Banks are tightening their lending criteria, and home loans are getting harder to get. One must remember that if you borrow more than 80% of the value of the property, most loans will need to be Mortgage insured. It is at this stage that loan applications are falling over. The Mortgage Insurers are really watching who they insure after no doubt taking a big hit in the recent GFC.
Have you recently lodged an Application for a home loan only to be rejected by the Bank for reasons such as - not enough savings or deposit, bad notations on your credit file, self employed or irregular contract work, casual employment, not in your job long enough. These are all reasons that make it hard to get a Home Loan in today's market.
Don't give up! There are other ways to buy property without even walking into a Bank. The team at Carver Lawyers have designed a Home Ownership Program ideal for people who can't get a bank loan.
Over the years I have found that the standard real estate transaction and buying process does not work for everybody and there are other ways to buy property. Don't be locked out of the property market just because you cant get a home loan.
The dream of home ownership is possible using other strategies rarely know by others in the industry. The standard buying process needs to change to make home ownership viable in one way or form to many not just a few.
There are many people that don't comply with banking guidelines including the self employed, contract workers, casual employees and cash earners. The Carver Lawyers can help people that just can't seem to get a Bank Loan.
If you would like more information on the Home ownership Program designed by Carver Lawyers, call (02) 9773 4550 or www.ozihome.com
Saturday, November 20, 2010
Monday, June 7, 2010
Buyers finding it harder to get a loan
The Banks are making it more difficult for homebuyers to get a loan. In a
recent article, one of the largest mortgage brokers in Australia has
indicated that the Banks are knocking back up to 130 prospective buyers a
week.
recent article, one of the largest mortgage brokers in Australia has
indicated that the Banks are knocking back up to 130 prospective buyers a
week.
The Banks are tightening their lending criteria and they will continue to
knock back high LVR loan applications if:
- Buyers do not have a genuine deposit
- They have not been employed in their job long enough
- Borrowers do not have a track record of savings
The Loan to Value Ratio has also tightened. The Banks are no longer giving
100% loans....those days are gone. Banks are going back to a traditional 80%
loan which means that they will lend 80% of the value of the property. You
need to have a 20% deposit.
Whilst some Institutions are doing loans above 80%, borrowers will need to
have a great track record, such as evidence of a regular savings plan of at
least 6 months, long employment with the same employer and other factors.
The Banks are closely scrutinising overtime payments and employment
conditions as part of the loan process.
The key here is to plan your purchase at least 6 to 12 months in advance.
Talk to a good mortgage broker at the initial stage to make sure that you
fit the criteria to get a loan. If you cannot satisfy some requirements,
works towards rectifying those issues before you look at property. Always
have a loan pre-approval before you look to buy.
Also look at getting a copy of your Credit History to make sure that there
are no bad notations on your file.
In an effort to help buyers that would love to live the Australian Dream and
buy a home of their own, but find it difficult to borrow from the Bank, the
team at Carver Lawyers have developed a Home Ownership Program that helps
buyers into the real estate market. If you would like further information,
you can contact Dean Carver, Property Lawyer on Sydney number (02) 9773 4550
or by contact through www.carver.com.au. You can also view our dedicated
Home Ownership Program site at www.ozihome.com
For a full copy of the article.....click below
http://www.news.com.au/money/lenders-say-no-to-loans-as-buyers-knocked-back/
story-e6frfmci-1225875970785
Dean Carver
Solicitor
Carver Lawyers
Web: www.carver.com.au
Twitter: http://twitter.com/carverlawyers
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Thursday, May 27, 2010
I'm a purchaser, what happens if I don't settle on time?
The Contract for sale stipulates a completion date (settlement date), being the date on which both buyer and seller must settle.
If a buyer does not settle on or before the stipulated completion date, then a buyer may be liable for penalty interest under the contract. A buyer needs to make sure that they are aware of what the penalties are for failure to complete on time. The special conditions of the contract normally provide the penalties for late completion, and on most occasions this can range in penalty interest rates from 5% to 20% per annum (calculated daily) depending on the drafting of the special condition of the contract.
