Household Income Homebuyers Surged to $220,000 – Clinton’s interview on Home Affordability!
Listen to episode #928 of @therealestatepodcast where Clint is interviewed by the shows host Craig. In this short 15 minute podcast Clint provides his expert insights on home affordability, interest rate forecasts, the surge in household homebuyer incomes, and the dynamics of sharing property ownership.
When it comes to your money, especially a significant commitment like a mortgage, loyalty to your bank might seem like a good idea. Many homeowners tend to stick with their original lender out of familiarity, a sense of loyalty or sometimes because they think it’s too hard to change. However, the mortgage landscape is constantly evolving, regardless if interest rates are increasing, decreasing or going sideways and sticking with your bank probably isn’t always in your best interest – not that they will tell you this…
Is maintaining allegiance to your bank when you have a mortgage crucial? Or does prudently exploring better deals that align with your interests make more financial sense?
The notion of loyalty to your bank is deeply ingrained in many individuals. Often, people associate familiarity and a long-standing relationship with their bank as a form of security. However, while loyalty may have its merits in certain aspects of life, it might not always pay dividends in the realm of your home loan and your hard-earned dollars.
You would think that being loyal means you should get a better rate or a discount like you do with your insurance company, but this is often not the case. While you might get a slight improvement by haggling with your old bank the overall system is hugely hungry for ‘book growth’, meaning banks and lenders will usually trip over themselves to get new customers in the door and rely on their ‘loyal’ customers to stay put at higher rates – it’s just the way the system often works. Even when you get your current bank to tweak your rate, there will come the point when the ‘computer says no’ because the return on their loan isn’t worth it anymore for a host of technical reasons – you might think you got a better deal, but did you?
Mortgage rates fluctuate regularly. What might have been a competitive rate when you initially secured your mortgage a few years back could now pale in comparison to newer, more favourable deals available in the market. By limiting yourself to one lender, you could potentially miss out on a better interest rate or more favourable terms offered by other banks and lenders.
One of the keys to ensuring you’re not missing out on a better deal is to review your mortgage at least every one to two years. This proactive approach allows you to assess if your current loan still aligns with your financial goals and if there are better options available. You are probably unsurprised that banks don’t prioritise this process, and they are not obliged to always act in your best interest – licensed mortgage brokers are, however! This means you may be unaware of a better rate available from your current lender or someone else in the market.
This is where the expert mortgage brokers at AXTON Finance can help save you a lot of time and money. AXTON Finance is committed to empowering homeowners by regularly reviewing their loans with automated repricing tools that needle your bank or lender to ensure you get the best rate for your scenario. After all, if we are not doing this on your behalf, we are certain you will and that you may leave us! One of our primary goals is to create a long-term relationship with you as your trusted mortgage broker. We do not treat you as a once-off transaction!
Our efficient digital systems ensure that your mortgage is reviewed at least annually, ensuring that you are getting the best possible rate and terms that suit your needs.
Unlike dealing directly with banks and online lenders, AXTON Finance is dedicated to working in your best interest. Our team of experienced mortgage brokers navigates the complex mortgage market on your behalf, identifying tailored structures and negotiating to secure lower interest rates and favourable terms.
We provide you with personalised attention, ensuring that your financial goals are understood and catered to effectively.
While bank loyalty may have been a thing when 20th-century bank managers had authority, it’s now essential to recognise that in modern home and investment loans, blind loyalty to your bank might only sometimes serve your best interests. Regularly reviewing your mortgage and exploring better deals is indeed a smart financial move but getting experienced advice from the leading mortgage brokers at AXTON Finance will help ensure your best interests and not the banks are being served!
We know that your mortgage is not just a set-and-forget transaction but an evolving instrument that adapts to your changing financial needs. Don’t wait for your bank to offer you the best deal; take control of your financial future today. Contact AXTON Finance, Melbourne’s trusted mortgage brokers, and experience our personalised service, efficient systems, and dedicated team, who can help you secure a better mortgage approval.
