The Darwin Festival has finished up. Father’s Day is just past. We are visiting family Benalla in rural Victoria (Brrrrr) and arranging for some renovations to our 90 year old investment property at the same time.
What are the steps in getting a home loan?
Here is a possible overview of the steps involved in purchasing a home.
The steps are:
- You contact a Mortgage Broker who assesses your borrowing capacity.
- Your broker selects a short list of suitable lenders and loan types.
- A discussion of the pros and cons is held.
- A pre-approval is applied for (or not if you are ready to go).
- You engage a conveyancer.
- A suitable property is found, you pay a deposit to a trust fund.
- The terms of the contract are established, a subject to finance clause is included, the timelines to settlement are decided on. Inspections are selected.
- The valuation gets done.
- We send in the Contract and Valuation to the lender.
- The lender assesses and asks questions.
- We respond to those questions.
- Loan offer gets sent to you.
- We tell your conveyancer to go unconditional.
- The bank sets up the account(s) required.
- You transfer the remainder of required funds to your new bank account.
- The legal people book settlement.
- Your conveyancer comes back with all costs statement (but we are close by estimate)
- Settlement happens and you get the keys.
Serviceability Updates
We are seeing major lenders follow second-tier lenders by lowering their assessment rates, so there is some relief on how much you can borrow. Borrowers who are in “mortgage prison”, unable to refinance due to assessment buffers at interest rate plus 3% have an opportunity to be assessed at interest rate plus 1% for a refinance.
More information on serviceability here: https://arafin.com.au/serviceability
Interest Rates, where to now?
The RBA kept the cash rate unchanged at 4.10% on Tuesday 5th September 2023. This is the fourth time in the last 16 meetings that the cash rate has not gone up.
I am receiving many refinance enquiries as borrowers look to ease the pressure on the family budgets.
Property values and other statistics
Darwin property values have increased by .8% during the last month. This result is ahead of Melbourne, Hobart and Canberra. This month units are doing better than houses.
According to CoreLogic the last 12 months show Darwin property values as a fall of 1.3%. This result sits behind Sydney and Perth, but ahead of the rest.
Palmerston and Darwin City have again outpaced the Northern Suburbs.
Darwin is the cheapest capital to buy property in with a median value of $498,000.
Property Investment
If rural Victoria is your investment location of choice certainly Benalla has some bargains at the moment. There is a lot of discontent amongst the local builders, investors and tradespeople as the rules get changed. For example, gas is now considered not suitable and artificial prices rises in supply will force people to convert their homes to electricity. There is no compensation so for many home owners and tenants costs will rise.
Rents in Darwin have softened. Darwin and the wider NT are leading the pack on gross rental yields.
Nationally the rental vacancy rate is 1.6% which is half the average.
Read the CoreLogic Research in full here: https://content.corelogic.com.au/e/994732/m-campaign-au-res-hvi-2023-sep/zbct6/722423054
Please don’t hesitate to contact me should you have an enquiry.
Regards,