For example, if you still owe the seller $300,000 under the contract and there is a penalty interest rate in the contract for 10% per annum calculated daily, and you delay for 5 days, then the penalty interest would be approx $410.96.
In addition to the possibility of penalty interest, the seller may have the right under the contract to terminate or rescind the contract for the failure of the buyer to settle. There are strict time frames in the contract if the seller wishes to take this course.
Failure to settle by the purchaser, through no fault of the seller, will normally also allow the seller to keep the deposit already paid.
There are also further avenues available to the parties including specific performance, termination and rescisssion. Every contract is unique, and all parties should get proper legal advice during the process.
(Note - these are general comments and parties should always get independent legal advice on their particular situation)
Comments by Dean Carver
Property Lawyer
Australia
Ph: (02) 9773 4550
If a buyer does not settle on or before the stipulated completion date, then a buyer may be liable for penalty interest under the contract. A buyer needs to make sure that they are aware of what the penalties are for failure to complete on time. The special conditions of the contract normally provide the penalties for late completion, and on most occasions this can range in penalty interest rates from 5% to 20% per annum (calculated daily) depending on the drafting of the special condition of the contract.
For example, if you still owe the seller $300,000 under the contract and there is a penalty interest rate in the contract for 10% per annum calculated daily, and you delay for 5 days, then the penalty interest would be approx $410.96.
In addition to the possibility of penalty interest, the seller may have the right under the contract to terminate or rescind the contract for the failure of the buyer to settle. There are strict time frames in the contract if the seller wishes to take this course.
Failure to settle by the purchaser, through no fault of the seller, will normally also allow the seller to keep the deposit already paid.
There are also further avenues available to the parties including specific performance, termination and rescisssion. Every contract is unique, and all parties should get proper legal advice during the process.
(Note - these are general comments and parties should always get independent legal advice on their particular situation)
Comments by Dean Carver
Property Lawyer
Australia
Ph: (02) 9773 4550
Wednesday, May 26, 2010
What is included with the sale of property?
Are you buying a home? How do you know what is included in the sale? Is the dishwasher included? Is the TV antennae included? These and other items are issues that should be specifically addressed in the contract.
The specific details of what is included in the sale is normally contained on the front page of the contract. Buyers should ensure that they properly instruct and discuss with their lawyers as to what they intend including or what they think is included. It is also common for real estate agents to fill out the details of the inclusion. In that case, buyers should ensure that they are aware what inclusions the Agent is marking on the contract before they sign.
Once the Contracts are exchanged and dated, the inclusions cannot be changed unless agreed to by both buyer and seller.
This is also the case with exclusions to the property. For example, if the Vendor does not want his "mounted plasma TV" included in the sale, his lawyer will mark this as an EXCLUSION on the contract. This means that the owner will be taking the TV away from the property at settlement. As a buyer, if you want the TV to remain, make sure that it is marked as an inclusion on the contract.
"pool equipment" is another common area of dispute. If you want the pool equipment to remain on the property, make sure it is marked as an inclusion. Some owners take the pool equipment with them to their new property.
I recently acted for a client that had palm trees on the property (in the ground) that they wanted to take with them. This is uncommon, but was marked as an exclusion on the contract.
Where can you find the list of inclusions on the contract? On the 2005 edition of the contract (as approved by the Law Society of NSW and Real Estate Institute), this is normally found about 1/2 way down the front page in a box.
Before you sign the contract, make sure that you are specifically aware of what comes with the property and what is excluded.
I always suggest that you address the issue of inclusions and exclusions with the Agent at the time of inspection. That way, it is easy to identify what is and what is not included and can be accordingly marked on the contract. You don't want to get to settlement time and find out that the big 50inch TV which you thought would stay mounted in the lounge room has been removed and there are holes left in the wall.
Buyer beware.
