Personalised Home Loans
Your Credit Rating is only important if you need a loan, and frequently there are people out there that don’t think they will ever need a loan.
While a bad credit rating won’t rule you out for a loan, it can make it much more expensive, especially for Personal or Car loans.
Generally the Big Banks will almost always decline anyone with a default on their credit report.
However there are other lenders around that can still offer good rates if the Defaults have been paid some time ago.
If the defaults are not paid, then the options are tougher and usually much more expensive.
Get a free copy of you Credit Report from here: www.mycreditfile.com.au
Refinancing
WHY?
This is about reducing the Interest costs of debts.
Interest is the Cost of Money.
A Credit Card, often has a rate of 18.99% or 19.99%
Close enough to 20%
So for every $100 in debt you have over a year, you pay $20 for that $100.
A Car loan at 15% is $15 for every $100 over a year.
But if you could refinance your debts into a lower interest rate, maybe 10% or 12% you are paying $10-$12 for each $100 you have borrowed.
You don’t do this to borrow more, you do it, so that you can pay it off faster.
Instead of paying the lender interest, $3 -$5 – $10 extra on your debt, this money can be directed to pay off what is actually owed.
Suddenly your debt can be paid off in 2-3 years, not 4-7 years.
If you have a home, and Mortgage, and consolidate the Car, Personal Loan, Credit Card into it,you can reduce your interest cost down to $3-$4 per $100 you owe.
Suddenly your minimum $1200 in repayments each month.. that don’t seem to be paying anything off those personal debts, could become $600-700 per month, but you can pay an extra $200-$500 (the equivalent earlier total repayments) and pay the same debt off in only 2-3 years.
This an important thing to consider.
Personal debts are the most expensive debts, and can sometimes get to be too much.
Combining them and continuing to repay a similar amount will save you a large amount of interest and get you debt free earlier.
Many Personal Loans now have interest rates based on your Credit Score, so being up to date on your repayments, and knowing your Credit Score and History are important to consider.
See the Link Above for getting a copy of your Credit Report
Did you know that when you sign up to mobile phone plan you’re actually signing a Credit Contract? Often, this is the first time you’ll ever experience having your credit checked. A mobile phone plan isn’t a loan of money, but your mobile phone provider gives you a handset that you must pay off. Making sure you choose the most appropriate mobile phone plan for your needs is a quick and easy way to save some money when used properly. If you frequently make overseas calls or need access to large amounts of data, choose a plan that corresponds to your usage habits. Before committing to a contract be sure to thoroughly read, understand and check that your chosen service is right for you. Do your research, take into consideration your finances and don’t commit to more than you can afford.
Have a come across a few situations recently where a person or couple have been saving for a Home, but in the lead up to the purchase, and in particular the finance approval, the savings get spent on a car, a wedding, travel and the savings largely disappear.
While there is nothing wrong in any of this, and often family members or friends have said they will offer funds or a guarantee for the home purchase, the lenders seem to have trouble with the idea that you would save for a house deposit, and then spend the money elsewhere.
The Lenders tend to then ask for a lot more details and proof of where the money from family is coming from, and if the person can afford to lend or guarantee it.
Where the offer is for a Guarantee, most banks will only accept a Parent, some a sibling, but none will take a Grandparent, Uncle or Aunt, or even a family friend.
I have even heard of a friend of a purchaser with a number of assets, essentially self funded by their investments offer a guarantee, but the banks would not accept.
*** The Lesson with these very limited options, is if you have saved your money for a house, keep it in savings, if you need to buy a car, take a holiday/travel or something else comes up, and someone offers to go guarantee… Ask that person to pay for that other item, as the case presently is that you may not be able to use the offer of a guarantee to buy the home.
If your wanting to payoff your mortgage faster than most, the low interest rate is only part of the equation.
Many mortgages have fixed costs, monthly or annual fees that add to the cost of your loan.
So while you want a low rate on your loan, don’t have a situation where a large part of your payments each month or year are only paying the lender for taking your money. If you are paying fees, it should be for features that you use, but there are often lenders that provide extra features for little or no extra.
We can help you to Compare and to explain the extra features and compare costs for you.
When you see a Interest rate for a Loan, look at the Comparison rate, if there is a big difference, you can bet there are some big fee costs tucked away in the deal. The closer the Comparison rate is to the advertised rate, the better off you are likely to be.