At Axton Finance, we take pride in being your preferred mortgage broking professional. With over two decades of experience and more than 250 Google five-star reviews, we’ve built our reputation as one of the best mortgage brokers in Melbourne, based on a foundation of trust, expertise, and tailored solutions.
The word “Axton” holds a special meaning for us.
When Clinton Waters established Axton Finance in 2014, his research in determining our name unearthed the significance of “Axton” as an old English word meaning the cornerstone of a building.
Just as a cornerstone is a crucial element in constructing any building, providing the stability and support that anchors the entire structure, we see ourselves as the cornerstone of your financial journey for your property purchasing and refinancing needs.
Another intriguing aspect of our name, Axton, lies in another possible old English origin. It’s also been defined as the combination of two Old English words: “eax,” meaning “axe” or “sword,” and “tun,” meaning “stone” or “settlement.” This combination gives “Axton” a profound and meaningful interpretation.
“Axton” can be seen as “sword stone” or “settlement with swords.” This name carries connotations of agility and resilience. Just as a well-forged sword offers protection and security, we, at Axton Finance, are dedicated to providing you with reliable and tailored mortgage advice that serves as the leading edge of your financial journey.
In the same way a sword is honed and sharpened to perfection, we carefully craft and fine-tune mortgage advice that suits your individual needs and circumstances. We understand that every client is different, and we are here to ensure that your mortgage options are presented to you that promotes your needs and not the banks!
Axton Finance isn’t just a name; it’s a reflection of our commitment to providing you with a solid foundation for your property dreams and offering you the reliable and trusted advice that you deserve.
Get in contact with us today on 1300 706 540 or click our contact form to discuss your needs with us.
Over the past 2 weeks we have fielded numerous enquiries from our clients with questions and concerns about how to approach lenders for hardship support relating to COVID19 and the impact this may have on their mortgages, rates, credit histories etc.
To ensure our clients get the most accurate advice, AXTON Finance have been in regular contact with the banks and lending institutions we work with and with whom all of our clients have mortgages.
In our earlier communications we noted that a hardship repayment holiday is not ‘interest free’ and that such a holiday may extend the term of the loan or the interest you pay over the life of the loan. As such, it is important to understand what this means for your long term, and that if you have some capacity to make repayments towards your loans, then it may serve you well to do so.
The encouraging fact to note is that all lenders have in place support for borrowers to receive repayment assistance.
The most important action anyone can take under these trying circumstances is to proactively communicate with your lender, and to do so before any repayments are delayed or missed.
Banks and lenders approach and support to hardship is evolving, and as we write this, most lenders are treating the conversion of a principle loan repayment to interest only as ‘credit critical’ (this means such a change to your loan contract will only be permitted through a full assessment via a loan application). There is some political push from the government towards the banks and lenders to simplify this process, however as it stands a full assessment is usually required.
What is useful to understand, however, is that in applying for and obtaining hardship assistance means whilst it is not necessary for you to make a repayment during the hardship period, you may be permitted to.
The upside here is that in remaining under a P&I agreement, you will be incurring interest at a lower rate (Interest only terms tend to be priced higher for risk). So you may effectively be getting interest only terms at a lower rate without actually needing to go through a full loan assessment (providing you meet the hardship criteria).
There is some inconsistency between lenders as to how they treat the repayment. Some lenders advise these payments will be available for the borrowers during and after the hardship period if they needed to redraw. Others have advised these are not. So it is very important to ask your lender what availability you will have to cash paid into your loan during or after a hardship period. They may even take the view that if you can make a repayment, you may not qualify for hardship…
New loan application, current applications…
Most lenders are quickly updating credit policies to accommodate risk associated with COVID19 and request additional information and explanation around job type/industry to identify is this may impact ability to repay in the near future. Some lenders are asking applicants to provide disclosures and confirmstaions along the following lines:
The COVID-19 crisis is causing significant social and economic disruption. Applicant(s) to advise how they foresee this affecting their current financial position (including income) and how they will financially navigate that affect. This approval is subject to the Lender understanding and acceptance of this affect.
