Category Archives: Uncategorized

What Is Bad Credit?

When it comes to impaired credit, there are many kinds; the main ones include:

• Bad Credit History – Negative marks like bankruptcy, defaults, court writs, judgments and an excessive amount of credit enquiries could lead to mistrust in your loan application.

• Mortgage Arrears – If you’ve missed payments on a home loan, it could call into question your stability. The more missed payments you have in the last six months, the more apprehensive lenders are going to be. In essence, major banks and 2^nd tier banks/lenders are not liable to refinance a loan, even if you missed one repayment.

• Unpaid Taxes or Bills – Having unpaid bills or even tax bills may not appear on your credit file but may be seen on any provided documents you give. 

• Lender Credit History – your previous credit history with the lender you’re applying with will also be looked at. If you’ve had trouble with a lender previously, even if it’s years ago, they’re going to remember it.

• Too Many Commitments – If you’ve got an excessive number of debts for your income or the total amount of assets is less than the total number of liabilities, major banks and other lenders may consider you beyond help.

• Financial Business Problems – If your company is in dire financial straits, such as liquidation or receivership, it can hurt your chances of getting a loan.

A Look at Non-Conforming Lenders

When it comes to getting loans from a non-conforming lender, they are considered much more flexible than traditional banks. The offered interest rates are generally reflective of the risk the lender takes. If your loan is considered highly risky, the interest rate will generally be higher.

Non-conforming lenders will take a look at each individual home loan application, listening to your story as to what happened and why you’re looking for debt relief or finance.  Many of these lenders will often quickly approve the loans to meet creditors’ deadlines.

• If you’re asking for 80 percent or less of the home’s property value, you could attain a lower interest rate
• People who need to borrow more than 80 percent or who have really bad credit can expect a higher interest rate

Who Would Qualify as a Non-Conforming Lender

There are a multitude of non-conforming lenders who can assist borrowers in being approved for a home loan even if they have negative marks on their credit report. Some non-conforming lenders include:

• Liberty Financial
• Bluestone Mortgages
• Resimac
• Pepper Home Loans
• Adelaide Bank
• La Trobe Financial

Over the years we have forged excellent working relationships with the Lender noted above and some other niche non-conforming lenders with an appetite for bad credit loans.

With non-conforming loans the devil is in the detail and you should always consult with a specialist mortgage broker who understands the lenders credit policy and can package and present your loan application in the best possible light to the lender.  The team at Sherlock are experts when it comes to bad credit loans with over 10 years experience in the field. Feel free to contact us today to discuss your bad credit lending options.

Use These Strategies and Avoid Common Money Mistakes in Your 40s

Your 40s can be a challenging financial time. However, you can take steps to avoid the common money mistakes that create challenges with your personal finances.

Follow these strategies:

1. Plan with liquidity in mind. How much of your portfolio is accessible in liquid assets? Liquid assets refer to cash or investments that can be easily turned into cash.

• During an emergency, you may need fast access to cash. In your 40s, emergencies can include a family member’s unexpected trip to a doctor that isn’t covered by insurance. They can also include an unexpected breakdown at home or at work. How will you pay for these items?

• You want to avoid being in a financial situation that forces you to sell your belongings or get loans because you need cash. Evaluate your portfolio and ensure you have enough cash to handle a variety of emergencies.

2. Balance your payments. It’s important to have a balance of payments, so you’re not spending too much in one area. Trying to pay off the entire mortgage too soon is a common money mistake. It’s tempting to put extra payments toward the house, but other areas may need to be examined.

• Are you trying to pay off your mortgage while a pile of credit card bills sits on your desk? Although it’s a good feeling to own your home, paying off the mortgage shouldn’t be the only goal.

• Extra mortgage payments can wait in many instances, so you can focus on higher interest debt such as credit cards, and other types of loans. In addition, it’s important to be contributing toward your retirement during your 40s so you give your money time to grow. Also, consider your children’s university fees.

3. Focus on retirement. In your 40s, it’s easy to expect that you can continue to work for several more decades before retirement. However, your retirement savings need to be a priority.

• Retirement savings work best as a long-term goal. Your 40s are an ideal time to build your investments.

• You may want to avoid the common money mistake of taking out cash from your retirement savings. In addition to penalties and fees, you’re reducing the portfolio’s ability to grow.

• If you take money out of your retirement funds, you may also face large penalties during tax time.