(Note - This is general advice only, buyers and sellers should obtain specific legal advice before entering into a contract)
Comments by Dean Carver
Property Lawyer, Sydney NSW
Ph: (02) 9773 4550
The specific details of what is included in the sale is normally contained on the front page of the contract. Buyers should ensure that they properly instruct and discuss with their lawyers as to what they intend including or what they think is included. It is also common for real estate agents to fill out the details of the inclusion. In that case, buyers should ensure that they are aware what inclusions the Agent is marking on the contract before they sign.
Once the Contracts are exchanged and dated, the inclusions cannot be changed unless agreed to by both buyer and seller.
This is also the case with exclusions to the property. For example, if the Vendor does not want his "mounted plasma TV" included in the sale, his lawyer will mark this as an EXCLUSION on the contract. This means that the owner will be taking the TV away from the property at settlement. As a buyer, if you want the TV to remain, make sure that it is marked as an inclusion on the contract.
"pool equipment" is another common area of dispute. If you want the pool equipment to remain on the property, make sure it is marked as an inclusion. Some owners take the pool equipment with them to their new property.
I recently acted for a client that had palm trees on the property (in the ground) that they wanted to take with them. This is uncommon, but was marked as an exclusion on the contract.
Where can you find the list of inclusions on the contract? On the 2005 edition of the contract (as approved by the Law Society of NSW and Real Estate Institute), this is normally found about 1/2 way down the front page in a box.
Before you sign the contract, make sure that you are specifically aware of what comes with the property and what is excluded.
I always suggest that you address the issue of inclusions and exclusions with the Agent at the time of inspection. That way, it is easy to identify what is and what is not included and can be accordingly marked on the contract. You don't want to get to settlement time and find out that the big 50inch TV which you thought would stay mounted in the lounge room has been removed and there are holes left in the wall.
Buyer beware.
(Note - This is general advice only, buyers and sellers should obtain specific legal advice before entering into a contract)
Comments by Dean Carver
Property Lawyer, Sydney NSW
Ph: (02) 9773 4550
Thursday, May 13, 2010
New Property Tax for NSW property
The NSW Government is set to introduce a new property tax on transfers above $500,000. The tax will be added to the existing taxes on transfers and is expected to be 0.2% on property transfers between $500,000 and $1million and will be 0.25% above $1million.
The tax has passed through the NSW upper house late yesterday and it is expected that the new tax will come into effect around July this year.
On a $750,000 purchase or transfer, the new tax will be approx $500 in addition to all other stamp duty and existing charges.
The only positive is that the new tax will not apply to property transfers of value below $500,000. However, with a Sydney medium house price in March 2010 of approx $595,000 according to Australian Property Monitors, it is likely that the new tax will affect many NSW buyers in the future.
For further details, have a look at this recent article
http://www.news.com.au/money/property/premiers-sneaky-tax-on-property/story-e6frfmd0-1225865832122
Stay tuned for the effective commencement date. Buyers should factor these new charges in their own budgets when they look to buy in NSW.
Comments by
Dean Carver - Solicitor
Carver Lawyers (Sydney)
Ph: (02) 9773 4550
The tax has passed through the NSW upper house late yesterday and it is expected that the new tax will come into effect around July this year.
On a $750,000 purchase or transfer, the new tax will be approx $500 in addition to all other stamp duty and existing charges.
The only positive is that the new tax will not apply to property transfers of value below $500,000. However, with a Sydney medium house price in March 2010 of approx $595,000 according to Australian Property Monitors, it is likely that the new tax will affect many NSW buyers in the future.
For further details, have a look at this recent article
http://www.news.com.au/money/property/premiers-sneaky-tax-on-property/story-e6frfmd0-1225865832122
Stay tuned for the effective commencement date. Buyers should factor these new charges in their own budgets when they look to buy in NSW.
