Record low cash rates lead banks to increase loan buffers

With cash rates at a record low 2.5% for the past 2 months, lenders and mainstream banks are pushing the panic button.

Banks in the country are pushing for an increase of interest rate buffers, an amount originally ranging from 1.25% to 2%, used as a key indicator whether the borrower has the capacity to pay within that buffer range due to market changes. This is an initiative pushed by the Reserved Bank of Australia, after cutting interest rates due to the record low cash rate. Banks are encouraged to maintain their lending standards, with the influx of borrowers due to the low interest rates as it is forecasted that these interest rates will eventually return to its normal levels.

It is a little known fact that when lenders service home loans they add a buffer on in case rates go up. Some lenders cap theirs when rates get too low. ING Direct, for example has stopped at 8%. It doesn’t matter how low rates go, you have to pass their serviceability calculator at 8% or they won’t give you a loan.

Read more about this on the Financial Review website.

Impact of Late Mortgage Payments

No matter how well you plan, or how hard you work, life can throw a curved ball at you, leaving you and your finances gasping for air. You may have lost your job, had a serious illness or accident, endured a relationship break-up: whatever the circumstances, you suddenly find yourself ‘in arrears’. ‘Mortgage in arrears’ means a missed, late or overdue payment. This is a very serious situation, and one that requires your immediate action.

Banks and mortgage lenders view home loan arrears very seriously. They are actually entitled to repossess your home and sell it to recover their money. Contrary to some horror stories, they don’t like doing this; they much prefer that you keep up with your payments so you, and they, can enjoy a stress-free life. There is a set process that they have to adhere to by law before they can re-possess your property.

Remember also that your record of missed payments will contribute to a ‘poor credit history’, which can follow you for a very long time, impacting your ability to obtain any type of credit, from home loans to credit cards, store cards, car loans or personal loans.

Don’t Hide: Take Action and Sort It Out

If you encounter a minor problem with your finances, you should contact your lender immediately. If you are confident you will be able to make a late payment, then get back on track with your repayment commitments, it’s likely the lender will be able to accommodate your needs and there are various methods that the lenders can use that can give you time to sort things out such as repayment holidays or re-amortizing the loan to reduce payments. Under the NCCP consumer credit code, the mainstream lenders are obliged to help you to a degree.

If, however, you have little chance of meeting your obligations for many months, you must act immediately. This will probably mean refinancing, possibly a complete financial overhaul. As painful as this may be, your future well-being does depend on it. The longer you postpone action, the more your debts will pile up, exacerbated by bank fees and legal fees.

While banks and other prime lenders will be unlikely to accept a borrower who has a history of payments in arrears, there are specialist Home loans for bad credit brokers and lenders you can turn to. A specialist broker will also consider your particular situation and advise you on the best course of action, including helping to select the most appropriate lender for you.

There’s no point in refinancing if you won’t be able to meet the new payment terms. In this case, you will be advised to sell your home as soon as possible to clear your debt. Any equity in your property may help you to start again when you are able to.

Expert Help Can Make a Difference

If, however, refinancing will enable you to establish a workable repayment plan, the chances are your home will be saved, and you can move on confidently. This might mean refinancing over a longer period, enabling you to make smaller repayments. It might also mean consolidating your borrowing, so you can pay off higher interest debts such as credit card debts, which can prevent you from meeting your home loan repayments. To find out more about refinancing a home loan in arrears, click here.

Above all, remember that you are not the first person to run into trouble and there are experts who can help. Take action immediately and you give yourself the best chance of a happy outcome.

Budgeting for a Better Life

It’s easy to have a family budget. Neat rows of figures in columns, nicely balanced, with money left over every month to contribute to a nest egg. On paper it all seems so logical. Then the bills, the emergencies and the temptations arrive and nothing feels remotely like the logical numbers on the page.

Keeping to a family budget can be like trying to stick to a diet, or battling to maintain an exercise program through winter. In theory it’s possible, but there comes a time, quite early in the piece, when the misery makes you feel it’s not worth the effort, when you feel that life is too short to endure all this privation. Well, the opposite is actually true: life is too short not to stick to your family budget.

The Best Hard Work You Can Do

No one is pretending that keeping to a budget is easy. But there are a few principles that can help keep you on track.

Remember that your budget is simply a balanced scorecard. On one side of the ledger is a single figure: the amount you earn. On the other side should Bad Credit Home Loans be a list of every necessary monthly or weekly expense. This must include an average amount for annual bills and an allocation for emergencies and unexpected necessities. Construct your budget so that a little is left over for your savings. Then stick with your plan.

Managing the Budget

You can develop a few key habits that will help you stick to your budget without making your life a misery.

The first rule is so obvious that many people overlook it. Keep away from shops unless you have a purpose. Don’t browse shopping sites on the Internet unless you’re searching for a specific product that you need. Always ask yourself if your budget can afford this. Saying ‘No’ to yourself may feel mean at first, but as you see your budget remaining ‘in the black’, the pleasure you feel will outweigh any disappointment in choosing not to spend money unnecessarily.

It can be very important to consolidate your debt. Only do this with a reputable organisation, as there are many pitfalls. Get advice from an expert, and heed his or her advice.

Become an Expert Shopper

Go shopping with a purpose. Make a list before you go and stick to it. Only buy what you have on your list, but do shop around until you find the best deal. This will give you a lot of satisfaction and you’ll be surprised how much you can save on the basics.

In the supermarket, check value for money carefully. Sometimes specials will mean that buying two half-litre bottles of a product might be cheaper than buying a one-litre bottle. Buy in bulk if it’s something you genuinely use, but don’t be seduced by a ‘bargain’ unless it’s really relevant to your life.

Shop for major items on sale. Try to wait for the sales to buy clothes and shoes. Don’t ‘fall in love’ with an item. You may feel you have to have it at the time, but later, when it’s no longer new, the main thing remaining will be the damage to your budget.

Start paying for everything you can with cash. A credit card always encourages you to spend more money than you intended because the expense doesn’t feel ‘real’. Later, as you become accustomed to the discipline of sticking to a budget, you will be able to allow yourself to use credit on occasion, but it’s always a wise idea to avoid it as much as possible. Part of your budget plan must be to pay off your credit card bill every month, so anything that goes on your credit card must be part of your monthly budget.

Track Yourself

Keep a record of everything you spend. This may seem pedantic, but it will prove a useful exercise. The very act of writing down your purchase will help you evaluate whether it’s something you really need and whether it fits your budget.

Your record will help you track your performance, and you can begin to challenge yourself. Sticking to a budget can be fun, and the rewards will be very satisfying. As you become better at budgeting, you may be able to allow yourself and your family an occasional treat from your savings. Even if it’s small, it will be all the more enjoyable because you have earned it. If you have a mortgage, sticking to your family budget can be a major factor in helping you to pay off your mortgage, and eventually becoming debt free.

To learn more about debt consolidation as part of developing and managing a family budget, click here: http://banksaidno.com.au/debt-consolidation/

Refinancing with Bad Credit

Sometimes home loans get a bit too difficult to handle and people fall into a trap of failing to meet payment obligations. Debts then pile up and become even more difficult to handle. Refinancing a home loan is a good way to make debt obligations easier to handle. However, home mortgage refinance is not that easy to get especially if you have bad credit history.

Refinancing home mortgage can make it easier to handle debts. You can take advantage of a better loan term, with lower interest, lower monthly dues, a shorter term or a longer term, whatever is more beneficial for you financially. Thousands of dollars could be saved with a refinancing strategy. When refinancing a home mortgage, you basically pay off your existing debts to create a new one. Refinancing is advantageous if you are getting better terms in the form of easy instalment terms or lower interests. There is also the option to combine two mortgages into one new loan to simplify the loan repayment process. This will certainly make life easier for you as you do not need to worry about separate loans.

Getting a refinancing agreement with lower interest rate will benefit you in terms of savings. Monthly savings may seem negligible if there is only a slight drop in interest rates, but if added up for the whole year or the duration of the loan term, you would be able to save thousands of dollars. Refinancing will also give you a chance to change the length of the new loan term. Choosing a longer term loan would give you smaller monthly dues. This should be favourable to people who would want to bring down the amount of monthly dues to make them easier to manage. It may also be good to choose for a shorter term as this could give you a lower interest rate. The best thing to do is analyse your ability to pay so you can take advantage of whatever option is available for you.

Refinancing is particularly easy if your credit rating good. But if you have bad credit, refinancing is not going to be easy. Banks and other traditional lending institutions tend to be strict when it comes to approving home loans and refinancing, so a record of bad credit, defaults, bankruptcy or judgments is reason enough for your refinancing application to be turned down.

If your credit history is not that good, it is best to go to a specialist mortgage broker to help you obtain refinancing for your home mortgage. We can match you up with a lender that would be willing to take up your mortgage to refinance. The trick is in finding the right specialist lender that will give you sound advice, honest and realistic solutions to your debt problems. That’s what we specialise in.

Securing Home Loans for the Self-Employed

Self-employment has its rewards. Self-employed contractor and freelancers get to decide on their own work hours, not being tied down by a company’s strict rules and guidelines. Too often too, self-employed individuals get higher pay than regular employees. But once you start looking to secure a home loan, then you begin to see the disadvantages of being self-employed. Traditional creditors are mandated to look at employment as a basis for loan approval.

Currently, it is very difficult and close to impossible to secure self employed home loans. Self-employed individuals are easily frowned upon by lending companies, regarded as not having a “stable” source of income. Lending companies have traditionally looked at self-employed people as a potential risk in terms of debt repayment. They require borrowers to be employed in a company for a minimum number of years before they can even be considered for loan approval.

Luckily for self-employed individuals, there now are specialist lenders that have turned away from the traditional manner of evaluating their capacity to pay debts. These companies will evaluate details of the income history of the self-employed individual, instead of immediately turning down the loan applicant simply because they do not have an “employed” status. Self employed home loan can be availed either through a Full Doc loan or a Lo Doc loan. In Full doc loans, the borrower furnishes proof of income such as tax returns of the two previous years. If you are able to provide proof of income to the lender, it would be much easier for you to secure a home loan. For self-employed borrowers who do not have tax returns for the previous years, the Lo Doc is the alternative.

Self-employed borrowers may choose to secure a home loan via a low doc loan system, where less documentation is required for loan approval. However, due to the recent economic crisis across the globe that had been caused by irresponsible handling of mortgages in core countries, tighter rules have been enforced in approving lo doc loans. The Federal Government has made new guidelines as to how lenders are to approve loans for self-employed individuals. Under the new rules, lenders should not fully trust the word of a self-employed borrower, but they should require some form of documentation to verify the pronouncements.

If you are self-employed and are looking to secure a home loan, the best thing to do is to get as much documentation as you can to prove your income generation. That way, you will have better chances of getting a loan. These documents may include bank statements, your Business Activity Statement (BAS) or other documentation showing you earn on a regular basis.

Benefits of Consolidating Debts

Financial obligations get too difficult to handle once they have piled up and you are trying to pay different loans from different lenders. One good way of simplifying your life and making your debt obligations easier to manage is through debt consolidation. Debt consolidation is a viable solution to decreasing higher interest rates imposed on some of your loans. This move is most favourable if you are carrying burdensome credit card debts accruing big interests.

Credit cards can impose higher interest rates and it becomes even more difficult if the credit card debts have remained unpaid for a long time. Consolidating debts is highly advisable for people struggling to pay off their credit cards. With debt consolidation, the borrower can put all the debts into one, preferably a home loan as this will offer the least interest rate. To avail of debt consolidation into a home loan, you will need to use your property as collateral. It would be best if you have good credit history because it will improve your chances of getting a better deal. However, debt consolidation can still be done even with bad credit.

For people seeking home loans for bad credit, debt consolidation can be one way of improving your reputation with the lender. Your chances of getting loan approval increases once the lender sees that the bad parts of your credit history have been diminished. You get a better chance with lenders as they see that you are trying to roll your debts into a more manageable loan. Aside from the lower interest rate that you can get once you do debt consolidation, there are additional reduction in debt that can be obtained if the debt consolidation includes defaults or judgements.

One thing that people should be careful about is getting into debt agreements that refer to Part 9 or Part 10 of the Bankruptcy Act. You should avoid getting into such an agreement because it is the same as declaring yourself bankrupt. Once that happens, the bankruptcy would be reflected in your credit history in the next 7 years and give you a hard time getting a new loan.

If you are struggling to pay off multiple loans, it may be time to consolidate these debts into a home loan. There are many benefits that can be gained, and this action will improve your chances of paying off your debts with a lower interest rate and better terms. Once you have consolidated your loans, you will only have to pay one loan every month at a lower repayment amount.

Dealing with Credit Impairment

In our system run by credit, it is easy to fall into a bad credit situation. There are various ways that people get labelled with bad credit, and once you get bad credit, it gets too difficult and almost impossible, at times, to get another loan. Also, when you have been fixing the bad credit situation and you think that you have already resolved the issues, it can still be difficult to get a loan approved. That is because the bad credit goes in your credit history, and it takes several years before it gets completely ignored by creditors.

It is important to take care of bad credit when it starts to happen so that it will not show up on your credit history. However, there are times when you get really stuck in a situation that prevents you to pay loans on time. For instance, you get sick for a period of time or lose your job. When you can, manage loan or mortgage arrears so they would not appear on your records. If you are trying to get refinancing, but still paying arrears, wait until you have at least 6 months of on-time payments before applying for a loan. Lenders look at your payments for the past 6 to 12 months before they consider your loan. The same is true for credit card or personal loan arrears. It is best to wait for the clean statements without missed or irregular payments on them.

In cases of defaults or judgements, getting a loan is not simple at all. They show up on your credit history for 5 to 7 years. If you have a very good excuse for the default, then you may still get a loan. In case of judgements, most lenders do take them seriously since they are court orders demanding you to pay for loans because you have breached the terms. You will most likely need a specialist lender in order to get a loan if there is a judgment seen in your credit history.

Getting under Bankruptcy Act Part 9 or 10 would also put a dent in your credit history. They go on your credit record for 7 years, such that even if you have fully paid your consolidated debts under Part 9 or 10, will still hurt your potential to get a loan approved. If you are in this situation, you will need a specialist lender to help you get a loan.

Any type of bad credit can give you a hard time looking for new loans or refinancing. But it should not be a big issue if you manage your arrears and unpaid debts well. In case you really need to get a loan again, there are specialist lenders that can help.

Bringing New Hope to Debt-Troubled People

Debt troubles can bring people down, but there is renewed hope for people that have been turned down by banks. Grand Capital Finance Group is simply the one to go for people having difficulty getting a loan approved. The company specialises in home loans for bad credit, helping individuals secure a home loan even as banks have turned them down for some reason.

Grand Capital’s business revolves around giving a second chance to individuals who do not meet the strict standards of lending banks. People would, for instance, be turned down by a bank if they have some sort of bad credit history that may include defaults, judgements, bankruptcies and the like. People who fall under this category will most likely have a hard time getting any type of loan.

The company also gives a second chance to people who are having difficulty getting a loan because they are self-employed. Banks tend to look for borrowers that have stable employment histories, so those who do not belong to a company will be disregarded. As banks are quite unpredictable when it comes to judging whether a person can afford to pay back a loan, it is always good to find a lender like Grand Capital that would deal with people needing help.

One satisfied client of Grand Capital expressed relief upon knowing that they would get help from the company. “You’ve managed to help us when no one else was interested,” said a certain C.S. of Mid North Coast NSW .

Getting a home loan with bad credit is possible with the help of Grand Capital. This is especially helpful if the borrower is seeking to consolidate multiple loans into one home loan. Grand Capital http://banksaidno.com.au/ simplifies the process for this and with the help of detailed and clear information from its website, the borrower gains information that is not misleading or too-good-to-be-true. “The whole process was conducted in a very professional manner and with a minimum of fuss, actually the whole process was painless. I would have no hesitation in recommending your services to anyone and will do so,” said J.D., another client from Mudgeeraba, Queensland.

Providing thorough information to the prospective borrower is essential to the trust that has been accorded the company by many clients. Its consultants are well equipped with the knowledge about the rules and regulations that govern the lending system in the country. The company also provides helpful advice as to how to improve the borrower’s credit rating.

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Solving Issues of Accumulated Loans

If you are grappling with many debts of differing interest rates, there is no need to despair. There is surely a good way for you to make the debts more manageable to pay. Financial troubles caused by the accumulation of loans and interests can be very stressful indeed. Debt consolidation is one good way for you to get control of your life again and get a grip on your financial situation.

Life gets very difficult when you have accumulated multiple loans for years that it becomes almost impossible to deal with them. If you have defaulted on credit card payments, you will most likely have trouble paying off compounded interests. If you are in this dire situation, you should consider completely getting rid of your debts one small step at a time. The mere fact that you are in that situation means that you are probably not capable of paying off all your debts in one lump sum. You will need a strategy, a good one that will make things easier and manageable for you. Debt consolidation would be a smart move to deal with such a problem.

You can consolidate all your loans into one home loan, which would give you the lowest interest rate. This would free you from the high interests that credit card companies charge. If you still do not have a bad record in your credit history, then you can get a very good deal in your debt consolidation plan. The only thing you would need to do is to use your property as collateral for the loan.

If ever you have bad credit, debt consolidation would help you improve your chances for refinancing. Debt consolidation can be good for people who need home loans for bad credit as this would signal to your lender that you are doing your best to keep your loans in check.

There is one thing that borrowers have to be careful about when looking for a debt consolidation deal, and that is getting into a debt agreement that refers to Part 9 or Part 10 of the Bankruptcy Act. Avoid getting into this type of debt agreement as this would be the same as declaring yourself bankrupt. Once that happens, your credit history will show you as bankrupt and you will have difficulty getting loans again for the next 7 years.

When in deep trouble with the lenders of multiple loans, consider the advantage you would get if you go into debt consolidation. It will give you a single loan, resulting in a single monthly payment that is more manageable than if you were struggling to pay off a lot of loans with higher interest rates.