Weekly wrap - Saturday 20th March

Grateful for the Dream Team

It’s almost April, three-quarters of the way through the financial year, and it's been such a big year. And as exciting as that is, the level of volume often comes with some overtone challenges and we really embrace that as a team. We’d like to take the time to really acknowledge our Loan Market Edge family. It is such an amazing team who gives support to our clients. We probably don’t get a chance to thank them enough, but we’re incredibly grateful and thankful for the efforts they put in, and the feedback we get from our clients. There’s a team of rock stars behind us and we couldn't possibly be where we are today without them.  So let’s say a big thank you to the dream team!

Would you like to save $55,000 in 90 days?

That is a feel-good story. We've been working with a client since December. She was introduced to us as someone looking to be a first-time buyer. She wanted to take advantage of the grants, and met some of the requirements. We put a really strict and solid savings plan in place from December to get through to March, knowing that the first home loan deposit scheme and the home builders had been extended, and noting that we needed to have 5% genuine savings to meet those requirements. We did have a mixture of deposits, but didn't quite qualify for the federal government incentives.

We're 90 days in, and this week we got to the point to celebrate: we’re actually able to launch the application and to talk through the numbers. What a time to be a first-home buyer!

Because of the work we've done over the last 90 days to get us this position, we've qualified for the First Home Loan Deposit Scheme: the Government has guaranteed the mortgage insurance, which is a saving of a little over $15,000 with the deposit she had. Add another $15,000 for the Great Start Grant, $15,000 for the home builders that will be coming to her at a later date, and $10,000 saving for stamp duty, and this client saved a total of a little over $55,000, just in grants and incentives over a 90-day plan.  We couldn’t be more excited for our client! 

And we're now down at a 2.6% pa variable interest rate, and we've got a fixed rate post build at 1.99% pa. These numbers show us it’s cheaper to buy than to rent!

Kudos to her for the work she did, for listening to every step. It's not always about applying straight away. In this case, putting up a plan, and spending 3 months getting her bank-ready ended in an amazing outcome.

Now, the home builders might be off, but there’s still allocations for the First Home Loan Deposit Scheme, the Great Start Grant and the no-stamp duty. So get in touch, and let us help guide you through that process.

Construction lending policy update

Banks are all very different in how they lend money. Especially when it comes to how much deposit you need. Currently, Australia is experiencing a massive influx in construction with all of the amazing incentives that are available at the moment. One of the major banks has just reduced their loan-to-value ratio, meaning you need more deposit if you want to go with construction. Quite a lot of banks cap out at about 90%. The bank we’re talking about today did a huge volume in a 95% space, and was probably one of the better ones at it. Interest rates were pretty good. They'll now withdraw back to 90%.

So we now only have got a handful of options that will go to that 95% space. Therefore, if you're pre-approved, you need to make sure you're checking if you still can go to the level you were going to when you were pre-approved if you're getting build contracts and things like that done, because a lot of those changes around policy tend to be put in place immediately.

If you're in that position, definitely reach out and we’ll review. The good news is we've still got lenders that are doing it. There's still things that we can help with, but best to get on top of it sooner rather than later.