Comments by
Dean Carver - Solicitor
Carver Lawyers (Sydney)
Ph: (02) 9773 4550
Tuesday, May 11, 2010
27,000 households have already missed mortgage payments
In a recent article, independent rate monitor, RateCity has indicated that approximately 27,000 households have missed mortgage repayments and this figure is expected to rise.
http://www.news.com.au/money/property/house-prices-set-to-stall-say-experts/story-e6frfmd0-1225864312449
Finally the Reserve Bank looks to have succeeded in slowing the real estate market with its recent rate rise.....only time will tell.
Rising interest rates, increasing unemployment, and rising mortgage defaults can only lead to a slowdown in the real estate market. Good for some, but bad for others.
If you are a buyer, make sure that you allow at least a further 2-3% increase in rates and that you can afford loan repayments at an approximate standard variable rate of 9%.. I would even go as far to say that you should commence making your mortgage repayments at a level much higher than required so that you have an adequate buffer for unforeseen circumstances in the future. For example, if your current rate is 7.5%, why not make repayments equivalent to 9%. Not only will this give you the opportunity to pay off your loan quicker, it should allow you a good buffer if other expenses or repairs come up in the future. Talk to your mortgage broker to make sure you can pay the additional amounts.
With the scenario that sellers are defaulting on mortgage payments, this has allowed the buyer to take advantage of that situation to buy well. Ensure that you have a good negotiator on your side when you go to buy. Remember, you make your money when you buy. So buy right at the beginning.
If you are looking for a professional real estate negotiator to help you with a purchase or help you when you sell, please do not hesitate to contact me.
Dean Carver, Solicitor
Real estate lawyer & Negotiator
Carver Lawyers - Sydney
Ph: (02) 9773 4550
http://www.news.com.au/money/property/house-prices-set-to-stall-say-experts/story-e6frfmd0-1225864312449
Finally the Reserve Bank looks to have succeeded in slowing the real estate market with its recent rate rise.....only time will tell.
Rising interest rates, increasing unemployment, and rising mortgage defaults can only lead to a slowdown in the real estate market. Good for some, but bad for others.
If you are a buyer, make sure that you allow at least a further 2-3% increase in rates and that you can afford loan repayments at an approximate standard variable rate of 9%.. I would even go as far to say that you should commence making your mortgage repayments at a level much higher than required so that you have an adequate buffer for unforeseen circumstances in the future. For example, if your current rate is 7.5%, why not make repayments equivalent to 9%. Not only will this give you the opportunity to pay off your loan quicker, it should allow you a good buffer if other expenses or repairs come up in the future. Talk to your mortgage broker to make sure you can pay the additional amounts.
With the scenario that sellers are defaulting on mortgage payments, this has allowed the buyer to take advantage of that situation to buy well. Ensure that you have a good negotiator on your side when you go to buy. Remember, you make your money when you buy. So buy right at the beginning.
If you are looking for a professional real estate negotiator to help you with a purchase or help you when you sell, please do not hesitate to contact me.
Dean Carver, Solicitor
Real estate lawyer & Negotiator
Carver Lawyers - Sydney
Ph: (02) 9773 4550
Thursday, May 6, 2010
Bank Customers are being ripped off
Recently the Westpac Bank announced a net cash profit of nearly $3 billion in its half yearly results. Great for shareholders but is it good for the bank customer.
Whilst the Bank is making huge profits, it has been brought to my attention that the Banks are paying customers minimal interest for the use of their money. Take for example, Stgeorge Bank which is currently offering an interest rate of 0.01% per annum for your money in a freedom account. That means the Bank pays you 0.01%p.a and lends other people money at an interest rate of approx 7.0%+. Its clear why the Banks are making huge profits.
For example, if you had $50,000 in your transaction account and the Bank paid you 0.01% then you would receive $5 for the year in interest. If the Bank lent that same money at 7%, they would get $3,500 per year in interest. Its clear who is making the "big bucks"
Whilst there is available the option to customers of putting their money in a fixed term deposit at a better rate, say 5%, this means that the customers money is tied up for a fixed period and cannot be withdrawn without penalty. Many consumers are just leaving their money in a transaction account to which the Bank has access for a small interest payment of 0.01%.