To Summarise:
Impact on Credit History
Borrowers who are granted a six-month deferral on loan repayments will not have their credit rating affected as a result of the holiday, so long as they were up to date with repayments prior to the economic impact of COVID-19.
“If a customer is granted a deferral on their mortgage and other credit products because of COVID-19, banks will report customers as not having missed a repayment, provided they were all up to date when granted relief,” explained ABA CEO Anna Bligh.
As always should you have any questions we are here to help – while we may be working remotely during this time please call the office on 1300 706 540 and one of our team will be able to help you.
Take care out there!
James Hardiman I General Manager
AXTON Finance
Photo by Branimir Balogović on Unsplash
Firstly our small team at AXTON Finance hope that you, your friends and your family are looking after yourselves during this time. Please listen to government advice on how you can play your part to keep yourself and others safe during this pandemic.
Australian banks and lenders pitch in
On Friday 20th March The Australian Banking Association (The ABA) announced a unified response to assist Australians during this crises.
Below is a summary of COVID19 links available from each lender in the Australian market place.
This page is being updated as more information comes to hand.
Key points to consider – our brief summary
– The term ‘repayment holiday’ SHOULD NOT be interpreted as interest being waived. It is only repayments (interest) being deferred. You still have to pay the capitalised interest added to the loan balance in the future.
– Qualification requirements are likely to apply (eg unemployment, significantly reduced hours, at risk industry etc)
– Our opinion is that the deferred repayment should be used where genuine hardship is being experienced or is expected. In the long term adding (capitalising) interest for six months or more can add a significant amount of interest to your total loan cost.
– Most lenders are offering up to six months relief in repayments. Some are offering up to three months with a checkin at that point for a further three months.
– Credit reporting agencies and lenders have already outlined that the hardship arrangements are typically not reported as defaults, and therefore do not impact a borrower’s credit score, with APRA also stating on Monday 23rd March 2020 that banks need not treat repayment holidays as arrears.
– The very cheap fixed options we are starting to see should be considered carefully. Often you cannot make extra repayment on a fixed rate, there is often no redraw and expensive break costs can also apply should you pay the loan out early.
– It may be economical to consider refinancing to a new lender to take advantage of cheaper rates, a new interest only term or one of the current cash back rebates available before you simply defer your repayments.
Speak to your AXTON broker if you would like a mortgage review (click here for a free review) or to discuss any of the points above.
Bank Of Melbourne (click link on main page to COVID Information)
If in doubt or if you just want to chat about your situation please contact your mortgage broker to assist where possible.
Contact details are as follows:
Our office number (1300 706 540) is still actively being monitored as we run a full VOIP system and can be contacted as per normal.
Many thanks
Your team @ AXTON Finance
Photo by Branimir Balogović on Unsplash
As you have probably heard in the media the nations lenders have clamped down on their lending criteria as a result of pressure from various government agencies like APRA and ASIC and from recommendations made during the Banking Royal Commission into banking misconduct.
It would be fair to say that many lenders have perhaps taken this a little too far which has resulted in a market place full of inconsistent applications of an incomprehensible set of rules for borrowers to deal with.
As a result of this we felt that the following information can be used as bit of a guide to help maximise your chances of securing finance approval by implementing any number of the following tips.
Lenders will often apply a score to your loan application based on the information you supply and if you skip on optional questions this can be detrimental to the strength of your application if things a little tight. For example even if you have a savings account with another bank with a small amount in – tell your proposed lender. If you have a middle name don’t forget to include it – it matters. If you have moved a couple of times try and be accurate with your living history as lenders often marry up data they can see on your credit file with the information supplied in your application.
If you are looking to refinance or buy your next property check out client fact find here – this is a fantastic form which is responsive to asking you the questions we know a lender will want to know – nothing more and nothing less! We can contact you after you have completed to run some tailored options past you.
Lenders get very concerned when they see on your credit file that you have applied to a number of credit providers within a short period of time for about the same amount of money. The lender in question will often take the pessimistic view and think that there is something wrong with your application and has been declined by other lenders prior to it so will pick over your file with more detail trying to find out why you would apply so many times.
