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How to improve your credit score

Here is a list of some quick tips to help you get the best possible credit score. While there is no guarantee that all of these options will immediately boost your credit score, they may help you establish habits that will strengthen your credit score.

Lenders/credit both Prime and Non Conforming Lenders will want to see that you can repay a home loan on time so they look at your current repayment history of bills that you should pay on time:

Your rent

Your credit cards

Your medical and utility bills and any other service that may use a collection agency for the recovery of delinquent accounts.

Check your credit report as it will:

Give you an idea if you have any defaults or negative repayments history recorded in your report. If this is the case you may require a Bad Credit Home Loan.

Give you time to get the credit report corrected before a lender/credit adviser accesses your report; and enable you to verify your credit score with a credit reporting agency.Note: Be aware that due to the changes in Positive Credit Rating legislation lenders have the ability to access your credit reports and can see the past 24 months of your repayment history.

Maintain your Available Credit

Before applying for a home loan don’t open any other credit cards or lines of credit. It is because lenders/credit providers will see you as being a risk if you suddenly take out loans for cars, electronics, furniture, etc.

Consider paying off your balances as a lower debt will improve your debt-to-credit ratio. This can be illustrated by the following example:

Having a total debt of $4,000 with a $20,000 available credit will look better than having just $500 in debt with $800 available credit.

Establish a Savings History

Your savings will need to add up to around 5 percent of the purchase price of the property if you need to show “Genuine Savings” which is generally required on mortgages above 85% with Prime Lenders.

Note: Saving a larger deposit should help to reduce or avoid paying “Lenders Mortgage Insurance” (LMI) and you may even be offered a more competitive interest rate by the lender/credit provider.

Avoid applying with too many Lenders/Credit Providers

Avoid submitting your home loan applications to several different lenders/credit providers at once. It is because these loan applications will appear on your credit report.

Your Employment Stability

If you have had the same job for more than two years, then this is a big tick. So, prior to applying for a home loan, try to establish a stable employment history as it will enable you to make regular loan repayments.

If you have changed your job recently, do not worry. You may satisfy the requirements of lenders/credit providers, if:

You have been in a similar role

You have been in the same industry.

Disclose all Information

Always be upfront with your lender or broker and disclose all information as non-disclosure of relevant information may result in your home loan application being declined.

Seek Expert and Professional Advice

All these tips should help you to improve your credit score. However, you should speak to a professionally qualified and expert mortgage broker who can help you to create a personalised credit improvement plan.

Rural Property Loans

Agriculture is a major sector for the Australian economy contributing 12% GDP. 307,000 people are employed in the sector that earns $155 billion-a-year. The numbers clearly show that agriculture is a big business and like every other owner of a huge business, farmers often have to seek quick and affordable finance.

Rural Funding Requirements

If you are looking at expanding your farm business, or just looking to better manage your business, here is a list of funding situations where you can use a Rural Property Loan:

You may be looking at buying a neighbouring property

You are a livestock producer looking to purchase vet supplies

You may want to increase your livestock numbers

You may need to buy cropping supplies (e.g. weed spray or fertiliser)

You are looking to purchase, upgrade or replace your farm or business equipment

You may need to meet your seasonal expenses

You would like to consolidate all your agriculture finance into one loan, making your finance simpler and more cost effective

You may need drought survival assistance

Summary of Rural Loan Options

Here is a list of agriculture loans that have been specifically designed by specialised lenders/credit providers to address the specific needs of your farming business. These loans are also more flexible than other loans:

Farm Term Loan: It is an ideal loan when you are considering capital improvement or purchasing property.

Livestock Finance: It is specifically designed to enable you to invest in your livestock breeding. The loan has flexible repayments that can suit you cash flow.

There are other Agriculture loan options available to you, and these are:

Private Rural Finance: The loan type will provide you with the required working capital to fund any short-term production costs and to cover any cash flow shortfalls.

Equipment Finance: The loan type provides you with the options to purchase, upgrade or replace your farm or business equipment. The options are either a finance lease, asset purchase or an equipment loan.

Why Contact a Finance Broker?

Farmers need specialised advice from experts who have the right industry experience as well as having a thorough knowledge of the changing economic and market conditions.

With interest rates on the rise in Australia, hunting down high-quality investment opportunities has never been more important.

While the vast majority of investors will always be drawn to residential property, savvy investors understand just how lucrative commercial property investing can be. With investors on the hunt for yield, and with the ongoing lack of supply of quality assets, demand for commercial property continues to be incredibly high.

For investors getting starting in Commercial Property it’s important to understand that it isn’t necessarily more complicated, it’s just different to buying a residential property. Here are some things you need to know when getting started in the market.

