95% Investment property loans; 90% LVR Investment loans

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95% Investment property loans; 90% LVR Investment loans: What is the maximum loan to value ratio for investment property loans – July 2015

NOTE: Bank policy is now in a state of change this information is only valid at the time of writing 29 July 2015.

Bank policy has been changing recently. Some banks have stopped lending to investors. Others banks have reduced their loan to value ratios available on investment property lending and or increased their interest rates for investment property lending. There has also been changes to the serviceability calculators used by banks and lenders that reduce borrowing power in many cases.

We have been getting inquiries from property investors asking:

Is it still possible to get investment property loans at 90% loan to value ratios (LVR / LTV)?”;

Can I get an investment property loan with 10 percent down?

I have bought ‘off the plan’ can I still get a higher loan to value ratio investment loan?

What is the maximum investment property loan to value ratio available now

Will I need to pay much higher rates on an investment property loan now?

Whilst many lenders have changed their policies other lenders have not, well at least not yet.

It is still possible to get investment property loans to 90% loan to value ratio (LVRs) from some lenders. However, the number of lenders offering 90% loan to value ratio investment property loans are much less than before.

Yes, it is still possible to get investment property loans at 95% of the property value (LVR). However, because bank policy is changing rapidly it is advisable that you contact us immediately before this situation changes.  Contact us now for a 95% Investment property loan!

The maximum investment property loan to value ratio available is currently 95% LVR. Many lenders have stopped offering 95% loan to value investment property loans but some lenders are still offering these high LVR loans for investors. This lenders are generally not deposit taking institutions that are regulated by APRA. Instead they are regulated by ASIC. However, it is likely that in the near future ASIC may pressure these lenders to also reduce investment lending and they will also introduce policies similar to those of the major banks. Contact us now for up to a 95% Investment property loan!

Yes, investors can still competitive interest rates from some lenders it is advisable that you get your investment property loan approved as soon as possible to avoid a nasty surprise when shopping for low interest rates for investment property lending.

If you have bought off the plan and you are settling within the next few months you may want to contact us to check what options you have. Some lenders have longer periods where they will honor a loan approval before settlement. Contact us now for a high LVR investment property loan!

Oak Laurel mortgage brokers have access to a wide range of lenders and wide range of loans. Some mortgage brokers only have access to a smaller number of lenders and loans this can restrict your ability to access those lenders that have policies that suit your needs, including if you are property investor. This includes those lenders that currently still offer high loan to value ratios for investment properties.

 

 

Contact an Oak Laurel mortgage broker

Don’t delay act NOW!

+614 30129662

Oak Laurel Mortgage Brokers – Investment property loans made easy!

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RBA: further interest rate cuts likely – July 2015

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Reserve Bank of Australia (RBA) Governor Glenn Stevens stated the further interest rate cuts remains “on the table”

In a speech to the Anika Foundation Luncheon in Sydney on 23 July 2015, the Reserve Bank of Australia (RBA) Governor Glenn Stevens stated the further interest rate cuts remains “on the table”.

Here are some key points that the RBA Governor noted in his speech:

  • the financial spillovers from the Greek situation have not been large;
  • the likely direct economic [from Greece’s troubles] spillovers to the rest of Europe also seem fairly contained, since Greece is quite a small economy.
  • the “quite spectacular developments” in China’s equity market may end up having little impact on the Chinese economy;
  • the evolution of China’s property market and financial sector are likely to be more important;
  • the depreciation of the [Australian] currency is having an expansionary effect on the economy;
  • inflation that has been well contained;
  • despite the lowest interest rates that any current borrower has ever seen, the pace of lending to households remains moderate;
  • many Australians are saving more and using funds in ‘offset accounts’ to offset mortgages.
  • despite the doom and gloom and fulminations over the airwaves, in newspapers and in cyberspace, business confidence has risen in recent months.

The question of whether they [interest rates] might be reduced further remains, as I have said before, on the table.Glenn Stevens, Governor Reserve Bank of Australia

 

My commentary

Mortgage Broker Oak Laurel by Dr Nigel Abery (Ph.D.)

My conclusion from Mr Stevens’ remarks is that despite some instability in certain sectors of the Global economy, the Australian economy remains fairly stable and is adjusting from the mining led economy. There does not appear to be an immediate need for an interest rate cut(s). However, the RBA is prepared to cut if needed.

I believe that sometime in the next six months there will be an event (some poor economic news), that will not be a disaster for the Australian economy, but will spur the RBA to cut interest rates to boost consumer confidence and encourage spending. This of course will not only boost spending on consumer goods but also increase property prices in major capital cities.

 

Make your own interest rate cut – refinance to a better home loan

Don’t wait for the RBA to cut interest rates. Ask an Oak Laurel mortgage broker about what they can do for you and your loan package.

 

 

Oak Laurel Mortgage Brokers – Home loans made easy!

