Confused about home loan pre-approvals? Here's everything you need to know before you start house hunting.
What information do you need?
First, your broker will want to build a comprehensive picture of your finances. To do this, you'll need to provide evidence of everything including:
When a potential investor or buyer hears the term “mortgagee sale” or “repossession” you can often see the dollar signs in their eyes. There is a common view that mortgagee sales come with a lower than market value price. This can be correct in some cases, however thorough due diligence should be conducted before purchasing this type of property. Below we will look into the usual process in WA for mortgagee sales, as well as the pros and cons of purchasing a mortgagee in possession property.
How do mortgagee sales work?
Favourable interest rates are a borrower's best friend, but should you lock in a low rate or go with a variable rate? Here are five things to consider.
1. How low can rates go?
Interest rates are at historically low levels and the current outlook suggests there may be further cuts in the medium-term future. If you lock in your rate now, you won't reap the benefits of later decreases. The question is: how low do you think the rate will go before it starts to climb back up? Timing is crucial if you want to lock it down at its lowest point.
2. Balancing the budget
How are your budgeting skills? If you want to know your precise repayment obligations for the next one, three or five years, then a fixed rate term can give that to you. Be aware, however, that you may not secure the best rate. Consider this route if certainty is important to you.
3. Fixed or flexible?
Fixing a rate denies you some flexibility. Once you fix a rate, some lenders won't let you make extra repayments to reduce your principal. If you come into extra money, such as a work bonus or an inheritance, you lose the opportunity to make what could be a sizeable dent in your mortgage.
4. Selling points
A fixed rate may put you at a disadvantage if you're looking to sell your property in the foreseeable future. Lenders may charge a break fee if you make changes to your loan or pay it off early, which often happens when borrowers sell.
5. Fixed vs variable: It's about 50/50
According to a study conducted by Canstar, a website that compares loans, the advantage of a variable versus fixed rate is fairly small over time.
Canstar compared an average three-year fixed-rate loan with variable rates over two decades. People who fixed their loan did better for 112 months, while those who chose variable were ahead for 123 months. "That's pretty close to a 50/50 bet," remarked Mitchell Watson, research manager for Canstar.
Seeing interest rates decrease understandably prompts borrowers to think about fixing their mortgage to a low rate. If you're weighing up the options, consider the benefits and drawbacks of locking in a low rate versus the flexibility of a variable loan according to your personal circumstances.
AICWA recently advised members of the decision by The Registrar of Titles Ms Jean Villani to introduce a change of lodgement processes by August 1st 2017.
On August 1st this year, Landgate introduced changes to lodgement process affecting mortgagees, specifically, for the electronic lodgement of mortgages and discharges of mortgages (via PEXA).
It is now envisaged that the next step towards paperless conveyancing is for the scope of eligible document types to be broadened so as to include:
Landgate is seeking comments and feedback from the AICWA on the proposed change. While the finer details of the process have yet to be determined Landgate have indicated that they wish to understand what potential issues or considerations exist in implementing this “next step”. An investigation followed by a lengthy consultation period will hopeful ensure the creation of processes that are accepted by the majority of AICWA members. It is important to note that there are many external impacts that will result from this change that impact conveyancers. Landgate are keen to understand these impacts and where possible work with AICWA to achieve or facilitate positive outcomes.
Landgate (WA Land Title OFfice) force PEXA use; Electronic lodgement of stand-alone Mortgages and Discharges of Mortgages will be effective 1 August 2016
On 4 April 2016 a letter was distributed to industry bodies and Customer Information Bulletin (CIB) recipients. This letter notified Landgate’s intention to introduce changes to the lodgement process for mortgages and discharges of mortgages that will affect mortgagees, their conveyancers, lawyers and lodging agents by 1 August 2016.
Industry bodies and CIB subscribers were invited to provide feedback on the changes. The timeframe for receiving feedback has now ended. This CIB is to notify that Landgate will be progressing activities to achieve the 1 August 2016 timeline.
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