Higher deposits required on Commercial Property

Most residential property buyers would know that it’s very possible to purchase a property with LVRs of up to 90-95%. For commercial property, the reality is that you’re looking at an LVR of 65-75% with some banks potentially offering 80% loans.

This is because commercial property is deemed riskier in their eyes and their loan value ratio (LVR is lower). Where residential property can be purchased with as little as $50,000 as a deposit to cover all necessary costs, commercial on the other hand is $75,000-$100,000 as a minimum.

So what’s the drawcard? High-quality commercial property has the potential to pay itself off in 10 years, compared to the traditional 30 years a residential property might take.

That means all of that money usually going to the bank, after the debt is paid, then goes straight into your pocket, not to mention the fact that it opens up the possibility to leverage equity and purchase a second, third and fourth property. So the decision to pay a higher deposit in the beginning starts paying dividends immediately afterward.

Types of Low Doc Commercial Loans available in Australia

When you purchase a commercial property, unlike residential, you do not come under the same credit laws as Residential property loans. This allows for other options that are not available for Residential Properties.

Types of Loans:

Full Doc Commercial Property Loans: Where all income verification is required similar to a mortgage for a home loan is generally the lowest rate home loan.

Low Doc Commercial Loans: This is where either your Accountants verifies your income or you can use BAS Statements or Business Bank Statements to verify your income. This is only for Self Employed Applicants with registered ABN’s and in Business for 12 months or more.

Lease Doc Commercial Property Loans: Are designed for investors with rental producing commercial properties. The Lease Doc product is where servicing is established by income from a quality third party lease servicing the debt without the necessity to provide financials or tax returns or confirmation of other assets or other liabilities.

Private Commercial Loans: This type of loan is known as an asset lend or no doc loans because the lender is primarily relying on the value and sale ability of the security

Potentially longer vacancies, but, also for longer leases on Commercial Property

When a residential tenant signs a lease, they have a number of ways of getting out of it should they choose to leave. For a commercial tenant, the lease is far more stringent and as a result, it is a huge financial commitment for the tenant.

This is because the success of their business is very much at stake and the property will often play a key role in that success. This coupled with commercial property having increased exposure to economic cycles, and, managing the end of a lease – where you may be required to make repairs or undertake maintenance – all mean that you need to be prepared for longer vacancies if a tenant leaves.

The great news is that if you choose a high-quality commercial asset in high-demand, low-supply areas, you can easily mitigate this risk, as these will always be snapped up by tenants. If you purchase a commercial property in a poor location and the building is in disrepair, then of course the vacancy periods will be longer.

Investors need to carefully assess this relatability potential. Such factors include the quality of the building, the location, rent levels, interest repayments and the state of the general market around it.

Getting the due diligence right will help ensure that the property won’t stay vacant for long.

There is a little-known mortgage product that exists in the marketplace today, we call “The Simple Interest Mortgage”. Our most financially savoy borrowers today utilize this product to grow and safeguard their wealth. In fact, The Colorado Mortgage Team’s Mortgage Engineer Clinton Sistrunk, has his current property financed with it. With a traditional amortized loan, you have no access to the equity in your home, without refinancing or taking out a 2nd mortgage. When you pay extra on your home you do not save any interest unless, you term out the loan paying it off in full. That is because the interest is front loaded and every payment is set in stone upfront with how much goes towards interest and principal. Making payments early also does not save you any interest.

With a simple interest mortgage, you turn all these aspects upside down. Interest is calculated daily so if you make a payment early you save interest in real time. Paying extra also saves you interest immediately. It is also combined with a checking account so your equity is always liquid instead of being locked into your homes vault just like with a HELOC. This allows you to put idle money sitting in lower return vehicles like savings and checking accounts to work for you into your home. This also helps you pay it off quicker and reduces the total interest you pay. Interest is calculated daily and then added to the principal balance at months end. Plus, there is no escrow account so you can also keep that money in the home helping to keep down the loan balance, saving interest until taxes and insurance come due each year. The payment which they add to the principal balance each month is interest only.

This loan can act as a form of insurance during economic slowdowns. It does not require a payment in any given month as long as you have the equity in your property to cover the interest only payments each month. If things got really tight you could choose not to make a payment for months. You would never default or have a late payment. It acts as an emergency fund or source of capital for future needs like college, medical or taxes and wants like trips or vehicles. This is a 30-year loan so you never need to qualify again to access your equity. Even better, it becomes a retirement planning tool, as a possible reverse mortgage replacement option that you control and is extremely flexible. No need to ever refinance to capture a lower rate because it is a variable rate loan, so as rates go down so does the interest rate on this product.

Want to learn more about this product? Sign up for a 1 on 1 simulator presentation with a mortgage specialist in this product. They will showcase the true power of this product for you. This ensures you have a firm understanding of the benefits and risks associated with this loan so you can make an informed decision and decide if it is right for your family.