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COBA concerned about vertical integrated mortgage brokers

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The Customer Owned Banking Association has raised concerns about mortgage brokers in a submission to the parliamentary inquiry

The Customer Owned Banking Association (COBA) has raised concerns about mortgage brokers in a submission to the parliamentary inquiry into home ownership. COBA’s concerns include a misunderstanding of brokers limitations as far as lenders and products offered, obligations of the broker when offering products to the customer and the lack of disclosure regarding vertical integration in the mortgage broking industry.

According to the Mortgage and Finance Association of Australia (MFAA), aggregation/mortgage broker groups that are owned by the big 4 banks, totally or substantially, comprise an estimate of 40% of mortgage brokers. The COBA has strongly and repeatedly opposed vertical integration of mortgage broker groups with banks in the past.

Consumers (You) are right to be concerned about mortgage brokers being owned by the banks and lenders. Many of which have access to only a limited number of lenders and loan products, which may result in customers being directed to their owner’s (Banks) home loan products. Consumers want to visit a mortgage broker so that you can select from a wide range of lenders and loan products. If consumers wanted to go to a Bank and and over pay, then they don’t need to go to a bank owned mortgage broker, just be be fed that bank’s products. Consumers expect that a mortgage broker is owned independently from the bank.

  • Oak Laurel mortgage brokers are NOT owned by a big bank or other lender.

  • Oak Laurel are mortgage brokers owned independently from the big banks.

  • Oak Laurel are family owned mortgage brokers!

 

 

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New investment property loan rules: who are the losers

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First home buyers buying an investment property will be big losers from bank policy changes

First home buyers buying an investment property for the benefits of rental income and negative gearing will be big losers from the new lending requirements

 

Why would first home buyers buy an investment property?

With prices already high in Sydney, which first home buyer can afford to purchase an owner occupied home to live in? Super rich? People who want to spend most of their income repaying their mortgage? As a first home buyer, regardless of if you are buying in Sydney or another place, it can make sense to buy a first home as an investment property. The rent helps to make the mortgage payments and negative gearing helps out at the start when there is a shortfall between the rent and the mortgage interest.

What makes it harder for FHB to borrow for an Investment property now?

With lending policies making it harder to get higher loan to value ratio loans for investment properties, now first home buyers buying an investment property must somehow find additional savings to put towards the deposit. However, in rising markets like Sydney and Melbourne, property prices are rising faster than many first home buyers can save for the deposit especially when a larger deposit is required.

So what is the answer for first home buyers taking out an investment property loan?

If the first home buyer has family that want to help and the family member has equity in their property a guarantor home loan may be a good option.

Find out about Guarantor home loans here:

Guarantor home loan

Others can still access higher loan to value ratio loans for investment properties.

Don’t have family that can help you out? Maybe you are not even a first home buyer?

Some lenders are still lending at higher loan to value ratios for investment property loans. The many banks may have cowered to the pressure of the APRA but other non-bank lenders are not regulated by APRA and are operating as usual for investors.

It will be these non-bank lenders that will benefit from APRA’s crackdown as investors seek new ways to invest with leverage.

Need a hand to sort through the maze of lenders and their ever complicated lending policies?

Oak Laurel has mortgage brokers many of Australia’s major cities (Sydney, Melbourne, Brisbane, Adelaide, Perth and more). Contact an Oak Laurel mortgage broker near you to find out what your borrowing options are in the new lending environment.

Mortgage broker in Adelaide

 

Mortgage broker in Brisbane

 

Mortgage broker in Melbourne

 

Mortgage broker in Perth

 

Mortgage broker in Sydney

 

Will these new bank rules stop price rises in the housing market?

No, this is not the prick that bursts a bubble. There is still plenty of demand for property in Australia both from locals and foreign investors. Property investors borrowing to buy property may get a little spooked when they walk into their local bank branch and get told ‘no’. However, smart investors will go to a good mortgage broker, like Oak Laurel, and find out that there are still lending options available.

The rules are not designed to stop gains in the property market. In fact they are in effect designed to keep the property market going strong. The measures are designed to ensure that major banks are not too heavily secured by investor loans. It will really give the non-bank lenders who are not regulated by APRA a selling point and introduce a bit more competition into the investment property loan market and home loan market more generally.

 

Oak Laurel Mortgage Brokers – Home loans made easy!

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House rents at record highs in Hobart, Melbourne, Sydney

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House rents at record highs in Hobart, Melbourne and Sydney whilst Darwin and Perth showed decreases according to Domain rental report

Hobart followed by Melbourne showed the greatest percentage increase in house rental prices in the March quarter, 3.1% and 2.5% respectively. The average weekly house rents in Hobart rose from$320 to $330 over the last quarter whilst the average house rents in Melbourne rose from $381 to $390 per week. The rental increases primarily driven by solid migration levels.

Despite rents being at record high levels, rental yield in Australia’s two largest cities, Sydney and Melbourne have been eroded over the last year as rents are yet to catch up with capital gains. Sydney’s rental yield is down by 8.2% to 3.87% per annum over the last year whilst Melbourne’s yield is only down by 1.9% to 4.03% per annum.

