Category: Finance

Laxmi Home Loans

To want extend you have to listen to your close friend or family members while finalising your property or home loan?

Has your friend recently bought a property and you are taking advice from him/her?  Thinking s/he know all? Common, your friend is having a feeling of getting 8 packs after walking out of Gym for the first day or the same feelings like a superhero after walking out of a theater watching spider man or recently released Salman Khan’s Sultan!

I highly recommend everyone to go and talk to your close once, while seeking or before finalising a property but please do not blindly or 100% trust them by understimulating some experts advice. I am not saying you’re close once will give you wrong advice either but the advise they are giving might not be suitable for you. In short, I have written few points below please go through them why you should not blindly trust them ( we will discuss in details while meeting ).

Please match:

a) Your income and their income

b) Your deposit amount and their deposit amount.

c) Your current job & location AND their.

d) Your number of family members and their

e) Your future plans and their

f)  Your expensive patterns and their

g) Your Liabilities and their

h) Your credit file condition and their.

If above all points are almost same then perhaps you can make a joint decision.

I am writing this from my personal experience. Recently 2 friends bought off the plan unit in Lidcombe. Sad thing is that one friend can easily settle(this is good) BUT  other has decided to put it back on the market for resell because he could not get finance because of 3-4 reasons, at last, they approached me but i also had to say, ” i wish i could do something for you but I am extremely sorry”. 

Note: if you have bought off the plan please start your loan preparation, at least 2 months ahead.

Disclaimer: This is just our thoughts and personal experiences, it might not be happened or suit every individual. Please take this as a general information and seek professional and proper advice.

By: Kishor Acharya
Laxmi Home Loans

Good to know : What determines your bank & home loan interest rates? #LaxmiHomeLoans you have any question with your interest rate please go through following points and let us know if you have any proof that you have been charged more (our existing clients), we will discuss with the bank. Sometimes we just look interest rates by ignoring all other important associated factors which actually determines our interest rates.

There are many factors to consider but following four points are the main key factors which determine interest rates.

1. What is his/her deposit amount and Loan amount?

Ans: Deposit plays very important role in getting a better interest rate as well as Loan amount.
a) If you and your friend are getting a property with your 15% deposit and your friend with 20% for $600k worth of property value. Your friend will have a lower interest rate, it could be by 0.10% or bit more. Why? because you are in Lender mortgage criteria and it takes more work to finalise loan & few more other factors.

b) If you and your friend are depositing 20% of property value but your property value is $600k and your friend’s property value is $800k. At this time also there is likely chance of your friend getting lower interest rate.

2. What is his/her employment status ( FT/PT/Casual/contract ) 
& Length of work?
Ans: Lets for an example, if you have to give a loan to your friend who does not have a proper job or constantly changes jobs, does not have saving habits, lots of credit card and another loan, sometimes plays poker and drinks as well. Would you lend him/her $5,000 if your friend says he/she wants to invest? 100% NO because there is likely chance of losing money. In the same way, bank assesses files and make a decision.
Length of work in one place really matters!

There are other factors as well, we will discuss in future.

3. When was loan take, type of loan & Date of settlement?

Ans: Let’s take an example: You went to 5 different TV stores and finally decided to buy a TV from Bing Lee, TV seller. You paid $1,000 which is the best price in the market as on today’s date. But after 1 month JB-HI -FI decided to sell the same TV in $750. What would you do or what can you do? Even Bing Lee started to sell in $750, we can not do absolutely anything.

It is exactly the same on Home Loan interest rate. Take the best Home Loan and an interest rate on today’s date. Example: For first home buyers NAB is offering 2 years fixed rate on 3.69% but after 2 months if SUNCORP offers 3.5% interest rate, can you change or go? The answer will be exactly like above. Yes, you can but it will be more expensive.

4. Credit History & liabilities, expense & savings.

Ans: Bank wants to know about your saving and expense payment patterns that is why they ask for 3 months of Credit card and Bank statements. If you are paying a late fee on your $10k credit card then a bank will think if he/she does not even manage $10k credit card properly then how can will they manage $500k loan? so which puts them at risk and they might not negotiate on the interest rate.

Note: In short, It is NOT only important to have lower interest rate. What matters is, how much you can save at the end of the year. For example, if you are paying 4.10% interest rate and your friend is paying 3.99%, for me what matters is if you can save $200 -$1000 a year by paying even higher rate or not. Sometimes higher interest rates come with good features.

Plus: Inflation also plays a vital role too. Faster the inflation could bring rate cuts & Slow inflation could hike the interest rate.


Reserve Bank of Australia ( RBA ) Rate Announcement – November 2017

The cash rate stands still at 1.50% in November.

The Reserve Bank of Australia (RBA), which has kept its benchmark cash rate unchanged at a record-low 1.5 percent for the past year has announced this morning that it will leave the rate on hold for yet another month. Governor Philip Lowe had this to say in his official statement: “Growth in housing debt has been outpacing the slow growth in household income for some time.

To address the medium-term risks associated with high and rising household indebtedness, APRA has introduced a number of supervisory measures. Credit standards have been tightened in a way that has reduced the risk profile of borrowers. Housing market conditions have eased further in Sydney. In most cities, housing prices have shown little change over recent months, although they are still increasing in Melbourne.

In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities.” “The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”

What does this mean for you? As the months go on and the cash rate stands still at 1.50%, there have been a number of lenders including four of Australian’s biggest lenders who’ve changed their interest rates at their own discretion. Make sure you keep an eye on any rate movement and consider whether your current loan is still right for you.