Hot Off The Press, Courtesy
Of Channel 9 News
Almost one million Aussie households are
staring down a mortgage ‘time bomb’
Almost one million middle-income Australian households are facing a mortgage time bomb as soaring living costs plunge families into repayment stress.
A new analysis by Digital Finance Analytics (DFA) has shown that the number of households currently in mortgage distress has risen by 20 percent in the last six months to 910,000.
At the current rate, more than one million households will be struggling to make repayments on their home loan in 2018.
Primary factors ratcheting up the stress faced by families include stagnant wage growth, living pay cheque to pay cheque and the looming threat of a rise in interest rates.
Martin North, Principal of Digital Finance Analytics, says that the risks of more middle-income families borrowing enormous loans from the banks are rising.
“Risks in the system continue to rise, and while recent strengthening of lending standards will help protect new borrowers, there are many households currently holding loans which would not now be approved,” said North.
“The number of households impacted are economically significant, especially as household debt continues to climb to new record levels. Mortgage lending is still growing at three times income.
“This is not sustainable.”
Broken down by region, NSW had the most households in stress with 238.703, followed by Victoria with 250,259, Queensland with 162,726 and WA with 121,393.
Households are defined as being “stressed” when their net income does not cover ongoing costs, including repayments on their home loans.
Households that have a tight budget but manage to make ends meet are defined as being “mildly stressed”, and those who are unable to make a mortgage repayment within the next 30 days are defined as being “severely stressed”.
Nine Network’s Finance Editor Ross Greenwood said that it’s “pretty obvious” why families are struggling.
“Families are struggling with rising costs. Rising health insurance premiums, rising electricity bills and on top of that, many families have taken on very big mortgages,” said Greenwood.
“Now if their wages aren’t growing fast then quite clearly they are going to struggle.
“Another worrying statistic is that there are now 52,000 households that this organisation has identified that are now 30 days behind on their mortgage repayments, that means technically banks could walk in and close them up.”
I have been in the mortgage brokering industry now for approximately twenty years and I have now seen a whole generation of Australians take out mortgages who have no experience of what a 7-8% interest rate mortgage is. Many of these borrowers insisted on borrowing to their maximum capacity. Although in the last six months banks have been tightening up on what any new borrowers can get loan amount wise, there is still many years of previous borrowers who pretty much were able to borrow almost anything they wanted.
Recently we have seen not only banks but many other commercial enterprises prey on the Australian consumer with increased prices (energy companies being one of the notable ones). Although many borrowers have budgeted diligently there would be very few of them that would have factored in some of the essential services price rises we are seeing.
For many there may not be a solution, however our advice is to drill down on your budget and find every last cent you can find and start paying it onto your mortgage. I would recommend you beg, borrow, and tighten your budget belt to find whatever you can to pay toward your home mortgage in order to escape the mortgage stress that may be headed your way in the not too distant future.
Also, get with your home mortgage broker, because if you have a 4 in front of your home mortgage you are probably paying too much.
Several financial issues that might ruin your marital relationship
A fantastic relationship may be based upon rock-solid principles of love and respect, nonetheless money has a way of rumbling the very foundations of even the best marriages.
Listed here are a few finance concerns to consider, regardless of whether you happen to be beginning a brand new partnership or if yours is by now well-established:
Setting out with debt
Marriage ceremonies needn’t be pricey, but when you happen to be organizing a large social gathering for two family units, and also assorted good friends and assorted hangers-on, the price can rapidly start mounting up.
To pay for their fantasy wedding’s significant package price, quite a few young couples set off deeply into debt, maxing out their credit cards or even applying for personal loans. This leads to more money problems further down the line as they battle to handle the repayment schedules on these outstanding debts.
Even though the marriage ceremony you’ve always dreamt of doesn’t need to be out of the question, you need to at the beginning be concerned about the fees involved, and also to be receptive to making compromises where necessary. If you think that your wedding will be worth going into debt for, make certain you’re certain that you can manage the repayment demands with out risking your financial future with one another.
Discordant money values
There’s no “perfect” strategy to take care of your household finances– it will be based on your own individual circumstances. If two spouses possess two distinct thoughts and opinions on what is ideal with regard to their mutual financial future, it can result in issues, which can lead to challenges.
Numerous people solidly believe in the Shakespearean perception of “neither a debtor nor a loan provider be” and are in opposition to entering into almost any debt. This kind of principled mindset may be problematical if their companion is definitely a believer in “invest money to create money”, and is particularly in favour of employing a controllable degree of financial debt to attain their fiscal targets, including taking out a mortgage loan to acquire your dream house or investment property.
