For example, with the Borrowing Power calculator,you can calculate how much money you can borrow based on your financial circumstances.

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The country’s second-biggest lender by market value said it would raise its rates by 15 basis points to 9.61 per cent.

NAB Australia chief executive Ahmed Fahour said the change reflects sustained increases in long-term wholesale funding costs due to the fallout from the global credit crunch.

“Australian banks continue to witness significant increases in funding costs,” Mr Fahour said.

“This has been made more acute by the industry’s increased reliance on international funding to meet demand for credit.

“While this change still does not recoup the full impact of increased wholesale funding costs, we have a responsibility to balance the needs of customers and shareholders.”

Economists have said moves by Australian lenders to raise rates outside moves by the Reserve Bank ease pressure on the central bank to consider further official cash rate hikes.

Last week, ANZ increased its variable mortgage rate by 15 basis points, and Commonwealth Bank of Australia raised its rate by 14 basis points. Two weeks ago, St George lifted its rates by 20 basis points.

Written By: Lyndal McFarland, Dow Jones Newswires | July 14, 2008

Source: http://www.theaustralian.news.com.au

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This is a fully flexible loan that usually allows additional repayments without penalty and often comes with extras such as a redraw facility or offset account. The interest rate is variable which means that it can go up or down depending on the bank. It also possible to split this type of loan with a fixed interest rate, allowing you more flexibility should an interest rate rise occur.

Basic Variable Rate Home Loan

Similar to the standard variable rate home loan but usually doesn’t come with any extras. Also, there may be penalties for making additional repayments. However, the best thing about this type of loan is that it comes with a significant discount off the interest rate. If you intend to make a lot of additional repayments or pay the loan off early, then this loan is probably not best suited to you.

Fixed Rate Home Loan

This type of home loan has a fixed interest rate that can not go up or down even when the Reserve Bank increases or decreases their rates. The fixed period is usually for 1 to 5 years but some major banks offer a fixed rate loan up to 15 years. If you are on a strict budget and can not afford an interest rate rise, then a fixed rate home loan can certainly save you from potentially losing your home should consecutive interest rate rises occur like they have over the past couple of years.

Professional Package Home Loan

Despite the name, the Pro Pack home loan is not just for professionals. Just about anyone can qualify for a professional package mortgage. There is usually a minimum loan amount that you must borrow to be eligible and there is an annual fee that has to be paid each year. A professional package home loan is fully flexible and comes with many extras that may include a redraw or offset account, credit card, nil monthly transaction fees, and a lifetime discount off the interest rate.

100% Offset Account

This is a savings account that is linked to your mortgage. Any balance in your savings account offsets the amount of interest you pay on your mortgage. Your salary can be paid directly into this account which minimizes the amount of your monthly interest.

Non-Conforming Home Loan

A non-conforming home loan is for people who do not meet a bank’s traditional lending requirements. You may need a non-conforming mortgage depending on your work situation, your past credit history, the security property you intend to purchase or refinance, or your residence status.

Low Documentation Home Loan

A low doc home loan is usually for self employed people who do not wish to or can not substantiate the amount of their income. There are however, low doc PAYG home loans now, for people who earn a PAYG income but can not substantiate or prove it.

Bridging Loan

This is finance that is arranged if you are selling your existing home and wish to make a new purchase prior to the settlement of your existing property. The loan can be for up to 12 months and is usually interest only.

Line of Credit

This type of loan is when a lender approves a set credit limit that is secured against your property. The borrower is able to draw down as much funds that they need up to the approved credit limit and they will only get charged interest on the amount that is drawn. The interest rate is usually a little higher than normal home loans.

No Deposit Home Loan

This type of home loan usually appeals to first home buyers who have access to the First Home Owners Grant, however many property investors have been utilizing this type of loan so that they do not have to access their available funds. The lender will normally lend up to 97% plus LMI (Lenders Mortgage Insurance) which brings the total lend up to 100%. The customer still needs to come up with a 3% deposit plus Government fees, stamp duty and bank charges, but this can often be covered with the help of the First Home Buyers Grant or a personal loan.

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Because the bank or mortgage lender owns the title of the home, they have the power to seize the house if the mortgage payments fall behind. Foreclosure laws are specific for each area, however, with state laws determining the timeframe of a foreclosure. It normally takes several missed payments before foreclosure proceedings begin.

A mortgage payment is a mixture of the principle, which is a portion of the original loan amount, and the interest due on that payment. There may also be money added into the payment that goes toward escrow accounts for the property taxes and the homeowners insurance. These amounts are placed into escrow and sent directly to the county and the insurance agent to ensure that they are pain in full and on time.

Interest paid on a mortgage is often paid disproportionately toward the beginning of a mortgage. This means that more of the mortgage payment is made up of interest at the beginning of the loan than it is at the end of the loan. Very little of the loan principle is paid during the first two years of most mortgages. To pay off the principle more quickly, many homeowners choose to pay extra money on top of the mortgage payment and directing the extra amount toward paying off the principle.

The mortgage begins when the loan is approved by a bank or other mortgage lender. The terms for the mortgage, including the amount and the number of years until it’s paid off, are spelled out in a series of legal documents that must be signed by both parties. Most mortgages last for 15, 25 or 30 years. The payments will be paid each month during those years, with the title granted to the homeowner at the end of them.

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Have a Down Payment

A down payment demonstrates your seriousness about the home. If you have a large down payment, it can make up for some poor credit because if the bank forecloses, they are still coming out ahead. Though there are some no-down-payment mortgages available, most lenders require anywhere from 3 to 20 percent of the total price of the home.