This might sound scary and a reason for a lender to decline a loan but many lenders have different policies that may consider your scenario depending on the circumstances and what you have done to remedy the situation. As a general rule of thumb defaults from utility providers like power and telecommunication companies have less impact on your scenario than do defaults on financial service providers like personal loans, credit cards and home loans.
It is important to realise that with the evolution of the positive credit reporting regime lenders can now increasingly see the conduct of other institutions credit facilities. So if you are late on your credit card payment with the CBA and your home loan application is with Macquarie Bank, then there is a good chance that they can see this on your credit file down to which months you were on time and those that were not!
Treat your repayment history with a healthy level of respect and you will find your application will run pretty smoothly. A good mortgage broker or banker will be able to work with you prior to submission to identify any sort of severity and work out the best course of action and the lenders most suited the scenario you have presented.
If in doubt you can get a free copy of your credit file from mycreditfile.com.au (a service from Equifax Pty Ltd). We can take a look at it for you free of charge and provide you with some insight – feel free to contact us here.
The advent of the ‘buy now and pay later with no interest’ companies like Afterpay and Zip Pay creates an interesting situation for lenders. In simple terms these are not seen as a great look on your bank statements because the lender makes the assumption that these often relatively low cost purchases were made because you did not have the money in the first place and with retailers quick to jump on the band wagon with this offering its even available on products and services that may be considered essential. Our recommendation is generally not to have these buy now pay later arrangements if you are seeking to make a mortgage or finance application.
You will of course have to supply items like payslips, ID, mortgage statements and tax returns etc depending on your situation. This often slows down the process when the information requested is not provided in a timely manner. Many lenders simply get to your file and if information is missing they request whats needed and place your file at the back of the queue again. Sometimes information supplied can result in additional questions being asked so be prepared for this to happen and its nothing unusual albeit it can be frustrating.
OK I get it that a budget is boring but again an increased focus is being made on just how much borrowers are spending on living expense and there is a general reduction on the reliance of HEM (Household Expenditure Measures) standards and a more tailored approach. Having a summary ready before your finance meeting will help you have a more productive and realistic expectation of your borrowing capacity for any sort of approval. There are often many ways that you can reduce and improve your living expense without making drastic changes in the months lading up to when you are looking at securing a mortgage. Go through your statements and look at where you may save money via;
Lenders are now required to ask about any expected changes to your future income that may affect your ability to meet repayments. This of course is a requirement to be answered truthfully and is strengthened by your ability to provide other information about how you may deal with such a situation. For example if you are about to go on maternity or paternity leave you could state that you have a certain amount of funds available for the estimated period of you being on reduced income to meet the commitments of your loan. A return to work letter and using a lender with a strong appetite for this sort of scenario will also help you a lot.
Of course we may be a little biased here but having an experience broker working with you will help explain things in plain English for you and be across the lending policies of dozens of lenders and not just one (like you would get directly at a bank).
The quality of your application submission that is made by your broker or banker can really dictate how smoothly your application goes. Do some simple research like looking up your preferred broker or banker online through Google, LinkedIn and the other usual social media links. Usually you will get a pretty quick impression as to how experienced and professional they are. If in doubt trust your instincts!
It is often that the more competitive products and policies lie outside the big four banks. Well over 50% of all mortgage lending goes to just four of the major banks. At AXTON finance, only 20% of our lending in the last six months has gone to a majors! There are better deals to be had if you are willing to look outside of the square it can save you tens of thousands over the life of your loan.
A business mentor once told me of the following three things;
Good, fast and cheap…. pick two. It is impossible to have all three.
Wise words to live by indeed.
A quick search of the internet may list some amazing rates that look too good to be true and while it is still may be worthwhile considering you should also think about;
So there you have it – ten tips on helping get your mortgage application approved!
Please feel free to contact us on 1300 706 540 and ask for Clint or one of the team to help you out. We a sure you will love speaking to an experienced person and not a call centre!
