Atlanta mortgage and refinance lender

The credit crunch has not been felt as strongly in Australia than most western countries. One reason for this is the regulatory controls in place that shielded the property market from predatory and unscrupulous lending.

Australia hasn’t completely dodged the GFC bullet, although it has emerged relatively unscathed. How the property market will recover though, is up for debate. There is some consensus amongst Mortgage Brokers that property prices will fall slightly over the next two years. At the very least, most analysts agree that prices are not heading north.

It is likely that Australia will not escape the GFC completely unscathed due to household debt levels. In reference to debt, the main issue that is facing the majority of Australian households is that the debt levels are at record highs. In a property market where housing prices are rising, the number of eligible buyers may drastically fall as people are financially unable to take on any more debt such as Mortgages.

Employment is a very strong factor in whether the Australian property market will rise or fall. The mining boom in Queensland and Western Australia has been propping up the labour market. Regardless of this, many employers are cutting back on the number of full time staff they employ in order to save costs. If the economy does not begin to strengthen, more business will have to move to measures such as this, in addition to redundancies and lay-offs.

The global economy, but specifically the economies of the US and China, needs to strengthen in order for the world to come back to financial order. Many countries are introducing stimulus plans to help revitalize their country, get spending under control, and to help bring financial strength back to their currencies. While the Australian property market will not feel the immediate affects of a strengthening US or Chinese economy, the medium term affects will help to maintain or increase property values.

Other factors that can impact the Australian property market include interest rates and repossession rates. Some lenders are helping customers in financial distress to keep their homes by offering concessions. If banks repossess a majority of homes and hold on their books a large amount of overvalued, non-saleable stock, the market will surely fall.

So far, the Australian housing market has fared well. If employment can continue and the stimulus packages of other countries begin to kick in, the property market will remain strong. Although significant rises in the Australian property market should not be expected, a modest increase next year should be an attainable goal.

Welcome to the third article in the series of articles on Australian mortgages. These articles intend to provide you with some Mortgage News and information that can help you decide which home loan is best for you. We will continue the series by providing information on various home loan products available today.

Lines of Credit

Mortgage lenders have been getting more inventive with their products recently in the hope of attracting more customers. A popular flexible product that has emerged from this competitiveness is the line of credit mortgage.

This type of product can best be described as a credit card with a lower interest rate secured against your home. It will have an interest rate similar to those of other mortgages. This is in contrast to rates offered on other credit products, such as credit cards and personal loans, which can be quite high.

A line of credit home loan allows for great flexibility. Borrowers can make over payments whenever they like. You can also draw down on funds you have previously paid off if you choose to. This can be done up to an agreed upper limit, which will be calculated against the value of your home.

Borrowers can have their income paid directly into the Mortgage By doing this the you can reduce the amount of interest payable and save money. Disciplined borrowers could save a large amount of money over time if they did not draw down on their loan at all. This is because every unused dollar earned would sit against the home loan each day instead of sitting in a savings account.

Home owners who are looking for maximum flexibility with their home loans have flocked to line of credit mortgages, making them a popular product.

Professional Package Mortgages

For borrowers who have lots of different loan products and would like to save some money, a professional package might be the answer. Professional packages allow you to group together your mortgage and other loan products in order to save on fees and interest.

Lenders benefit from these packages by making sure you have as many loan products as possible with them and not their competitors. For this reason they are willing to offer discounts on interest rates and fees if you take out a professional package.

Home loans within professional packages usually come with flexible options such as draw down facilities and offset accounts.

Professional packages usually come with a hefty annual fee. There will usually only be one fee and it will cover all products in the package. The savings made through reduced interest and fees payable therefore need to be more than the cost of the annual fee payable, otherwise it is not worth taking out the package.

You should therefore weight up the benefits against the costs of professional packages before signing up. You might be better off with separate loan products or a line of credit on your home. Be sure to do your due diligence before applying for a package deal.

Mortgage brokers have seen a steady increase in their chosen profession in Australia over the past decade. The profession has grown considerably since the early 1990s and there are now thousands of brokers operating Down Under.

