The 5 things you need to know about today’s Mortgage Market
There’s a lot of mortgage related content potentially bombarding you, whether it be in the media, online, in the news or what you hear in your social circles. It’s prudent to stay informed but sometimes difficult to cut through the noise. Here we have outlined our top picks for what you need to know when it comes to banks and finance.
Refinance Rebates are still a thing
The cost of refinancing is no longer an excuse for remaining in an unsuitable or expensive loan product. Whilst you can expect to pay at least a few hundred dollars in fees when moving lenders this charge can be mitigated when financing with a bank that offers a refinance rebate.
Eager to win new business, there are currently several lenders that are enticing customers with cash rebates starting from $2,000. This bonus easily mitigates the cost of moving. Over the past year alone, the Blackburne Mortgage Broking team has facilitated the payment of tens of thousands of dollars in cash rebates for clients eager to secure a great deal on their home loan. Will you be next?
Low Interest Rates
Historically low interest rates have been available for quite some time and are still prevalent across most mainstream lenders. But what has been astounding in the past few months is seeing a significant number of institutions offering rates under 2%. In fact, our lending panel currently consists of 18 lenders that are offering products with a rate that has a 1 in front of it. These loans are fixed products that are for owner occupied lending only but are being presented by well known institutions and not obscure online lenders.
If fixed rates are not your preference, there are still plenty of cost-effective variable options available that can potentially save you money. Sitting in the mid 2%’s, several lenders are committed to providing low interest loans. And don’t forget, you can have your loan part fixed and part variable to have the best of both worlds.
Best Interest Duty
Based on recommendations from the Royal Commission and coming into effect from the 1st of January 2021, the Best Interest Duty is a statutory obligation for mortgage brokers to act in the best interest of their clients and to prioritise their interests when providing credit assistance. That’s not to say that prior these guidelines coming into effect brokers were not acting in the best interests of their clients, it is just that now there is legal framework in place to clearly identify how brokers are required to conduct business.
As mortgage brokers are bound by the Best Interest Duty and obliged to act in your best interest, this is yet another compelling reason to engage the services of one. Being legally required to act in their clients’ best interest gives the applicant peace of mind that they are being served well, if indeed you needed further evidence that brokers are a sound avenue to secure a loan application.
As the demand for property is currently rather strong, prices have spiked in certain areas and for certain types of properties. The flow on effect has meant that bank valuations, which are partly based on comparative sales, are now often returning favorably. For mortgage holders who have been hindered from refinancing to a more competitive product due to lack of equity, this now means many customers have options that were once not there.
The Blackburne Mortgage Broking team have the capacity to order valuations upfront through many banks so if you are keen to know what your options are based on your equity position, now could be a great time to act.
Comprehensive Credit Reporting
Comprehensive Credit Reporting has now been rolled out and it’s a good thing. The initiative aims to assist credit providers in making better lending decisions by being able to identify those customers struggling with their current commitments. On the flip side they are also able to identify those applicants who display sound conduct and assess their applications accordingly, which is a positive thing.
Credit providers are able to see:
- When a credit account has been opened/closed or the start of an existing or past loan and when it was repaid
- The type of credit facility (i.e. mortgage, credit card, personal loan etc.) and the available limit
- The last two years repayment history.
This information assists credit providers in assessing the risk of a potential client but also helps determine if they display positive financial conduct. This potentially rewards customers for good credit history rather than just being penalised for an isolated missed payment that may have appeared on their credit record.
Much is happening in the finance world and its generally quite positive. No one knows how long rebates and low rates will last or even what the property market has in store, but we do know what is happening today. That is why it may be a great time to look at your options. Your Blackburne Mortgage Broking team are always on hand to guide you through what is in the market and help you make decisions that work for you.