With house rental prices rising and house prices rising even quick it is becoming even more difficult for first home buyers to get into the property market. It is therefore no surprise that many first home buyers are turning to the family to help them buy their first property.

Are you renting and want to buy? Does your family want to help you to get started in the property market? Find out about more about Guarantor home loans.

Guarantor home loans

 

 

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Australian property market 2015 forecast

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Australian property market 2015 forecast: Good news for borrowers and real estate owners

The reserve bank of Australia may not have cut the cash rate today but another 0.25% rate cut before the end of the year appears likely if not inevitable. This is good news for borrowers and other factors also make for good news for property owners as prices set to continue to grow over coming years.

Why interest rates are likely to remain low or get lower in the near future

Considerations by the Reserve Bank of Australia in reviewing and setting the cash rate included:

  • fluctuations in the economic conditions in Greece and China;
  • below average growth in the Australian economy;
  • inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate;
  • elevated but unchanged unemployment; and
  • the need to depreciate the Australian dollar (higher interest rates encourages buy and appreciation of the Australian dollar)

It is reported that a cut to the cash rate at this stage may ‘spook’ consumer confidence. It is also likely that the reserve bank board knows that a cut is needed but would rather postpone it so that in future if more stimulus is needed there is still some rate left to cut.

Why real estate prices are likely grow

Real estate prices are linked to interest rates to a large extent as most people know. So the current (low) interest rates are already stimulating the housing market. If there is a further cut, which is likely, then this will stimulate the housing market even more!

But there are other factors that will compound price growth in the Australian property market. However, these are not as broad based as a rate cut.

Australia’s two largest cities have already had property price gains but now, according to SQM research, the amount of housing stock on the market  has plummeted. In Sydney, the housing stock on the market has dropped  15.7% compared to june last year and in Melbourne the housing stock on the market has dropped a massive 20.2% compared to this time last year! With less properties available for purchase buyers will need to fight harder (and pay more) for properties in these two markets.

Australian population growth is creating demand for housing

With Australia’s population growth one of the fastest in the developed world the demand for housing in on the increase. Sydney is Australia’s largest city, Melbourne is Australia’s second largest city and is forecast by the Australian Bureau of Statistics to grow at a faster rate and will become Australia’s biggest city (population wise). Large populated cities tend to have high demand and high property prices as more and more people compete to purchase. This is not new but since it is such a driving force in the property market it needs to be mentioned.

Massive investment from overseas investors in Australian property

In addition to migrants, investment from overseas buyers is helping the property market grow. China with millions of millionaires have become Australia’s largest foreign investors in Australian real estate and are forecast to invest billions more over the next seven years. Some of these will be immigrants or parents of immigrants others just investors. These property buyers are buying in Australia’s largest cities and tend to focus on areas where there are already a large number of Chinese residents. Glen and Mount Waverley in Melbourne are excellent examples of that. These suburbs are popular among Chinese buyers. This has led to Mount Waverley becoming Melbourne’s highest growth suburb. These and other Chinese hot spots are likely be growth hot spots into the future.

As mentioned by the Reserve Bank of Australia there are some economic woes in China with the Chinese stock market showing a crash of sorts in recent times. This will only serve as an incentive for more wealth Chinese to diversify their investment offshore and with their love of real estate and proximity to Australia, the market here is sure to benefit.

Impact of the Australian dollar on property prices

Another factor fueling the Australian property market is a cheap Australian dollar, which the Reserve Bank of Australia only wants to be cheaper. When the dollar is cheaper our exports become cheaper and we can sell more of them. But our properties also become comparatively cheaper and foreigners can afford to spend more and again pushing up prices.

 

 

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Median house price soars in Mt Waverley

Median house price soars in Mt Waverley

by REBECCA DI NUZZO

WAVERLEY’S STATUS AS A PROPERTY HOT SPOT HAS BEEN CONFIRMED WITH THE SUBURB RANKING AMONG MELBOURNE’S TOP 25 SURBURBS FOR THE BIGGEST GROWTH IN HOUSE PRICES.

The median house price shot up 18.1 per cent to $980,000 in the year to March, eclipsing neighbouring Glen Waverley, to establish Mt Waverley as Monash’s star performing suburb, according to a CoreLogic RPData report.

Glen Waverley’s median house price grew 13.8 per cent to $990,000 in the same 12-month period.

Jellis Craig Mt Waverley agent Stephen Huang said the area’s Chinese community, elite schools, public transport options and The Glen made both suburbs popular with overseas buyers.

But the quieter streetscapes of Mt Waverley had become a major drawcard for families.

“For a lot of new migrants this (Mt Waverley) is the first choice,” Mr Huang said.

Source: Herald Sun

Are you thinking to buy a property in Melbourne? Maybe you are looking in Melbourne’s top top growth suburb Mount Waverley. Contact an Oak Laurel mortgage broker to find out your borrowing power.