Best regards,
Clint Waters
0422 464 353
AXTON Finance
With auction clearance rates slipping below 50% in some markets right now, vendors are much more open to a pre-auction offer. You’ll also find more vendors choosing a private sale over an auction because it allows them to hold out for their price and save on auction costs.
That means, if you’re ready to buy a property in the spring market, you’ll also want to be prepared to drive a hard bargain. Here are some tips on how to make a successful pre-auction offer and negotiate your price like a pro.
If you haven’t already done so, ask us to organise pre-approval on your home or investment loan before you put in an offer. That way, you’ll be confident of your finances and have a clear understanding of your upper spending limit. Having pre-approval in place gives you an edge over the competition because the vendor knows the deal will go smoothly.
Research is always the key to paying the right price for a property. Whether you’re buying at an auction or negotiating directly with the vendor, it pays to know the property’s correct market value before you go in guns blazing.
Research will allow you to make an offer that’s too good for the vendor to pass up, without overpaying. It pays to be realistic – you’ll have a better chance of beating the competition.
Knowledge is power. Ask the real estate agent why the vendor is selling and use the information to your advantage. For example, if they have already put down their deposit on their next property, the vendor may have time constraints that you could exploit by offering a faster settlement. If they are in a divorce situation, you could provide a more substantial deposit so that both parties will have more money for their next property deposit, which could help the vendor choose your offer over someone else’s.
When it comes to liaising with the vendor’s real estate agent, be mindful about giving away too much information. Never tell them your budget in advance, as they could use the information against you. Always indicate that you’re interested in several properties and have other options – if they think you’re too keen on the property they’re selling, then they’ll be less flexible during negotiations.
Timing is crucial when you do make an offer. Some experts suggest that you go in hard and early, well before the auction – as vendors may be more inclined to accept your offer because of the convenience factor, which may also be a good tactic in a softening market.
Others recommend waiting until right before the deadline to make the offer, to eliminate the possibility that the real estate agent will shop your offer around to other prospective buyers.
Another tactic is to stipulate a time limit – for example, tell them it’s only on the table for 48 hours. Whatever your strategy, be prepared to stay firm on your offer – don’t be too quick to budge from your original offer price as it could make you look comfortable.
It’s important not to be distracted by your emotions during negotiations. If the price is being pushed up, you may have to walk away if it goes beyond the correct market value you have researched. A common mistake is to be manipulated into paying more than a property is worth because you love the property or don’t want to be the loser in the negotiation process.
Making a winning pre-auction offer comes down to being informed and employing some strategic negotiation tactics. I can help you prepare by organising a pre-approval on your home loan.
If it is just getting all too hard you might like to consider some professional help.
Utilising the services that buyers advocates offer is becoming more popular across Australia, as buyers recognize the benefits having their own advocate brings to the entire purchasing process.
Buyer’s agents are professionals who specialize in searching, locating, evaluating and negotiating the purchase of property on behalf of buyers. They do not sell real estate. They are engaged independently and paid for by the buyer to act on their behalf. The key difference between a selling agent and buyer’s agent is who they represent as, by law, an agent cannot act for and accept a commission from both parties in the same transaction.
Buyer’s agents offer a number of different service options, ranging from complete searches through to auction bidding and single property reports. Their aim is to ensure that the purchaser is as fully informed as possible and doesn’t overpay for the property. Having an experienced advocate on side who is familiar with suburb values and the purchasing process also assists in maintaining objectivity when it comes to negotiating the best possible outcome.
Give us a call to find out more or for an introduction to one of our preferred buyers advocates.
This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed before acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice about your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.
We are really pleased to share on our blog this great video documentary produced by Realestate.com.au in conjunction wtih CUA about the buying journey of two long term Axton Finance clients, Steve and Cas, who successfully sold their smaller home and replaced it with a larger family home in Surrey Hills.
It was a pleasure to say that we were involved in both their first purchase in 2011 and then this one at the end of last year.
While bidding at auction on the day is the culmination of weeks and often months or years of hard work and research it underpins the importance about being ready. It is of course critically important to secure the right advice about your mortgage and finance options so that you can move forward with absolute confidence.