4. Consider your job security. During your 40s, it’s easy to become complacent about your job.

• It’s important to pay attention to your company’s culture and consider job security. Are you watching older workers being pushed out for the younger generation? Are older workers in the same field struggling to find replacement jobs?

• Job security can affect every aspect of your financial life. It’s also important to consider your income. Do you expect it to rise, or is it at a stable level? In your 40s, you may expect income to continue to rise, but experts share that this may not always be the case. It’s wiser to avoid the money mistake of spending too much because of hopes for a raise.

If you’re in your 40s, be aware of these common money mistakes and protect your financial future. This is a perfect time to strengthen your financial foundation at home and at work.

Finding a bargain investment property on paper is only half of the process of property investment. The other half of real estate investing is going down to the property to examine the real estate investment property physically for defects either in terms of the construction and legal title and other liens that can be on the property. You do not want to spend lots of legal costs later to undo the bad lemon you bought into. This article will highlight five possible things to consider when searching for your next investment property.

1. Unless you find a property that is really run down and you want to tear it down to its foundations, you want to look out for properties that might have potential electrical and plumbing problems. The reason why this is critical is that, wiring and plumbing is usually hidden behind walls and other furniture fixtures and repairing them can be a very costly affair since you have to hack into the walls and run the piping and wiring if the problem is very serious. If you are new to property investing try to bring an electrician along with you when you are doing the property inspection.

2. Foundation problems are usually harder to spot. When walking around the property, look for cracks appearing at the side of the house and the foundation that goes into the ground. Look for large unusual holes found at the side of the property and cracks on the exterior paint of the building. You might want to bring builder/carpenter and a contractor along to figure out how much it would cost to fix the property if you suspect the repairs involved will be substantial. You can also bring them along to give a “grim estimate” to the house owner and bring down the cost of the property.

3. Roofing problems can be a persistent nightmare to you and your potential tenant if you are purchasing the real estate for tenancy purposes. When inspecting the house, look around the ceiling near the windows and around the edges of the walls to look for new paint or yellow spots or cracks with water in them. Most sellers would be smart enough to eliminate the water bubbles after a heavy rain when trying to sell the property, but it is always important to figure out if there is a major leaking roof which might cost you are lot to repair it. Use this defect to negotiate the price of the property.

4. Another reason why the investment property in question might be a bargain might be because there are legal problems associated with it. Common ones include, multiple owners that cannot agree whether to sell or not. Litigation here would be futile and you should avoid such a property once you learn about it.

5. Bankruptcy of your seller or one of the part owners of the property, depending on the legal proceedings of your state, may affect your ability to transfer title quickly. Most states make it a requirement that the receiver of the bankrupt has to agree so pay careful attention to the bankruptcy legislation of your state. That being said, sometimes you can snag a bargain quickly so do your homework before purchasing such an investment property.

In conclusion, these five pointers can be used as a starting point for you to evaluate your property investment. Spend some time to think rationally about the properties that you have seen and see if they have any of the above flaws and consider if you want to continue purchasing them and whether the costs that you may incur in fixing them will justify the discount of the property to the market value.

.

The role of a Mortgage Broker, or Finance Broker is one of many careers in the finance industry that are available today, where intelligent, savvy, capable individuals have an opportunity to succeed. If you’re willing to study, work hard, and be a person of integrity, it may be a career that fits you.

In this post I want to highlight 3 benefits that I’ve experienced in my over 10 years in this industry. Others lists may vary, but I think you’ll agree that these 3 are among the top reasons to consider if you want to become a mortgage broker.

ABOVE AVERAGE INCOME POTENTIAL

The average upfront commission a loan officer will make is 0.66% on every home loan they settle. That’s a rate that has been pretty much standardised throughout the industry, however some lenders pay higher, some slightly lower. In addition there are commissions to be earned from other types of finance such as commercial loans, car loans, asset loan etc, However for the purposes of this report we will focus on residential mortgages. Let’s do the math to see what 0.66% means in real dollars:

 $500,000 loan X 0.66% = $3300

That’s $3300 earned on one loan. For many people, that is one month’s income.

Let’s carry it out over a year, and say you settled 3 loans per month (at the above loan amount) for 12 months (which is an extremely low estimate), and you’ve made $118,800 (on the low end) in one year. But like I said, that’s a low estimate. Most mortgage brokers settle anywhere from 4 to 8 loans per month, with some of the “superstars” doing many many more.

But that is not the most unique and financially lucrative aspect to mortgage broking in my opinion.