In situations such as these, a degree of trade-off may be required, coupled with a good amount of communication.
Attempting to keep money secrets
It has to be self-explanatory that mysterious secrets and deceptions can cause marriage complications. When you are looking at money-related factors, you not only risk personal issues including trust issues, but serious fiscal things that may affect each of your financial circumstances.
Monetary factors in a partnership range from camouflaging spending, masking past outstanding debts, or perhaps sustaining a private bank account or credit card without your companion’s knowing about it. To keep your financial situation as well as your partnership on a solid footing, trustworthiness needs to be a priority.
Having shared credit accounts before you’re really ready
A whirlwind relationship can be delightful, but comes along with its share of pitfalls. Whilst you may choose to quickly share all sorts of things with your significant other, from your house to your last name, it is often worth taking a contemplative minute before committing to mixing bank accounts or your credit cards.
In the event the marriage fails for any reason, it can be difficult to disengage your personal finances out of the mutual accounts, and disagreements over who owns what could be hard to settle impartially. In the worst-case experience, your significant other could possibly run up a massive debt using a shared credit card, or deplete your mutual banking account, and leave you with little or no savings along with a rotten credit standing.
And This leads us to the final financial matter that can destroy your marital life:
Not ever making plans jointly
Whilst joint finances come with its share of potential risks, so does keeping your finances completely segregated. Unless a husband and wife co-ordinates their endeavours, accomplishing their financial targets, either independently or as a team, can take much longer, work, or tremendous cost.
It might not be exciting, however sorting out a household budget can be a big boost when it comes to creating monetary decisions as a couple. Whenever relying on one another, newlyweds can find even more assistance using a qualified financial planner or finance broker, who can take their personal circumstances under consideration when offering money help and advice.
One of the most important financial decisions that you’re going to make today is that of getting a home. To get a house today, you’re going to have to work with a financial investment that takes on many years. It’s a decision not to take lightly. With the sheer number of applicants that want a mortgage, banks and other lenders are now starting to restrict the qualifications that someone has to have in order to get a home. This can be both helpful and a hindrance to those that are trying to get a home.
The change in the qualifications a person needs to get a home has been received with mixed reviews. As Australians seek to buy property, they are starting to realize that the property market can shift wildly depending on several factors, including their income and buying power. To fully understand this, and the changes, it’s imperative to consider a few notes in regard to the rules and regulations that seem to be calling for more experienced brokers overall.
Factors at Play
The first thing that you need to realize about purchasing a home is that there are a lot of different factors at play when you apply for a mortgage. Whenever a person seeks to get a loan, the broker has to consider a great deal of elements, including financial history, current employment records, affordability and other risk factors that aren’t always seen by individuals.
Purchasing a home should not be taken lightly, and therefore brokers are now putting in a lot more scrutiny to figure out just how qualified a person is before they give such a large sum to them for a home purchase. With the changes by the federal government causing a disruption in long term mortgage handling, individuals have to understand that there’s no “yes or no” scenario here, as a lot of elements have to weighed out.
Why Mortgage Brokers?
For consumers that aren’t certain that they want to deal with brokers, it’s imperative to realize that they are going to help smooth over the lending process. Mortgage brokers today help consumers figure out what loan type is best for their specific needs. It seems like this can be difficult at first, but you’ll find that brokers are trained to isolate risk factors and help people get the home they want, without breaking the proverbial bank.
A mortgage broker will sit down with a consumer, and they’ll discuss assets, price points, income, self-employment elements, and so much more. They’ll tailor a solution that meets the needs of the consumer, and not just approve a dollar amount. This is better than just asking for a set amount, and hoping for the best. The broker is trained to help meet the needs of the consumer, simple as that.
The Cost of a Broker
People assume that getting help in financial matters means that you’re going to have to pay someone a fee up front. That’s not the case in relationship to mortgage lending. In fact, you’ll find that there are plenty of free services that you can work with, especially if you want to get the advice of a mortgage broker about lending and more.
Mortgage brokers are in the business of connecting people with lending opportunities that they can afford, so that they can purchase the home of their dreams. They can help with focusing on mortgage rates, and price points that are not going to cripple the finances of any one individual. It’s a positive push forward.
First time homebuyers will delight in knowing that someone will help navigate the road of purchasing a home today. Purchasing a house is not a transaction that works the same like buying anything else. You’ll find that you’ll need to work through a variety of elements if you are to get the right home for your family. A broker can answer questions, and explore solutions that are going to help make this a bit easier to manage.
