Skilled Migrant Professionals October 2014 | Page 22

Business
RATE CUT CYCLE OPPORTUNITY FOR
PROPERTY PURCHASERS

Now is the time
to get onto the
property ladder

S

pring is traditionally the busiest season for Australian real estate.
It’s a time when both homebuyers and sellers are eager to make
the most of the warmer weather. This year there has never been a
more ideal time to borrow, considering the significant drops in housing
prices and interest rates.
First-time homebuyers are returning to the market as affordability increases, often with costs similar or even cheaper compared to renting.
In other words, if you are considering purchasing a property over the
coming months, then it just might be the right time to do so.
Australia’s economy continues to perform considerably better than
most of its international counterparts. This is particularly true of the
housing market, which has experienced increased activity due to low
interest rates. The Reserve Bank of Australia (RBA) has actually placed
interest rates on hold – the first pause in its aggressive monetary policy
campaign since September of last year.
While some homebuyers may have hoped to see a bit more shaved off
their home loan rate, the RBA’s decision is a strong sign of its confidence
in the Australian economy.
Data from the Australian Bureau of Statistics (ABS) has shown a significant increase in the number of home loans taken out by Australians
since last year, while the level of first-time homebuyers has now swelled
to more than one-quarter of all property purchases.
Now is a great time for homebuyers to borrow funds thanks to the
return of 95% loans, interest discounts, lower fees, or even no fees at
all! In addition, Lenders Mortgage Insurance (LMI) can help you crack the
market sooner rather than later.
For many borrowers, saving up for a deposit can be a challenge, particularly when they have rent to pay, along with other living expenses.
LMI can be a powerful enabler for borrowers, essentially allowing them
to borrow more than 80% of the purchase price, therefore reducing the
deposit amount that is required.
A higher loan to value ratio (LVR) loan is considered to have more risk
for the lender, which is why LMI covers the lender in case you default on
your loan. Basically, it’s a one-off payment made when the loan is taken
out and is definitely a cost that needs to be factored into your calculations. However, LMI can be capitalised into the loan, allowing you to add
it onto the overall loan amount, which is paid off over time in line with
your mortgage repayments.
A robust credit score is vital to success. Many of us do not actually
know our credit rating, but applying for financial assistance is all about
credit ratings. The success or failure of every loan application relies on

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www.smpmagazine.com.au | October 2014

Clay Bland: Senior Mortgage
Consultant. Lifestyle Mortgages

it, but very few of us honestly know how well our debt management
strategies work when it comes to borrowing more money.
Finding out your credit rating is easy and by relying on the expertise
of a company like Lifestyle Mortgages, the whole process will only take
about 15 minutes and it’s free!
Once you know your credit score, Lifestyle Mortgages can also fill out
your loan application, if you want them to, and they can even deal directly with your bank to ensure that you’re getting the best product and
interest rates that are available in line with your requirements.