Most lenders also pay a trailing commission on each loan you settle.  And the average trailing commission across the industry is 0.22%. And this trailing income, naturally, compounds every month that you settle new business. Now if we take that and extrapolate it across the 3 loans per month we have just settled the following magic highlighted in this chart below occurs:

What you are looking at here is the compounding trailing income you would be paid every month for the loans you have settled.  That’s passive income, in your bank account for the life of the loan.  Now bear in mind, you are paid this on the balance of the loans, so as they reduce, are paid out and/or refinanced elsewhere, this will cease, however if you are consistently settling new loan business it should account for any run-off.

As mentioned before, this is an extremely conservative example of the potential income that could be generated based on monthly loan settlements totalling $1..5million.  Most brokers would generally settle on the low end a minimum of $2million per month and on the high end $15-$20million per month.  You do the sums!

FLEXIBLE SCHEDULE / LIFESTYLE

I hesitate to list this one because its’ one of those things that “depends.” It depends on you. You can work from an office, you can work from home, you can work from pretty much anywhere.  How hard you work, and subsequently how much money you make, is entirely up to you and how you manage and market your services.

I’ve found the flexibility of having both a satellite office in the Melbourne CBD as well as a home office in regional Victoria affords me the perfect balance for the kind of life that I want to live. I’m able to be at home with my family, but can work at something that is adequate for providing the income we need. Because of technology, I’m able to use the very same tools I’d have were I in the CBD office all the time (which I am not), and do it from the comfort of my home when required.

DOING SOMETHING THAT MATTERS

Most people want to own a home… it’s part of the dream that we have as adults. The Mortgage Broker has the opportunity to help people accomplish that dream by providing them with options that fit their situation. The work I do really matters because it enables people to get into one of the greatest investments of their lifetime, when it’s done wisely and well.

I love knowing that the work I’m doing is truly benefiting people.

How do you know if you want to become a mortgage broker and that the mortgage industry is for you? From my experience I’d suggest you check it out if:

• Integrity matters to you
• You want to help people with important matters
• You are organised and willing to work hard
• You don’t mind rules and regulations (there are a few of them)
• You enjoy learning and challenging yourself
• You are a people person

If you think you have what it takes to become a mortgage broker, contact us today to see how we can assist you in doing so. We currently have 2 vacancies available.

Don’t forget to Like us on Facebook for regular news, updates and offers!

Low Doc Loans are facilities offered by lenders to specifically meet the requirements and accommodate the needs of self-employed borrowers. Generally Low Doc loans require alternative income verification which includes but is not limited to a self-certification of income by the borrower, an accountants letter, bank/trading statements and/or BAS statements. The requirements vary between lenders and generally combine 2 or more of the above low doc documentation. Often self-employed borrowers do not have current up to date full financials,
and a Low Doc loan provides a great alternative to low doc borrowers enabling them to achieve their lending requirements with minimal fuss.

Low Doc loans can be used to purchase a home for owner occupation, an investment property for residential rent and also purchase commercial property for occupation and/or lease. Similarly, there are many low Doc loan facilities available whereby borrowers can purchase and or refinance motor vehicles, plant & equipment, fund a business for expansion or growth, fund a shop fit out – the list goes on.

In many ways, depending on the overall loan product structure, often a low Doc loans can be comparatively better than a secured secured business loan – most of which are historically secured by a borrowers principal place of residence. The availability of low doc loans in the commercial asset space allows the actual
asset to provide the security for the low doc facility – thus allowing the borrowers to keep their business and personal assets separate. This is a good strategy for both asset protection purposes as well as for taxation purposes.

In many cases, low Doc loans are very similar to a fully verified home loan in respect of the features available to low doc borrowers under these facilities. Self-employed borrowers have in most cases a choice of fixed or variable rate options with low doc loans. It is extremely advisable that if you are considering a low doc loan you seek the advice and assistance of a low doc loan specialist and this is a very niche section of the lending market and one in which low doc specialist brokers are far better placed to assist you adequately with your low doc loan
requirements.

Low doc loans often feature a slightly higher interest rate but as you are not required to furnish the lenders with as much documentation as you would with a fully verified loan, the speed and ease with which these low doc loans can be processed more than compensates for the variance in interest rate. In addition, some low doc facilities are as competitive if not more so than fully verified loan products. Without any doubt, low doc loans provide and invaluable and essential
service for self-employed borrowers.