|
|
Post by Brian Gibbons on Mar 18, 2005 19:18:56 GMT -5
You need a job and credit rating. This thread will talk about qualifying for a traditional bank loan.
|
|
|
|
Post by Brian Gibbons on Mar 19, 2005 20:06:53 GMT -5
How to Pay Down Your Debt
Paying down debt is an art. When you are stuck with high interest rates and you are making minimum payments, you can pay and pay and it might take you 40 years to pay off an 8,000 debt when paying minimum payment.
Pay more than minimum payments.
To decide what debt to pay off, of course, you try to pay the most pressing one down first, however check your credit card payments as to what has the highest interest rate and tackle that one first. Double the payment or move it to a different credit card.
If you have one at 9 percent interest rate, you would not try to pay off that credit card as fast as you should pay down one at 24 percent interest.
Some people will tell you it is better to have savings in the bank. Think about it, you are saving at possibly 3 percent on your money, while on a credit card you could
be paying up to 28 percent interest on credit cards payments.
If you suspect you might have some cash problems, consider paying on a card that has quick cash that you can get a hold of if you get into trouble. The money is there if you need it. So, get that debt paid down.
Tighten up that belt a bit, it really doesn't hurt, count those pennies and put those pennies on your credit card debt.
Think three times before buying something with your charge card. Charge cards make things so easy to buy. Think about paying hard cash for what you are buying and think of how much more you are paying for it as the interest on it accrues by using your credit card.
|
|
|
|
Post by Brian Gibbons on Mar 20, 2005 17:24:31 GMT -5
Banks get cautious with home lending
20 June 2004
By GARRY SHEERAN
Banks are tightening their lending criteria as the housing boom cools, over-heated property valuations fall and interest rates continue to rise.
Where banks once lent up to 80% of the value of inner-city apartments, they are now often prepared to lend no more than 50% of the value.
Banks are also taking a more cautious approach to lending on high-value coastal properties and on homes in places where boom conditions have bordered on bust.
Kiwibank chief executive Sam Knowles said Nelson, Wanaka and Queenstown were examples of locations where banks were taking a hard look at loan applications. Tighter loan criteria were decided case by case and could vary widely.
But the uniformly big change in banks' willingness to loan on the apartment market "only recognises the risks in this sector", he said.
Knowles said banks were now particularly cautious about apartment developments. But it was unlikely banks would revise lending criteria allowing homeowners to borrow up to 100% of the value of the property in certain circumstances.
"In tightening criteria on the high-risk stuff, we are following what happened with Australian banks a year or more ago," said Knowles.
"But we regard the property market generally as still well-supported and pretty sensible."
As homeowners faced rising interest rates, soaring debt levels and talk of housing market bubbles bursting, banks were presenting another view.
Said Westpac Bank chief economist Brendan O'Donovan: " . . . it is premature and possibly unnecessarily alarmist to be talking about a (property) crash".
Conditions were similar to 1998, when parts of the housing market were 10% over-valued and prices subsequently fell by around 5%.
"We have been there before and history tends to repeat," he said.
Banks lent money taking into account changing economic circumstances during the whole cycle of a loan.
If borrowers got into difficulty making repayments through job loss or other change in circumstances, banks preferred to work through individual cases rather than force home sales to recover debts.
But banking and property commentators believe homebuyers could face a squeeze from banks if the property slump turned into something more serious.
Massey University banking lecturer Claire Matthews said a 10% drop in property values in Auckland could see banks lower the amount of money they were prepared to lend from 95% to 90% of valuation, or even lower.
"They may want mortgage indemnity insurance to kick in earlier, and they will be far more wary of allowing people to top up mortgages to do extensions," she said.
Matthews said the first indication of changes may come from mortgage insurers.
"If they refused to insure mortgages at 95% of loan valuation, for example, then banks would act quickly."
In the year to April, housing loans by registered banks totalled $90.6 billion, up 18% from $77.6b the previous year and $70.0b in 2002.
Ian Graham, head of PMI, one of the largest mortgage insurers in New Zealand and Australia, said his company took a long-term view of the market when setting its policies.
"We try to avoid having to make a knee-jerk reaction to changes in the market such as we are seeing now."
|
|
|
|
Post by Brian Gibbons on Mar 20, 2005 17:29:45 GMT -5
|
|
|
|
Post by Brian Gibbons on Mar 20, 2005 17:36:56 GMT -5
New home grant to be cut
HOPES of an extension to the $10,000 first-home buyers grant for new
housing will be dashed in the May 14 Federal Budget.
The Government will press ahead with plans to reduce the grant for those building a house to $7000 from July 1 this year. This will make the grant equal to the amount offered to first-home
buyers purchasing an established home. It gives those who plan to build just over two months to claim the extra $3000. The latest revelation quashes recent reports the Government has been
considering an extension to the $2 billion scheme. Despite strong lobbying, the home building industry has been unable to convince Prime Minister John Howard's office to extend his
assistance.
The Housing Industry Association had urged the Government to maintain the difference in the two grants to stave off another slump this year. The HIA argued that reducing the new home grant would see first-home buyers switch to existing homes just as builders' orders began to dry up.
But one insider said the Government believed continued low interest rates would sustain the housing industry. He said there was also still a lot of building work in the pipeline. With the Government working with a slim surplus, the projected multi-million cost of an extension was seen as excessive.
Last March, the grant was doubled to $14,000 for new homes to guard the economy from a deep building slump. Last December, the grant was reduced to $10,000 and extended for six months.
As of February 20, more than $520 million had been issued in grants for both new and established homes to 65,000 Victorian first-home buyers.
HIA's executive director of policy and public affairs, Ruth Morschel, said the association had given the Government a revenue-neutral assistance option in a last ditch bid for help. "We are still in there lobbying on the merits in maintaining a differential between the two grants," she said.
Ms Morschel would not comment on HIA's revenue - neutral proposal, but it is believed to involve reducing the grant for existing homes.
Existing homes now account for 25 per cent of grants awarded. But the HIA is concerned that with both grants equal, the share of first home buyers choosing to build will fall to 7 per cent.
A spokesman for Mr Howard said he was unable to comment on the contents of the Budget.
Source: The Melbourne Herald Sun Newspaper, April 22 2002
Author: Rick Wallace
|
|