The cash economy is virtually gone and everybody needs a Bank Account, whether it is to electronically pay bills or an Account in which to receive their salary. Employers do not pay cash to employees anymore. Australians are now forced to have some sort of account. Banks use that money and pay you virtually nothing for it/. Is this robbery? You be the judge.
I guess, on a question of law, the Bank needs to give some sort of consideration to use your money. Thats why they give you 0.01%.
Australians should keep an eye on where their money is and what they are getting in interest for that money.
Comments by Dean Carver
Solicitor
Carver Lawyers - Sydney
Whilst the Bank is making huge profits, it has been brought to my attention that the Banks are paying customers minimal interest for the use of their money. Take for example, Stgeorge Bank which is currently offering an interest rate of 0.01% per annum for your money in a freedom account. That means the Bank pays you 0.01%p.a and lends other people money at an interest rate of approx 7.0%+. Its clear why the Banks are making huge profits.
For example, if you had $50,000 in your transaction account and the Bank paid you 0.01% then you would receive $5 for the year in interest. If the Bank lent that same money at 7%, they would get $3,500 per year in interest. Its clear who is making the "big bucks"
Whilst there is available the option to customers of putting their money in a fixed term deposit at a better rate, say 5%, this means that the customers money is tied up for a fixed period and cannot be withdrawn without penalty. Many consumers are just leaving their money in a transaction account to which the Bank has access for a small interest payment of 0.01%.
The cash economy is virtually gone and everybody needs a Bank Account, whether it is to electronically pay bills or an Account in which to receive their salary. Employers do not pay cash to employees anymore. Australians are now forced to have some sort of account. Banks use that money and pay you virtually nothing for it/. Is this robbery? You be the judge.
I guess, on a question of law, the Bank needs to give some sort of consideration to use your money. Thats why they give you 0.01%.
Australians should keep an eye on where their money is and what they are getting in interest for that money.
Comments by Dean Carver
Solicitor
Carver Lawyers - Sydney
Wednesday, March 10, 2010
Selling your home......A Building Certificate from the Council will help with the sale.
I recently acted on behalf of a client who was looking to purchase a property. After inspecting the property for the client and also perusing the contract for them, it was apparent that there were parts of the home that were not Council approved.
The uncertainty as to whether the property complies with Council rules and regulations can have an effect on the price, and in fact, scare buyers from making an offer.
If you are considering selling your home and you have made renovations or additions to the property, I would definitely advise that you obtain a Survey and Building Certificate from the Council which can alleviate buyers concerns. In a nutshell, a Building Certificate is a Certificate issued by the Local Council that says that the property currently complies with all rules and regulations set by the Council.
This type of Certificate is issued by the Council following a physical inspection of the property.
From a sellers point of view, the benefit of having this Certificate which can be inserted in the Contract for sale, gives the buyers certainty when they make an offer. They can bid with confidence knowing that the property complies with Council requirements.
Certainty and confidence from the buyers end, will in most cases achieve a higher sales price for the seller.
Definitely something to consider when selling. Always obtain quality legal advice from experienced professionals in property law before you sell.
Dean Carver
Property Lawyer + Real Estate Strategist
Solicitors Property Centre - Sydney
The uncertainty as to whether the property complies with Council rules and regulations can have an effect on the price, and in fact, scare buyers from making an offer.
If you are considering selling your home and you have made renovations or additions to the property, I would definitely advise that you obtain a Survey and Building Certificate from the Council which can alleviate buyers concerns. In a nutshell, a Building Certificate is a Certificate issued by the Local Council that says that the property currently complies with all rules and regulations set by the Council.
This type of Certificate is issued by the Council following a physical inspection of the property.
From a sellers point of view, the benefit of having this Certificate which can be inserted in the Contract for sale, gives the buyers certainty when they make an offer. They can bid with confidence knowing that the property complies with Council requirements.
Certainty and confidence from the buyers end, will in most cases achieve a higher sales price for the seller.
Definitely something to consider when selling. Always obtain quality legal advice from experienced professionals in property law before you sell.
