Australian Mortgage and Loan Information

Why you need to know How To Fight Bank Errors.

Here is a typical scenario for a loyal Bank Mortgage Holder.

After depositing sufficient funds to a checking account to cover the monthly automatic mortgage payment with plenty of time to spare. You get a call from the bank asking for a payment to your mortgage. You reply that it is an auto debit from your checking account and that there was plenty in the account to cover their payment. They then accuse you of not paying on time and list a series of fees you are going to be slugged if you don’t pay up today. You are offended, but swallow hard and say you will fix it, but it is the banks problem not yours.

You contact the branch, they say your deposit was posted incorrectly and that they are sorry and will correct the problem immediatly with the mortgage area and that all fees and interest overcharge will be refunded. While not 100% happy, you let it go at this and trust the bank to do the right thing.

Big mistake! three days later you get a call from the bank’s mortgage collection department demanding payment immediately. You explain that you contacted the branch and that they said they would fix it. The mortgage department continue to demand payment, they say they have heard it all before.

You contact your branch manager and explain nicely that you are being harassed! “Didn’t they take care of it”. She explains! No you say, they have been leaving harassing calls on my answering machine. The branch manager then says she will call the dispute department and get it taken care of and that she would ring you back. She rings you back and you even get a letter of apology from the branch. So you rightly think you have put the matter to bed.

Wrong! Sure they may have refunded some of the fees, but what about the penalty interest rate? Sometimes they charge a penalty rate on your entire loan for they period, not just the missed payment amount. This can be $100′s of dollars, depending on the size of your loan.

So how do you get this overcharge corrected. Work out by hand and calculator how much you have been overcharged? This will take a long time and will probably not be accepted by the bank.

My advice is to use a statement checking program that has some credibility with the Federal Trade Commission or the Banking Ombudsman. The evidence produced by such a program will be undeniable and force the bank to cooperate with you.

Most online statement checking software providers will also help you prepare your case.

Bank errors can occur at all stages of your home loan application and administration. Home Loan Bank Errors are costly.

A little bit of homework before you commit to a home loan can save you hundreds of dollars per month on your mortgage payments. Using free home loan calculators like the Commonwealth Banks home loan calculator will help you get a quick understanding of your required budget and provide some evidence in case a bank tries to overcharge.

Playing around with the figures will also let you know the result of future interest rate rises.

There are other free calculators available including personal loan and debt consolidation all worth a look.

Another calculator that can save you money is the Mortgage Watchdog home loan statement checker. You can download a free trial and check your statements for errors very easily.

Property Investment in Australia is still very much in vogue. There are small fortunes to be made in the suburbs of all major Australian cities and despite the roller-coaster ride many property investors have endured with interest rates, property is far and away Australia’s favorite investment asset. I came across this article regarding the value of land and think the content is of value to all prospective or current property investors.Very enlightening article about land value and property investment.

The article is quite lengthy, but worth reading to the end.

My mortgage broker and I both agree that your should consider property investment a business venture and as such approach it with a pragmatic business like manner. Consider the net result. The net result is where the numbers really need to stack up, taking into account negative gearing and investment property tax.

Also explore the benefits of an interest only investment home loan.

Continued capital appreciation is almost assured as the shortfall or gap between available housing and that needed continues to grow. This, coupled with the Rudd government leaving capital gains tax concessions alone more than balances the Reserve Bank interest rate rises. If you take a look at historical rates for the last 50 years, we are still in good shape as far as rates go. I do however think that rates need to remain steady to encourage property development.

The following article sums things up:

Mortgage Watchdog.

From NMDDATA.COM.AU

“Housing supply deficit widens

“The fact of that of the national under-supply, half of it is in Sydney, it’s going to take a long time to turn this around. We expect housing shortage to get worse over the next five years and it’s an underpinning factor for price growth, which is going to be pretty strong,” said Braddick.”

Maybe it is time to add to your property investment portfolio. Speak to your mortgage broker and find out your borrowing capacity.

Have we seen the last of the RBA interest rate rise’s for 2010? I hope so. Yes, homes are more expensive, but I now think wage’s will adjust.

Australian’s that I come in contact with seem to have overcome their addiction to retail therapy.

If you are working in retail, you may find you will be doing more hours and being asked by your boss to do some unusual promotion.