The exact role of mortgage brokers in Australia, however, is unclear to many people despite the large size of the industry. This is partly because of the domination of the four main banks, known as the Four Pillars. These four banks are the National Australia Bank, the Australia and New Zealand Bank, Westpac, and the Commonwealth Bank. These four big banks have dominated the mortgage market in Australia for many years, which has contributed to a lack of understanding of the intermediary market.

In the 1980s, the financial system was deregulated, allowing the opportunity for many changes to occur. While some of these lenders, namely smaller banks and building societies, already had an established network of branches through which they could sell their home loan products, other did not. The independent Mortgage broker profession emerged to fill the gap and become the sales force for non-bank lenders that did not have a branch network available to them.

The role of Mortgage Broker in Australia is therefore to offer home loan products from a variety of lenders that would otherwise not be able to market their products to the general public. Because they are independent of any one lender, intermediaries are able to offer a wider selection of products than advisers from one of the Four Pillars banks. These banks, by their very nature, are only able to offer their clients their own products.

Independent mortgage brokers often operate under the umbrella of an aggregator or a master franchise. Franchising is popular in Australia and the mortgage industry is awash with franchises that also operate as aggregators. This business structure ensures that the franchisees belong to a group that will have access to a wider range of lenders than an individual broker working alone could manage. Aggregators usually also offer training and support to their franchisees, helping ensure they remain professional and knowledgeable throughout their careers.

There are also several professional bodies governing Mortgage Broker in Australia. They are called the MFAA and the FBAA. Both of these bodies help to maintain professionalism within the industry by enforcing a code of conduct and taking disciplinary action where required. Brokers who operate in an unscrupulous manner are kicked out of the industry.

In the wake of the credit crunch the Australian government has decreed that national regulation of the financial services industry is required. Previously each state has been responsible for such regulation. The national regulatory scheme will affect mortgage brokers and will help keep the integrity of the industry in tact as it will make it even more difficult for unscrupulous brokers to operate.

One of the best careers to have in Australia is that of a Mortgage Broker because it is so rewarding. Mortgage brokers can make a lot of money during their career, as well as experience the joy of helping people buy their homes.

While there is no typical background of a mortgage broker, the job isn’t suited to everyone. The variety of different backgrounds is a result of their being no strict entry requirements such as having a university degree. Of course there are some entry requirements, such as passing a certificate level qualification before entering the industry, and a minimum level of ongoing training also must be maintained.

All Mortgage brokers must complete a Certificate 4 in Financial Services (Finance/Mortgage lending FNS40804) before getting a license to operate in the industry. There are many different education institutions that offer this course and it can be conducted by distance learning if face-to-face is too difficult to organise. Although distance learning is an option it is recommended that prospective brokers with no industry experience undergo the training in person. This will allow the student to ask questions of their instructor and receive extra attention on any concepts that are difficult to grasp.

Once the Certificate is completed the individual will be required to join an industry association. The two options are the Mortgage and Finance Association of Australia (MFAA) and the Finance Brokers Association of Australia (FBAA). The MFAA has been known by several different names, including the MIAA. Brokers are only required to join one association and both require the Certificate 4 to be completed before joining. Additionally, there is Federal legislation currently being introduced that will make it a legal requirement for all mortgage brokers in Australia to complete the Certificate.

In addition to the minimum academic requirements it is recommended that prospective brokers contain several personal qualities that will help them succeed in the industry. A basic grasp of mathematics is required to accurately assess the suitability of the finance products that the broker will advise their clients on. There is also a lot of paperwork to complete so good language skills are also a must.

Sales skills can also be extremely helpful as most of an independent mortgage broker’s money is made via commissions on sales completed. It is also essential to be self-motivated and well organised, especially if conducting business in a self-employed capacity. A Mortgage Broker must also be highly organised as the home loan process can be complicated and there are a lot of parties involved in each mortgage case.

Once a broker has completed their initial training and gained some experience they will be required to complete further education. This is known as CPD (Continued Professional Development). Various training institutions offer courses that count towards CPD requirements. Additional skills and qualifications can also be gained from completing CPD which could allow the mortgage broker to diversify into areas such as financial planning or commercial lending.