Dealing with Mortgage Brokers
For those that haven’t dealt with a broker or the new rules that are in place for mortgage lending, consider asking questions. Write down questions beforehand, and get ready to ask questions that you are not sure about. Do not feel that any question is off limits, or “dumb”. There are no dumb questions here, because you’re dealing with a loan amount that could take you decades to pay off. Do not resist asking questions, it’s that simple.
The mortgage broker that you use will not simply help you get your mortgage, mind you. They will help you understand any changes and updates that come through the marketplace after the fact. If there’s a change, problem, or new legislation, you’ll hear from the broker that helped you, so that you know what you’re dealing with. Buying a home is not something that is easy to get done on your own, and brokers know this, which is why they build a relationship with clients to help navigate the real estate market appropriately.
Your mortgage professional is in charge of staying abreast with all the latest news, views, and updates. They help navigate the real estate world, mortgages, financial matters, and any abrupt changes that the Reserve Bank of Australia may end up moving forward with.
At the end of the day, the best tip that you can take with you today is simple, be patient. That’s right, be patient with your mortgage lending and investigation. You may have found your dream home, but don’t assume that the transaction will be open and closed within a short span. Get a professional mortgage broker to help you gain access to the bigger picture, and you’ll end up with a positive push forward.
Home buying takes time, but so does the lending solution. If you rush things, or try to avoid using a broker, you may find yourself with a mortgage that is too hard to pay off, or rates that are not favorable for you at all. Take your time, ask questions, and get a good broker on your side.
Want To Make Money In Gold? Read These Tips.
The eternal fascination of gold
Gold has always been a metal that is highly prized. It has been revered for thousands of years. If you are interested in investing in gold, these tips will help you maximize the return on your investment.
Think about selling gold on the web. You don’t have to go to a physical location to sell gold any longer. There are plenty of websites that are ready and willing to buy your gold. The site sends you a prepaid mailer to put the gold pieces in. The payment amount you will receive is normally based on the day to day market value once your items arrive and they have had a chance to assess their value.
Handle with thoughtfulness
Always research a company you want to send gold jewelry to. Your package needs to be insured, and you need to be aware of when you are going to receive payment. Lastly, take pictures of all items you’re sending so you have proof in the event of a dispute.
You need to make pre-arranged delivery arrangements prior to buying any gold from a dealer. Delivery times are important. You should insist on some king of written contract or have some king of guarantee put in place as to when your purchase is going to arrive if the dealer can’t offer you anything other than a prompt delivery service. You should have the date of delivery clearly listed. Do not finalize your order until you have received some form of written confirmation.
Always get an expert opinion
If your not sure about its current value, of course you can always take the ultimate step and have any gold jewelry you have appraised. You’ll have to shell out a little bit of money, but you’ll have a good idea of what your gold is worth. Be sure to select an appraiser who is accredited and independent for a realistic appraisal. If you do decide to sell the gold, also keep in mind you usually won’t get the full value.
If the gold you are purchasing is an investment in your future, you must be aware that there are certain kinds you should target. The gold has to be IRS approved. The gold has to be either coins or bars, of the 24 karat variety. Buy bars instead of coins to increase your profits.
Gold party fun
When at a gold party, talk with the rep about how they make the determination on the karats of the jewelry being sold. Items are usually stamped. A visual cue may not be available so other methods are used to figure it out. Any representative trying to use and acid test is a definite signal of an inexperienced gold agent, as this variety of testing is not one of the more fool proof ways of determining the karat density.
You can actually sell your gold through the mail! Most sellers enjoy this process so much due to its simplicity. The company will send a bag for your jewelry and once they receive it back in the mail, they will send you a check. Nonetheless, keep in mind these types of dealers normally aren’t going to pay you too much for any jewelry you offer them, there are other options you will probably want to consider first. A seller might offer you as little as 30 percent of the value, so be careful.
How real is it?
A smart gold investor understands how to perform a test to know what the grade of gold is. Gold purity is measured in karats. The more valuable the piece of gold is due to its purity, as you go higher in the number of karats. Don’t just rely on the karat stamp. Understanding how you can test gold’s purity will help ensure you never end up overpaying.
Ask people you know for their broken jewelry. Invest in a good jewelry scale, weigh the gold and you can pay your relatives more than a pawnshop would pay and still be able to make money in the deal.