From the media releases › 2010 › Statement by Glenn Stevens, RBA Governor: Monetary Policy Decision:

“With the risk of serious economic contraction in Australia having passed some time ago, the Board has been adjusting the cash rate towards levels that would be consistent with interest rates to borrowers being close to the average experience over the past decade or more. The Board expects that, as a result of today’s decision, rates for most borrowers will be around average levels. This represents a significant adjustment from the very expansionary settings reached a year ago.

The Board will continue to assess prospects for demand and inflation, and set monetary policy as needed to achieve an average inflation rate of 2–3 per cent over time.”]

The message is mixed, but my gut feeling is the board think the economy is in a boom/bust wave. The RBA understands that “Mining” is not a sustainable industry. It produces very few real jobs and uses massive amounts of public sponsored infrastructure. When the ore runs out or a new product replaces the old “made from iron”, the mining executives will probably go back to banking and the workers on the dole. Property price’s will adjust and a new cycle will start.

As home buyer’s and a property investor’s we can only deal with our own micro economies. We have to talk to our mortgage brokers and bankers and get the best deal we can for our circumstances.

Oh! And please check your loan statements for errors. I recently got charged twice for a line fee on one of my loans. It took three weeks to get it refunded. Interest rate increases are a prime time for lenders to make errors.

Reputable Mortgage Broker.

Mortgage Watchdog Software.

Please watch the video, if you have not seen it, you will be shocked!!

I highly recommend this software. Go to the website and check it out for yourself and try it for free.

Free trial, no catches.

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Mortgage Watchdog.com.au

Thanks for coming to my blog.

The only way is up it seems.

Unless soaring house prices abate somewhat, expect more rate rises in the very near future.

Reading the recently published RBA board minutes, it seems the RBA has pinned part of the blame for soaring house prices on the state and local governments. The RBA thinks most state governments have lacked the desire to address the fundamental tightness of housing markets. They are not releasing land for development, and most don’t have a long term strategy for future release. More land needs to be released now, developers and investors need to be encouraged.

The very landscape of Australian society will change for the worse if we do not act now. You never know, we may soon have our own “shanty towns” and the edge of the major cities. Population growth among recent immigrants is fantastic and will not be curbed by assimilation to our “old growth” population habits.

The RBA makes a pointed reference about local and state government in the latest minute release.

“Information on the housing market suggested that conditions remained buoyant. Nationwide capital city price growth was running at around 1 per cent per month in early 2010, and auction clearance rates had remained high in March, especially in Melbourne. Members discussed the factors contributing to the recent strong price growth. On the demand side, population growth was strong, households had confidence about future income growth, and mortgage rates were at below-average levels. At the same time, the supply of new housing was not expanding sufficiently, partly because of the land usage policies of local and state governments and also because of the tightness of finance for developers. Members also noted that the current price growth was somewhat at odds with the falls in housing loan approvals over recent months.” (www.rba.gov.au, Minutes of the Monetary Policy Meeting of the Reserve Bank Board Sydney – 6 April 2010)

Maybe it is time to diversify your home loan. Perhaps a mix of fixed rate and variable with a full offset against the fixed rate. Even an offset against both loans would be handy. Make friends with a reputable mortgage broker get the inside information about your home loan provider instead of just the sales speak.

My opinion is that the RBA may have raised rates too quickly, home loan approvals have now fallen for 5 straight months.

Speak to your mortgage broker, find out what your borrowing capacity is. Prepare to take advantage of some bargains as people try to offload homes in the mortgage belts. 2010 may just be the year to start your residential property investment journey.

Owner occupier Home Loan approvals in Australia are down. The Australian Bureau of Statistics reports the number of owner occupied housing loan approvals dropped 4% in February 2010 as compared to January 2010. Loans for the construction of dwellings also decrease 2.8%.

So the RBA puts up interest rates in April?

The message, get ready to cash in on some bargains in a rising property market.

If you have the capacity and are contemplating buying an investment property, start making ridiculous offers on house’s you like. The higher rates go and the nastier the banks become, the tougher it will be for those who are highly committed.

Many will be tempted to sell. Be ready to be ruthless. There will be no place for compassion.

Your rents should reflect rental demand. The government will have some hand out available for those who need to rent, so charge as much as you can.

You need a competent mortgage broker if you are going to get the best mortgage finance deals. Shop around and get your advice in writing.