policy meeting this week.
Yet rising prices were far from a national phenomenon, with the heat concentrated very much in Sydney, where home prices climbed 2.6 percent in the last month alone, and are up 13.5 percent over the year, according property consultant RP Data.

That was well ahead of the second largest city, Melbourne, which managed annual growth of only 6.2 percent. In Brisbane, Adelaide and Perth prices rose between 1 and 3 percent.
Indeed, annual price growth nationally has slowed to 7.7 percent, from last year's peak of 11.5 percent,
Likewise, the speculative lending that most troubled regulators was very Sydney-centric. Loans for property investment in New South Wales had risen almost 150 percent over the past three years to account for near half the value of all mortgage approvals in the state.
The national trend was not nearly as strong and now seems to be softening as desired.
Australian Bureau of Statistics figures out on Friday showed loans for investment dropped 3.4 percent in February. It was the second month of falls and left the annual growth rate at the slowest since late 2012.
That could reassure the RBA that steps already undertaken by regulators will curb the worst of the speculation.
The country's main banking watchdog, the Australian Prudential Regulation Authority (APRA), has since December been breathing down the neck of any lender that was growing its mortgage book by more than 10 percent per year.
Institutions deemed insufficiently prudent faced everstricter controls, and ultimately an increase in the capital they needed to set aside to cover home loans.
APRA can tighten capital requirements for individual banks without having to make it public, which makes it easier to use and thus a more effective deterrent.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Forget the RBA – get your own rate cut!

Each month (except January) the Reserve Bank of Australia (RBA) meets to discuss our official cash rate and decide whether any adjustment is required in order to stimulate (or reign in) the economy. Whenever a rate movement is announced, CANSTAR sees a doubling in the number of people looking specifically to  refinance a home loan.

What does a rate change mean for your finances?

Whether you celebrating or curse the RBA when rates are lowered depends on whether you’re a borrower or a saver. For current borrowers, low interest rates are terrific and many would hope for further cuts. For savers, low interest rates are a downright curse and many would have breath a sigh of relief when rates are kept on hold.
Of course, the above emotions are reversed when interest rates rise!

For borrowers

Irrespective of rate cuts or not, those who currently have a mortgage are in clover right now, with home loan interest rates super-low. Currently on our database of loans, minimum, maximum and average home loan rates are as follows:

	Standard Variable	Package Variable	1 Year Fixed	3 Year Fixed	5 Year Fixed
Average	4.91%	4.44%	4.48%	4.54%	4.77%
Min	3.99%	3.98%	3.79%	3.99%	4.28%
Max	5.99%	5.10%	5.59%	5.59%	5.89%

Rates as at 7 July 2015, products on Canstar database.
As you can see from the above table, borrowers shouldn’t be complacent. Despite our low rate environment, there is still a two percent difference between the highest and lowest variable home loan rate on Canstar’s database. Even a half a percent reduction on a $300,000, 25 year home loan equates to almost $90 per month, or one thousand dollars per year. That’s easy cash in hand.
While the cheapest home loan isn’t always the right choice for your situation, the good news for borrowers is that there are a number of financial institutions offering a variable rate under four percent, so there’s plenty of choice out there. Currently on our database, there are ten variable rate home loan products available under four percent. There are also one, two and three year fixed rates available under four percent.

For savers

For those who are cashed-up as opposed to being in debt, our low official cash rate is not such great news. And of course, there is still economic chatter about rates being lowered throughout this year, so if you have cash to invest, think carefully about your options! You can compare current term deposit interest rates here.
While it may be little comfort, at least our cash rate could be worse!


Whether you’re a borrower or saver, it’s important to shop around for the best rate possible. Even with our currently-low overall interest rates, there’s still a significant difference between the highest and lowest home loan rates and term deposit rates in the market. Don’t settle for average!

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

How do you own your own home?

Australians aspire to own their own home. How do you do it? This was a question recently posed on my News Corp Gen Y column and while it might sound trite, the honest answer is: with great difficulty.

In June, we crunched the numbers on home loan affordability. Even at our historically-low home loan rates, an average-priced house takes 22% of after-tax income for a Victorian couple who are both on average salaries. In Queensland it takes 20% of the combined after-tax income and in NSW and Western Australia it’s 24% and 23% respectively. Heaven forbid if one of those two people should lose their job, want to take time out for study or take any unpaid maternity or paternity leave.

So if you do want to own your own place in a good location then the best advice I can suggest is to study hard at university, choose a career that you love and work really, really hard to excel at it. Because in the absence of any government appetite to limit the unfair influence of investor power in the housing market then you truly will need, as our Federal Treasurer baldly stated earlier this year, a good job. A really good job. As well as an ability to save.

Home loans: Going guarantor

Another option to get into the market is to potentially either borrow money from your parents or ask them if they would be willing to go guarantor. It’s not a request that should be made or granted lightly. If your parents go guarantor on your loan it means that they will be liable for the loan if repayments are not made. To be a guarantor it also means that your parents need to be able to demonstrate the capacity to repay.


Once you have managed to buy a home, of course, you still don’t really own it: the bank does. And by the way – make sure you compare home loans before you sign up as they can vary significantly in cost! Anyway – once you have your home loan it makes sense to get it paid off as quickly as possible. As an example, a $300,000 home loan over 30 years at an interest rate of six percent will cost around $647,000 by the time you pay it off. If you increase your repayments by, say, $300 per month though, that same loan would be paid off in 21 years at a total cost of $527,000. The same home, owned nine years sooner, and costing $120,000 less. That’s a good savings strategy!

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE