Home Loan demands have reached a 4 year high, according to credit information provider Veda. Mortgage inquiries for 2013 have peaked at 15.3%. Inquiries for credit cards rose by 2.4% and personal loan inquiries at 1.4%.
In spite of interest in mortgage loans, those that availed increased only by 0.4% over that period. Angus Luffman, Veda’s Manager for Consumer Risk is convinced that the record low interest rates are not the deciding factor, as people are more cautious with the rise in unemployment. But despite all these, Veda remains optimistic that we will see these inquiries translate to more credit as soon as home affordability is addressed.
Read more about this on the Business Spectator website.
Lenders Mortgage Insurance is a required premium for home loans that are offered at a minimum of 80% of the property value. This protects lenders in case of a default. Does it have any benefit for borrowers?
LMI is a form of insurance that benefits the lender. You as a borrower do not get anything out of this. In case of foreclosure or a shortfall in the sale of a property, you are still liable. The LMI only covers for the losses of the lender, and you will have to pay the amount back to the insurer.
As a property investor, it is imperative that you understand that you are not exempted from liability. This is an insurance that lenders and not borrowers can claim. Although this benefits primarily the lender, the only advantage that you can get from this is the ability to secure a low deposit loan for your investments. Ensure that you have a strategic plan of action for your investments to avoid paying for the Lenders Mortgage Insurance.
Read more about this on the Smart Property Investment website.
Interest rates have been pegged at a record low 2.5% for the last several months, and experts are predicting this to increase. When that happens, are we prepared?
An increase of 1% would add $186 to your existing $300,000 mortgage, and this could greatly affect consumers spending power. It is wise to assume that the interest rates are not going to stay as it is, as this will encourage people to trim down on their expenses. It is also encouraged to check for other home loan options in case the interest rates shoot up. Planning while the interest rates are still low will help assist borrowers in making sure that mortgage is manageable. Give yourself peace of mind by having a contingency plan on hand.
Read more about this on the Cairns Post website.