Australian Mortgage and Loan Information

When the Board of Reserve Bank of Australia announce a rate cut, they are talking about a thing called the cash rate. The cash rate is the overnight money market interest rate. The overnight money market is where many home loan lenders source some of their money for home loan mortgage lending.

The recent cut of .75% in this rate should bring about further relief for home mortgage borrowers who have standard variable or market rate loans. This recent cut is the third in three months and now sees the cash rate at 5.25%. There is usually a gap of around 1.8 to 2.50% from the cash rate to the rate your lender may be charging you. This gap plus account keeping fees is your lenders profit. Historically home loan rates will take a week or so to come down. So check your next statement and remind your lender of the cut if they have not made the change.

When ever there is a change of interest rate, there is an opportunity for you lender to make a mistake with your mortgage interest figures. And unless you pick it up you could be adding years to your loan and be ripped off thousands of dollars. I implore you to get some mortgage checking software. Check all your statements including your credit cards.

The Australian Federal Government will pump a further $3.5 million dollars of federal funding into 41 local government and community organisations to make financial counselling available free of charge for individuals and families who have got them selves into a mess with their home loan mortgages.

Aside from last months ¼% rate drop, Australian Home Loan borrowers have endured 10 consecutive mortgage rate increases. Charitable institution Wesley Mission report that mental health has become a big issue for mortgage borrowers with many stressed borrowers now suffering clinical depression.

Many feel trapped, and isolated by their debt as their lenders seem ambivalent to their plight. The Banks and other lenders are very chummy when issuing the home loans, but turn quickly to savage dogs when you miss a payment or go over your limit.

It can help sort things out quickly when you get a different perspective on your financial situation. If currently, you cannot afford an accountant or financial planner use the service. If your debts have got out of hand, they maybe able to structure a plan for you and advise a debt consolidation strategy to help you get back on track.

On another note, never trust your lender. This current economic turmoil was caused by greedy bank executives trying to impress others and fatten their bank balances. The truth is lenders really do not care for their customers. We are just numbers to them. Your mortgage broker is where your loyalty should be invested. He or she has a vested interest in your welfare at the grass roots level, they generally do care about you. Use your mortgage broker more, make them your trusted advisor.

Did you know 54% of monthly bank statements contain errors! Never accept the repayments specified by your mortgage lender as being correct. In November 2005 the National Australia Bank admitted it had been overcharging 50,000 customers for about 13 years and that it was going to hand back $21.6 million dollars. In this instance the overcharging mistake largely affected business customers with fixed interest rate loans.

To check up on my lenders, I have been using the PC based Mortgage Watchdog mortgage checker software for four years now. The banks do not want you to use this software because of the refunds they have had to make to users. If you have an existing mortgage then it will pay you to buy this particular mortgage calculator instead of using the free bank calculators. Not only can you do “what if” scenario’s but you can check whether the bank has been ripping you off with your existing mortgage and get a refund.

The Reserve Bank is concerned the economy has slowed to a standstill and have flagged the possibility of a rate drop. So batten down the hatches, this could be the start of a wild ride for property owners and investors alike, as property prices come under pressure from higher unemployment and 5% inflation as the norm!

So how will this effect mortgage holders and prospective first home buyers?

Looking through the spin I think it means very little. Major lenders are enjoying improved profits and won’t want to give them up. Money will still be tight as lending policies have changed to reflect the popular media rhetoric about Australian’s needing a new age of responsible lending or we will explode.

For existing mortgage and home loan holders, my advice is to consolidate your loans. Move debt from credit cards to home loan, reduce your limit to $500 on your credit card, it will stop you over spending. Then pump as much as you can into your home loan. Plant some summer vegies and set yourself a four year plan to halve your loan. By the time the next Olympics’ comes around you could be sitting pretty.

For new owners, sit tight, find ways to save money, plant some summer vegies, see if you can’t halve your loan in four years. Do not buy a new car! Learn how to maintain your current one, keep your spending under control, pay off your credit card. If I sound like your father, it is because I am probably as old as him. Take a look at the historical interest rates for Australian home loans over the last 49 years, the best way to avoid being effected by this rollercoaster, is to not have a loan, so pay it off. Oh! and get some mortgage checking software, banks and other major lenders make mistakes all the time. Make sure you are not being ripped off.

Do you know the shocking truth about borrowing from a bank……

Over half of monthly bank statements contain errors!

Whether you deal with a mortgage broker, or one of the major lenders, have a standard variable home loan mortgage, fixed rate home loan mortgage, construction loan, line of credit home loan, debt consolidation home loan mortgage, credit card linked home loan mortgage, offset account linked homeloan mortgage, split home loan facility, reverse mortgage, homestart home loan mortgage, one year discount variable home loan, low doc home loan, no doc home loan, investment property mortgage, first homebuyers mortgage, first home buyers home loan and so on, you need to be diligent and on alert for loan statement errors. Check the historical rates over the last 40 years, you will see there are many opportunities for major lenders to make mistakes.

It has happened to me. My bank overcharged me, so………….

Never accept the repayments specified by your lender as being correct.

In November 2005 the National Australia Bank (NAB) admitted it had been overcharging 50,000 customers for about 13 years and that it was going to hand back $21.6 million dollars. In this instance the overcharging mistake largely affected business customers with fixed interest rate loans.

If you have a home loan with any lender including the major one’s like NAB, Westpac, CBA, St George, ANZ and Members Equity there is at least a 50% probability you may have been overcharged. Lenders do what they can to limit mistakes, but errors still occur.

I use Mortgage Watchdog, mortgage statement checking software to check my statements. It has served me well.

The banks do not want you to use this software because of the refunds they have had to make to users. If you have an existing mortgage then it will pay you to buy this particular mortgage calculator instead of using the free bank calculators. Not only can you do “what if” scenario’s but you can check whether the bank has been ripping you off with your existing mortgage and get a refund. More on the super Mortgage Calculator and Checker here…

The software has been seen on…
- A Current Affair
- Money
- 7:30 Report
- 4 Corners
- Today Tonight
and there are over 300,000 copies in use.

The Home Deluxe Bundle consists of the following programs:
1. The Home Loan Checker (checks the interest calculations on your home loan/mortgage, including line of credit loans)
2. The Investment Forecaster (shows the additional interest you may earn over a period of time at a certain rate of interest or at various rates of interest).
3. The Mistake Compounder (calculates what a bank error at some time in the past is actually worth now)
4. The Home Loan Forecaster (allows you to determine what your repayments would be at different interest rates, payment modes and loan amounts)
5. The Offset Account Checker (calculates the interest on your savings account that should be offset against your mortgage account)
6. The Effective Rate Converter (shows the “true rate” that your lender is charging

They are also offering the following incentives to purchase: (Quoted from the Mortgage Watchdog website)

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At $198, this is by far the most cost effective way to check on the banks and get all your money back from them; plus $259 worth of insider knowledge just for ordering before August 11, 2008 . Better still you can order the software totally risk free with a $250 Success Guarantee (see details of this amazing guarantee below). Just compare it with the alternatives….
Do nothing and you are likely to pay 7 times this amount in overcharges this year.
Pay a statement checking company to check just 6 months of statements for you and you will spend more than double the cost of the software.
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Find errors in your bank statements or
We’ll give you $250 for wasting your time.

Be your own mortgage coach, help your familiy members, but check your statements.