You never know
You can often find a good price on gold by purchasing old gold jewelry from relatives. You can purchase a reliable jewelry scale that will measure the exact weight of the gold for you. This then will enable you to make a fair decent offer to your friends’ and family members’ for the value their gold pieces.
Just as is the case with any other form of investing, you invariably should always look at gold investing as a longer-term gambit. So, try and avoid buying gold during the times of peak prices. In fact, when prices are high, you should be selling. You can get a much better return on your investment if you sell and buy at the right moment.
Golds allure has it’s risks
Gold is usually a safe investment but this precious metal can also be volatile. Avoid this market if you can’t handle the fluctuations. If you are able to handle it, then you can still limit the downside risk involved. Invest only a tiny percentage of your portfolio in gold. Limiting gold to five percent or less of your total investment is a good idea.
Know what you want before you invest in gold. Its value can also be volatile, although gold can, for instance, be a good way to keep your savings from being impacted by inflation. If you’re able to set a limit on being exposed to it and have a few things in mind before you set out, you can make more money.
It probably won’t make you rich overnight
Now that you have all this useful information, you’re ready to dominate the gold market. Gold prices are volatile and there are risks involved so don’t expect to earn a massive profit immediately. It is advisable to look at gold purchase as a long-term investment.
10 Essential Saving Tips for your Household Expenses
As the song goes ‘I want to be a billionaire’, not all have the same ultimate goal for the simple reason that it is just – too impossible. However, for those who are looking for financial freedom, there are certainly a number of ways on how to go about doing this. Among the best things you can do in order to save money and have financial freedom is summarized in these 10 essential saving tips.
One popular app that people use to manage their money and bills is the Clarity Money app. It can be linked directly to the bank account and ties with your payments, bills and other monthly monetary obligations. Using this app will allow you to monitor your expenses as well as services that are no longer of any use to you.
Cutting the Cord
Many people say they could not live without cable; however they are also having problems dealing with its monthly charge. Having a cable connection could cost as much as $30 which if invested in other things could already make quite a difference. The internet is an excellent place to find your favourite shows and even more. This is why it is already impractical to have a cable connection.
Finding a more manageable internet provider
The internet is among the best things that every household needs to have. It provides the luxury of convenience that was not possible decades ago. While there is certainly no need to cut the internet cable cord, you can always find affordable and much more manageable internet services providers out there. The competition is also high for these services and one company will always have something more affordable to offer than the other – make sure that you are invested in the more affordable option.
You can also negotiate with your ISP (internet service provider) for a more manageable fee for a good internet speed or package.
Purchasing in bulk
The basic necessities that you use at home should be bought in bulk for you to save more. These basic items are charged with bigger fees if packaged per piece. However if they are packaged by bulk or in bundles, they are more likely to be more affordable. Having to purchase by bulk also relieves you of making frequent purchases which directly concludes to more travel time, expenses and stress.
Making use of your dishwasher
The best thing about dishwashers is that it can save you both time as well as money when doing the dishes. It makes use of a much smaller amount of water compared to the traditional way of washing the dishes. With the lesser water used and the time spent in doing this chore, you are surely going to save more.
Taking advantage of free home energy audits
There are many companies that conduct free energy audits to homes in order to make sure they are energy efficient as well as safe from fires, gas leaks, etc. taking advantage of such services is essential for you to track the energy efficiency of your home. Knowing this will help you determine if you are making full use of your energy investments.
Using Programmable Thermostat
Using a thermostat will keep you warm during cold days and feeling cool during the hot summer. Using a programmable thermostat, you will have the same benefits but be able to save more per year. With the automated set up for this device, it won’t need constant monitoring and will have lesser chance of using it too much as it shuts down on its own.
Starting a Garden
Although it would require manual labor, starting your own garden could actually save you more money. Instead of buying your produce, you can simply grow them in your backyard. Fruits and vegetables actually costs way cheaper when grown compared to when it is purchased in the supermarket. You’ll be surprised how much you can earn from it and you can also make sure that what you are eating is fresh and clean.
Renting out any unused home space
If you own a spacey house with a lot of rooms left unused, you may want to rent them out instead, in order to gain money from it. Instead of having your basement or attic filled all dusty and dirty, why not have someone rent it out instead. It can save you the cleaning and can also save you money.
Unplug unused devices and energy suckers
What you do not know is that despite the size of a device or appliance, it can actually suck more energy than those with bigger size. Also, even if appliances are unused, they still consume a little amount of energy which when accumulated in the long run can spike up the bill. So always be sure to unplug your device from the outlet when not in use.