According to the minutes of the meeting, the board members discussed the economic crisis in Greece, with developments in the Greek economy having been the major factor influencing financial markets over the last month. Towards the end of June the outlook was generally pessimistic; however, improvements were seen with the implementation of fiscal measures by the Greek government. The new package was important for the coming tranche of official funds to be allocated under the original program of the EU and IMF. Uncertainty remains regarding compensation for the funding gap for the year 2012 given that Greece is currently unable to raise funds in their bond markets. The original aid program thought that Greece would be able to raise funds around €25 billion.

Other options are being considered for bridging the funding gap. Part could come from further budget measures and increased official assistance, and part from the participation of current bond holders in a debt rollover. Problems with the second option, however, include the need to avoid such a proposal being characterized as a debt default. A uncontrolled default could damage the global economy, if there were contagion to other European countries and a resulting loss of confidence in policymakers’ ability to control the fall out.

Reflecting concerns about Greece, the yield spread between the German bonds and sovereign bonds of countries in Europe receiving financial aid from IMF and the EU all reached new highs.

While the prices of units in inner cities such as Yarra and Melbourne have gone down, the floor space of apartment properties decreased as well. The floor space of a one-bedroom apartment shrunk by eight percent to 46 square metres and the floor space of a two-bedroom apartment was reduced by 11 percent to 66 square meters.

Smaller apartments are a result of a stronger demand from local and international property investors. Two-bedroom, two-bathroom properties are being reduced to two-bedroom, one-bathroom properties to trim down construction costs and increases the rental income that an investor can get. However, some banks impose larger deposits for apartment units with a floor space of less than 50 square metres.

It is important then that if you are looking to invest in property whether it is a home or a unit that you seek the advice of a mortgage broker to ensure your home loan deal is the best one for you.

Borrowers seek the services of mortgage brokers to have an access to a wider range of mortgage deals to get the best service possible. A mortgage broker has the ability to negotiate with a wide selection of lenders to get all of the loans that they offer. These lending firms can be banking institutions or private lending ones.

Brokers can evaluate your financial situation and find an ideal term for it. Since the home loan market is very competitive, there are a number of loan terms that suits your status very well. It is the broker’s responsibility to discern which among these deals is the most beneficial on your part.

While it is the lenders who should pay the commission of mortgage brokers, there are some who charge borrowers a professional fee. This commission does not change the interest rate that a borrower will pay for. Big lending firms like Heritage, ING, Citibank and Macquarie Bank rely on mortgage brokers to market their products while ANZ, CBA, NAB and Westpac have a mortgage broker network.

During the first meeting with your mortgage broker, he must ask you to divulge on your financial status. This will help him find a suitable loan deal for you. It would also help if you will explain your future plans as well so that he can also find a deal that is flexible enough to cater for these changes. You must give the most accurate details to the broker and bringing vital documents to your meeting will greatly help.

After you have divulged information, he must discuss the best options for you and explain the documents for your loan application. The broker must also help you accomplish these forms until the application has been approved. He must also discuss with you the costs and fees that are entailed in the loan application.

Once the loan application process starts, the mortgage broker can negotiate with your chosen lender to get the best deal possible. He must also make a follow-up with the lender and communicate with you when questions or problems arise. A broker must give your Property Value Reports for free.

To know that the mortgage broker that you are dealing with is a reliable one, you must check his qualifications and experience. It would also help if he is a member of the Mortgage and Finance Association of Australia for they work under a code of conduct. Aside from these credentials, here are some characteristics that will help you determine if you are dealing with a good mortgage broker:

First, his services must be free of charge and must include information about the deal, negotiating a loan deal for you and facilitating the paperwork from initial filing to approval. Also, he must find time to know your current and future financial status. He must also have a lot of home loan options from banks or private lending firms under his belt. The home loan options that he has must be both conforming and non-conforming.

Then, you must make sure that your mortgage broker is not working for just one lender and he discloses all payments and commission received to make sure that he is not working for a bigger commission. He must also show a comparison of the ideal loan terms for you using reliable and up-to-date computer software that contains all potential home loan deals in the market.

A good mortgage broker must also comply with the Privacy Act to protect your personal and financial identity. They must also have appropriate insurances and he must be keen in explaining complex loan terms in English. And most important of all, you can ask the borrowers who have worked with him before to determine whether they have a token of approval for the broker.