Dean Carver
Property Lawyer + Real Estate Strategist
Solicitors Property Centre - Sydney
Monday, February 1, 2010
Homebuyers now using credit cards to pay for the mortgage
A recent article in the Daily Telegraph has revealed that first homeowners that have taken advantage of the first home benefits offered by the Government are now under "mortgage stress".
The articles says
"Just weeks after the grant was officially withdrawn, a survey of more than 26,000 borrowers conducted by Fujitsu Consulting revealed that 45 per cent of first-home owners who entered the market during the past 18 months are now experiencing "mortgage stress" or "severe mortgage stress"."
The Survey further revealed that thousands of homebuyers are using their credit cards just to meet mortgage repayments.
In my opinion, at some stage this will all come to a head and the credit card will reach its limit. With rising interest rates this can only mean more properties coming onto the market for sale.
Further, with Banks tightening their lending criteria, we may see real estate prices fall and at best remian "subdued" for at least 12 to 18 months.
To read the article click below
http://www.dailytelegraph.com.au/news/no-hope-for-aussie-homebuyers-as-thousands-struggle-to-foot-the-mortgage-bill/story-e6freuy9-1225825025688
Time for caution.....
Opinion by Dean Carver
Solicitor
Solicitors Property Centre - Sydney
The articles says
"Just weeks after the grant was officially withdrawn, a survey of more than 26,000 borrowers conducted by Fujitsu Consulting revealed that 45 per cent of first-home owners who entered the market during the past 18 months are now experiencing "mortgage stress" or "severe mortgage stress"."
The Survey further revealed that thousands of homebuyers are using their credit cards just to meet mortgage repayments.
In my opinion, at some stage this will all come to a head and the credit card will reach its limit. With rising interest rates this can only mean more properties coming onto the market for sale.
Further, with Banks tightening their lending criteria, we may see real estate prices fall and at best remian "subdued" for at least 12 to 18 months.
To read the article click below
http://www.dailytelegraph.com.au/news/no-hope-for-aussie-homebuyers-as-thousands-struggle-to-foot-the-mortgage-bill/story-e6freuy9-1225825025688
Time for caution.....
Opinion by Dean Carver
Solicitor
Solicitors Property Centre - Sydney
Friday, January 22, 2010
Banks are now making harder to get a loan
Westpac Bank has recently changed its lending policy making it harder to get a loan to purchase a first home. Westpac has effectively changed its policy to ensure that borrowers provide more deposit towards the purchase.
Westpac has advised its Brokers that new customers will not secure a loan unless they can meet a loan to value ratio of 87%, instead of the former 92%.
Under a RAMS loan, the rules are tougher. A borrower must meet a loan to value ratio of 85%.
Changes to lending policy will make it tougher for borrowers to get into the market. Essentially, homebuyers will need to save a bigger deposit to be able to purchase. We will wait to see whether all the other major lenders also change their policy.
For the full story, click the link below
http://www.news.com.au/money/property/westpac-requires-higher-deposit-for-first-home-loans/story-e6frfmd0-1225822160592
If you are looking for guidance and assistance in the property market, I can be contacted below
Dean Carver
Solicitor
Solicitors Property Centre
http://www.spc.net.au/
Westpac has advised its Brokers that new customers will not secure a loan unless they can meet a loan to value ratio of 87%, instead of the former 92%.
Under a RAMS loan, the rules are tougher. A borrower must meet a loan to value ratio of 85%.
Changes to lending policy will make it tougher for borrowers to get into the market. Essentially, homebuyers will need to save a bigger deposit to be able to purchase. We will wait to see whether all the other major lenders also change their policy.
For the full story, click the link below
http://www.news.com.au/money/property/westpac-requires-higher-deposit-for-first-home-loans/story-e6frfmd0-1225822160592
If you are looking for guidance and assistance in the property market, I can be contacted below
Dean Carver
Solicitor
Solicitors Property Centre
http://www.spc.net.au/
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