We loved Cas’s bidding style – well done guys!
Check it our here
https://www.realestate.com.au/…
How Does Refinancing Your Home Loan Save You Money?
When Australian academics researched the difference between renting for life and investing your hard-earned income into property ownership, the results were clear. Taking the leap into buying your own property gives you a better return in all Australia’s capital cities. The University of Melbourne economists came to their conclusion after studying data from 1983 – 2015 and compared buying a house with renting and investing in a combination of term deposits and shares.
But as house prices increase around the country, shopping around for the best possible home loan deal with a low interest rate is more important than ever.
If you’re already lucky enough to be a property owner, refinancing your existing loan in order to get access to a better deal could be a smart move for your mortgage.
Choosing A Home Loan For Refinancing
The days of signing up for a mortgage with a 30-year repayment term are gone as banks and other lenders scramble to offer great deals that help them win customers. But as today’s workforce habits continue to evolve, flexibility is an important thing for borrowers to enjoy, and it’s important to remember that the best mortgage for you might be about more than just a low interest rate. To help you benefit from refinancing your existing home loan, take a closer look at extras on offer, and weigh up the benefits those extras may offer, in combination with the all-important interest rate.
The three main types of home loans include:
Basic loans: these no-frills frills loans typically have limited added features and a low interest rate. Although many now offer redraw facilities, there can be restrictions and fees, so if you want to make extra repayments at some point in the life of your loan this may not be the best deal for you.
Standard loans: you’ll enjoy greater flexibility that may include the ability to redraw money you have paid in, or the option to switch to a fixed rate, or perhaps split your home loan into both a fixed rate and variable rate home loan. You can also enjoy a 100% offset account but it’s important to shop around to find a loan with a cheaper interest rate and similar features.
Home loan package: this can include a standard loan with an interest rate discount that, depending on your loan amount, might be cheaper than many basic loans. The package can include a free transaction account and a credit card with no annual fee. But be warned of other hidden costs, including high package fees that can add up over the life of your mortgage.
Variable or fixed?
In these times of hefty house prices, low fixed rates can sound tempting.
Keep an eye out for reduced flexibility, including restrictions that may prevent you from making extra payments – something that can see your total interest soar over the life of your mortgage.
With rates always fluctuating, it’s difficult to predict if choosing a fixed rate over the next three or five years will save you money in the long-term. By asking yourself if you can afford a higher interest rate, you can make a well-informed decision about whether fixing the rate for at least part of your loan might be a good option.
A split loan can offer the best of both worlds and it’s something you’ll understand better by talking to an experienced mortgage broker.
Don’t Forget The Loan Fees
To help you choose the best refinancing deal for your mortgage, remember that interest rates are just one of the costs to think about. Always check the ongoing fees and charges that add up over the life of your home loan.
Asking for a better deal might just be the best thing you can do for your mortgage but it’s best to go into any refinancing deal with your eyes wide open.
Some common fees include:
Application fees
Valuation fees and lender’s legal fees
Lender’s mortgage insurance (LMI)
Monthly or annual fees
Break costs
Favourite Home Loan Features
Depending on your personal circumstances, there might be some home loan features you’ll love. These include:
To help cut through the confusion and find the best deal to refinance your mortgage, talk to our team today or just call us on 1300 706 540 to discuss your scenario.
Axton Finance is pleased to announce that we have been awarded Mercury Hero in the 2017 Connective Excellence Awards, in the face of some very stiff competition.
This award recognises our innovative use of their Mercury technology platform that drives fast home loan approvals and better client experiences.
Connective Excellence Award Winners are chosen for their expertise, integrity and outstanding customer service standards. Axton Finance is very proud to accept this award and be recognised amongst the best of the best in Australia’s mortgage and finance broking industry.
Connective is one of Australia’s leading mortgage aggregators. Collectively, Connective brokers write one in every 10 Australian home loans.
We will contact you within 10 minutes or sooner during business hours for a quick high level discussion.