You can avail a credit impaired loan due to unwise financial decisions that decreased your finances. With a credit-impaired loan, you can have our own property despite a poor credit rating. If you have just transferred to a new job or if you have come up with a new business, you can also apply for a non-conforming loan.

You may also avail of a credit impaired loan if your income is irregular or if your tax debts are high. If you have sent a lot of inquiries to the Credit Reference Association of Australia, this makes you eligible for a credit-impaired loan as well.

Credit impaired loans can be availed in fixed, variable and split loan options. They also carry useful features like the line of credit, redraw and offset capabilities. When it comes to refinancing, they also become less flexible.

A credit-impaired loan can help erase your negative credit lines in the past. And because its rates have decreased over the years, its monthly repayments have gone down as well. This could help you have a sense of financial discipline which you might not have in the past.

Here are some tips to make the best of interest rate increases.

1. Work on your budget.  Plot out possible shake-ups before rate increases happen. Working on your budget according to present rates and make another budget with rates that are two percent higher than the current rate. If the adjusted budget is not enough for your finances, you know you need to trim down on luxuries.

2. Reduce your borrowing.  Determine how much you can pay while taking into consideration potential rate increases. Once you have worked this out, save as much as you can and transfer dividends and tax return to your home loan account. Keep in mind that there is an interest amount for each dollar that is lent to you so you must save as much as you can.

3. Switch from a standard to a basic home loan. This strategy alone can slash your interest rates by 0.4 percent. Nevertheless, remember that this type of loan does not have the same flexibility options that the standard loan has and that extra repayments might even be penalized.
As much as possible, do not strike honeymoon loan deals for it contains hidden expenses. Refinancing from a honeymoon loan during the term’s initial years might entail high exit fees as well. Also, the standard variable interest rate for a honeymoon loan becomes higher after the allotted honeymoon period which usually lasts from six months to one year.

4.Repaying from the start can help you fight interest rate increases. A $50 extra repayment for a variable home loan worth $100,000 can reduce the term of your loan for a few years. This move also gives you a rebate of thousands of dollars in interest costs. It is best to start extra repayments at the start of the loan instead of making your budget sustain rate hikes for extra repayments can offset the loan’s principal amount and raise the equity of our property.
You can also lessen the effect of interest rate hikes by paying up-front charges like loan establishment fees, legal costs and valuation fees immediately. If you are saving for deposit, you can have a separate account that will answer the expenses of these up-front fees.

5. Consider a fixed rate.  Fixed home loan to have stable repayments that can negate the effect of interest rate hikes. Even if you are already late in fixing your loan, you can have a portion of your loan transformed into a fixed home loan. Doing this will give you a fixed repayment amount despite changes in the interest rate.

6. Consolidate your debt into one account to avoid multiple interest rate increases from each of your debts. Consolidating your debt will give you a lower interest rate as compared to paying separate 15 percent interest rate increases from your car loan and credit card bill.

7. Transferring into a fortnightly repayment is also a great deal in paying your term faster. Shifting into this repayment option gives you more chances in trimming the principal amount of the loan which in return trims its interest rate. Shifting into a fortnightly repayment can also add equity to your property.
And last but not the least; you must make the redraw facility work to your favor. In periods of low interest rates, you must give loose amounts from your salary to your loan account. This will give you a buffer against rate hikes. Also, you can redraw whatever extra amount that you contributed in times of need.

AFG also stated that first time home buyer’s total home loans decreased to $357 million in October from the $489 figure registered in September. AFG Sales and Operations General Manager Mark Hewitt told that the decline is not a surprise for a lot of people are expecting it. He also added that the interest rate hike added to the fall.

The $357 million October home mortgage value is roughly half of the $732 million first time home buyer’s mortgage value that was registered in March which translates to 28 per cent of the total mortgages. The high value in March was ignited by the first home buyer’s belief of an end to the financial year deadline.

The RBA raised the cash rate to 3.5 per cent after succeeding rate hikes of 25 basis points each in October and November. This rate hike brought the cash rate to a 49-year low. Also, the government has scaled down the First Home Owners Grant to $10,500 to existing home and $14,000 to new homes. Because of these developments, Hewitt added that the second rate increase, buyers became more cautious about their home purchases.

For more information or to apply for a home loan online, click here.