Financial History

Most mortgages require a thorough review of your credit. This will include your credit history as well as your credit score. Credit doesn’t have to be perfect, but it does have to be mostly positive information. If you don’t have any credit history, get a car loan or a few credit cards and establish a history of paying on time before applying for a mortgage. If you have any unpaid debts, pay them as quickly as possible. Check your credit report for any debts you may not have been aware of.

Your Income

You will need to have an income that is 2-3 times your expected mortgage payment. Use an online mortgage calculator to find out what your payment will be. In addition, you should have held your current job for at least two years. Some lenders are flexible on this point as long as you have been working in the same field for that length of time.

Other Mortgages Available

There are other mortgages on the market for people who don’t meet these requirements, but there is a steep price to pay for them. The interest rates and fees are usually much higher for these loans. Some loans don’t require any verification of your income or your employment history, but you will still have to have a good credit history.

If you have trouble finding a bank that will give you a mortgage, look for a mortgage broker to help. A mortgage broker, in return for a fee, finds mortgages from among dozens of lenders- or more. This can be extremely helpful in finding a loan when your credit is less than optimal or you anticipate trouble with getting a mortgage loan.

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To buy a foreclosure, you first have to find a foreclosure. To do this, you can track local foreclosures online through a foreclosure properties website. These sites keep their foreclosure listings updated with the newest foreclosure properties on the market. These sites usually have a membership fee, but they allow for customization so that you are notified about the new foreclosures in the area you specify.

Another way to find foreclosures is to find out your state’s foreclosure proceedings. In some states, these homes are auctioned off in a specific area, such as the local courthouse steps or a particular courtroom. You can then check with the county for the latest auction times. To get an earlier look at the newest foreclosures; look at the legal notices in your local newspaper. These may not tell you when and where the auction will be, but they will tell you what properties are being foreclosed on. This gives you a head start in researching the property and deciding whether it’s something you are interesting in buying.

Know the purchasing rules before you buy. If you are buying at auction, you may have to pay the entire purchase price within a set period of time, such as 10 days. You may also find that the foreclosure properties don’t come with any warranties. Make sure to find out about the property’s condition before purchasing. Attempt to find out whether the home has termites, fire damage or lead paint that will eat into your profits to fix.

When bidding for a foreclosure, make sure not to get too carried away. The excitement of a property auction can lead to bids that are too close to the value of the property, or even more than that value. This destroys the potential for a resell profit. Decide in advance how much you are willing to spend on the property, and how much you can spend to maintain profitability, and bid only up to that amount.

Why not consult a Mortgage Broker in Australia?

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The first type of home loan is the basic home loan. This is a variable loan rate with no “extras.” Your monthly payment is based on the interest rates. If interest rates fall, so will your payment amount. The good thing about this type of loan is that you can choose to pay the higher monthly payment when the interest rates fall and pay off your loan faster. Just make sure that you can afford to pay a higher monthly payment if the interest rates rise. You also need to make sure that this type of loan has no penalty for additional repayments or for paying the loan off early.

The next type of home loans in Australia is the standard variable rate loan. This is much like the basic home loan but with a few more options. If you choose a standard variable rate loan your payments will go up and down according to the interest rates. But there are no penalties for extra payments and you can split between fixed and variable rates.

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A good mortgage broker will keep the lines of communication open. He will not spring surprises on you at the last minute. You should know exactly how much your closing costs and fees will be. There should be a definite timeline on how long the whole process is going to take. If your mortgage broker cannot answer these questions, then it is time to look elsewhere.

The best mortgage brokers in Australia will not just try to sell you. He or she will have your best interest at heart. The best mortgage brokers will lay out the pro and cons of each option and will be honest with you during the whole process. If you feel like you are being pressured to make a specific decision, your mortgage broker is probably just selling you so that he or she can get the most from the deal.

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If you own a home in Australia, you may be wondering if refinancing your home is a good idea. There are plenty of reasons to refinance your home. Keep reading to determine if one of these reasons apply to you.

Refinancing your home in Australia is a good idea if you currently have an adjustable rate mortgage. Refinancing to a fixed rate mortgage will save you a lot of worry when the interests rates go up. Having an adjustable mortgage rate is a lot like playing the lottery, you never know what you are going to get. It is better to know what your house payments are going to be, than to be at the mercy of interest rates.

Another good reason to refinance your home in Australia is to get cash back from the equity of your home. Does your home need repair? Do you want to add on additional rooms or buy additional property? If you have owned your home for a number of years, you may have enough equity built up in your home to get a sizable amount of cash back. You can use this cash for anything that you want.

If you bought your house several years ago and you notice that the interest rates are a lot lower now, then refinancing your home loan is a good idea. Getting a lower interest rate can save you a ton of money over the life of the loan. It will also free up more money on a monthly basis.

It is a good idea to keep an eye on your credit score. If you credit score is much higher now than when you first acquired your home loan in Australia, then refinancing may be a good idea for you. If you refinance your home with a better credit score, you should be able to get a lower interest rate.

Maybe you or someone in your family has had some health problems and the bills are piling up. You could refinance your home to get cash back to pay your medical bills. You could also use the cash to pay off high interest credit cards. Imagine the worry that will be erased because you have paid off those nagging bills.

So as you can see there are a lot of good reasons for refinancing your home or property in Australia. Do your research and find a good mortgage broker. They should able to let you know if refinancing is right for you.

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