I’ve been sitting at home, full of the flu, wondering where my blogging may lead me next…what seems obvious to my lateral thinking brain is Loan Health Checks. Let me explain.

For the vast majority of people, your home is your biggest and costliest asset. This Home Loan debt, in one form or another, covers a significant part of your lifetime. Let me put it another way. You’d get your car serviced at least yearly, maybe your air conditioning or pool if you have them, yet I’d estimate probably 80-90% of people would never entertain getting their home loan reviewed on a regular basis.

It may just be for the simple reassurance of knowing you’re still on the right track or more significantly to ensure you’re not paying more fees or interest than you could be. As you’d gather from my other blogs, or if you know me in general, I’m very big on making informed decisions. You don’t need to know all the information, just be willing to ask those who can help. Maybe it’s a fear of looking silly, I don’t know really, but to me anyway, if you find out you’ve been paying thousands more in interest than you could have, you may feel a bit uncomfortable.

There is so much in the way of news and publicity these days about people struggling financially. Surely, this should mean maybe getting an annual check-up on your home loan should be rather important?

I’m a Mortgage Broker, this is what I do. The goal is to always get you into the most suitable loan, but loans, products, interest rates and banks change. There is no cost to have a chat with me, we can sit down over a cup and just make sure everything is where it should be. A once a year conversation to keep you up to date should be a priority, even as I said before, just to be reassured you’re still on the right path.

Peace of mind is a big thing and shouldn’t be ignored.

Just my humble opinion, of course.

Personally, I’m not the biggest fan of all the scaremongering Personal Insurance adverts at the moment. They seem to drench the television, preying on the perceived negative sentiment in the market.

That said, I do think it is very important that a borrower at least consider the implications of their debt level on their spouse, family, etc. should something happen. As a Mortgage Broker, I believe it is my responsibility to recommend that you talk to a Financial Planner though, it can be a very important and informative conversation. Maybe just exchanging emails or a chat over a cuppa could be very helpful for you.

Do you need income, trauma or life insurance?

Do you have wills?

Is this an opportunity to sort your superannuation out?

Plus many, many other things…

There are many considerations really, many you or I would not necessarily even think about, but I prefer to consider them in a positive light, not the negative spin that hits us day in and day out on the television.

Buying a property is a huge undertaking, for those buying their first property it is probably the biggest single purchase they’ll ever make compared to their previous purchases.

All I’m saying, as with using me as your Mortgage Broker, is to make an informed decision. You’re not obligated to do any of the things listed above but at least if you get the information, you can confidently draw a line in the sand knowing you’ve considered all options. This just allows you to proceed forward without any anxiety and doubt which I’m sure we all want, really. Peace of mind is a great thing to have in any aspect of life.

I probably sound like a stuck record really, but to me, knowing you’ve made a decision you’re comfortable with, an informed decision, is absolutely paramount. Selfishly I want my clients to be with me for years to come, I want you to be totally comfortable with your decisions and sufficiently satisfied with my work, to return to me in the future and hopefully recommend your friends too.

You may or may not agree with my thoughts but at least you know them.

I can always improve the way I do things too so don’t be afraid to speak up if you disagree.

There are some promising signs lately for the market moving forward for me as a Mortgage Broker and for you as a Borrower.

Firstly it seems that Fixed Interest Rates are falling across the board. Personally I’ve always considered these as forward forecaster for where variable rates will go. If fixed rates are going up, variable will generally follow a few weeks/months later and vice versa when they start to fall.

To me this has to be good for the economy. I’m no Economist by any stretch of the imagination, but lower rates you would think can only help.

The next positive I’ve seen this week is that we now have a lender doing 97% loans with only 3% genuine savings, plus they will also then add on the Lenders Mortgage Insurance. This is another positive sign. It’s not for everyone and there are pretty strict guidelines for it but it’s another step in the right direction. All other lenders out there are only doing 90-95% loans which obviously mean bigger deposits. The lesser deposit requirements at least mean a few more people have a chance of getting into their first home instead of paying the ever-increasing rents out there.

Obviously these are just my thoughts and opinions, but as a Mortgage Broker it does excite me to see some positive moves instead of all the negativity from the banks over the last 2 or so years. Business is picking up week-by-week which is a great indicator and it is nice to see First Home Buyers returning to the market also.

Onward and upward!

Financial responsibility, now there’s a term to send people running. I’m sure there are better ways to say it but hopefully if you stick with me you’ll see my point. You may not agree with me, and that is perfectly fine. This is just my thoughts and opinions.

The following examples are very general and I know many people who do not fit into these boxes, but I feel it needs saying anyway.

I seem to see a lot of people, younger than myself, with vast amounts of personal debt before even considering buying a house, then complaining that houses are unaffordable. It has to be said, the statistics prove it, the ratio between mortgage repayments and people’s incomes has stayed almost the same for the last 50-100 years. It may not seem so to you, the reader, but I hope to explain why.

If you go back even just one generation, normally the only debt everyone had was their home loan/mortgage. Everything else got saved for and paid for. The bit that skews things these days is all the extra debt, mobile phone plans, internet costs, pay television, car loans, boat loans, bike loans, credit cards, never mind the good old ‘interest free’ offers.

Now I’m as guilty as everyone else here, I have some of this type of debt also but… I understand the pressures it places on incomes and people, where as many people do not.

I’m certainly not saying that you don’t have these debts, just understand how these affect your disposable income. A $650 per month car loan could reduce a Mortgage/Home Loan you can have by $100,000… Now factor in some of the other facilities and you can start to see what a big impact they can make. Think about also how they impact your ability to save a deposit. Add them all up together and the costs can be scary.

As with every blog I write, I just want you to make an informed decision and understand why it’s harder to buy a house now.Property is still affordable to many but it may mean a change in some of your priorities to achieve it.

You don’t have to agree with me, it doesn’t seem fair; it’s just what it is.

It seems more and more people are looking at a Seachange, Treechange or just something a bit more rural these days as a retirement option or even a day to day living option.

The rise of more and more fly in/fly out work plus the ever expanding work from home options are really making this dreams realities. Once upon a time it really was a dream to live away from suburbia with the peace and solitude of a more remote location. It now seems on an almost weekly basis I’m having these conversations with clients and progressively helping them finance these dreams.

As with anything, some sense of reality still needs to be part of the decision… how will it effect you socially, where will the kids go to school, are you ‘really’ prepared to commute, plus many other considerations. Realistic acreage sizes and locations are also things to consider. How will you manage a property of real size and more importantly, will the bank lend you the money?

Who really needs a hundred or even a thousand acres really? That’s more a farm than a home, in my opinion anyway. If you want a farm, that’s fine, just be honest with yourself. Getting the right type of finance at the start makes a big difference.

Other things to consider are the real value of the properties. If it is a few acres and has possibly been income producing, whether by growing produce or merely grazing stock, this may be factored into the ‘value’ you could pay for the property. Lenders/banks will generally only take a real value of the land or house and land, not allowing for these other factors. Also they may not be willing to consider certain properties, if they can be seem to be for commercial use or they may require you to take a more expensive commercial or agribusiness loan instead of a good old home loan. Just things to consider, that’s all.

In the end, where you live is your decision, mortgage brokers just help facilitate the loan… However, I do want you to know what you have considered and present many options as possible and make a good, informed decision. Spending vast amounts of money on property is perfectly fine, but if you’re going to do it, do it right.