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
