Monday, April 27, 2015

Should I get a home loan or continue paying rent



Australia is one country that has witnessed a sharp increase in the demand for property. There have been various debates on whether to continue renting or buy your house.  The house prices have been estimated to increase at a rate of about 2.4% per year not taking into consideration the inflation rate. By this estimate, one would benefit more from a mortgage over a period of about ten years as compared to renting for the same amount of time.
However taking into consideration the rate of inflation, the growth rate may decrease to about 1.7 percent thus one would take 30 years or more to break even.  Apart from inflation, there are other factors that influence the growth of property prices, and these include the Australiahome loan rates, repayment of home loan Australia loans and other ownership costs. All the above will influence one’s decision to decide to buy or rent and will also affect the bank’s mortgage rate. 


So what is the advantage of a home loan as opposed to renting?
The primary bone of contention in this debate is the cost effectiveness of either option. How much disposable income will one get at the end of the day? When one is renting a house, the money spent on rent only benefits the landlord but does not in any way make the tenant’s financial situation better. This is like money down the drain. When one buys a house, the monthly repayments that are equivalent to the rent, reduce the remaining balance on the house thus pushes the tenant closer to full ownership of the house.
The rate of inflation has affected a couple of cities such that buying property in this area may end up making you poorer. According to Cameron Kusher the RP data analyst, the location of the property plays a vital role in deciding between the two options. He gives an example of some suburbs in Melbourne and Sydney where the growth rate is placed at 2.9 percent in excess of the inflation over the last 15 -20 years. Therefore getting a property in these areas is bound to be more profitable.
Some analysts also argue that while many people would like to own property, they are unable to raise the deposit. The paradox of the situation is that these same people are living in areas closer to the urban areas thus increasing the living cost. Martin Beard, a former real estate agent, sold off his four properties and opted to rent. He attributes his decision to the amount of debt that one bears when trying to own property. He says that he enjoys the convenience of renting in a neat suburb that is also close to social amenities
At the end of the day, those who opt to buy rather than rent property have enjoyed certain benefits. They are like security of tenure, the freedom to make adjustments in the house and the pure comfort of coming to your home.
So the debate between the two options is still ongoing but one has to decide what will work for them in the long run. Take your time to consult a mortgage broker for guidance on the whole process of applying for a mortgage and the cost implications of a home loan Australia.

6 Tips to get your home loan approval first time



One of the biggest achievements in any adult’s life is the day they get to buy a house. People work at various jobs up to odd hours in order to make this a reality. Australia got characterized by an upsurge in the demand for houses, and this has been made possible by the favorable Australia home loanrates. You can get the best homeloans from a variety of financial institutions and upon Ken scrutiny you will get the best home loan Australia agency. 


The whole process of buying a house entails a couple of things that many people are ignorant about. And this is not only limited to the Australians but even to those who have migrated to the continent.
Below is a list of things that you will need before applying for a mortgage.

  • ·         Statements of all previous loans and credit card
  • ·         At least two recent pay slips
  • ·         The most current income tax returns
  • ·         PAYG summaries
  • ·         Most current personal bank statement

Remember that the most crucial detail is the state of your finances. Review your credit accounts history is it cards, loans or even phone bills. Ensure you clear any outstanding bills. This is because the lender will scrutinize all these records to check for any defaulting practice.
Ensure all the information you are given matches up, and there are no discrepancies as these will send a red flag to the lender and cause you application to be denied. Credit professionals come in handy to help sort these issues.
Any outstanding bills needs to be paid off before you start the application. Even those that you thought you had already made counter check to ensure you have. In case you have paid off any delinquencies these are recorded as bad history in your financial report, so it is advised you wait for about six months before applying.
Deposit size
The amount of deposit to place is one of those grey areas that people applying for mortgages are not aware of. The practice of lenders is that they prefer clients who can put down large deposits of at least 20%. Anything less will accrue an insurance charge that will make it more expensive. Therefore, you may want to save for a while longer in order to enable you to put down a larger deposit.
Mortgage brokers
This whole process of buying a house is very tedious, and there is a lot of information that one may not have. Mortgage brokers come in handy from helping you get the right home in an excellent neighborhood whose house prices appreciate rather than depreciate, and even which financial institution to borrow money from. They have a lot of knowledge on various lenders and their terms and conditions of being in the market for so long.
Thus by consulting them you are assured of the most competitive home loan Australia rates and even a faster process. They help you to know which documents you will need and in case of any disparities they can help you correct them before sending in your application. Therefore, you may have to pay an extra buck for this consultancy service but it will save you a lot of time and even money in term of getting the best mortgage rates.