Business News Australia.com.au

For the most up-to-date mortgage news, refer to Your Mortgage magazine.

Compare home loans side-by-side

Receive an assessment of how much you can borrow, free

Read how interest rate changes can affect your mortgage

Locate a mortgage broker in your local area

Get a personalised answer to your mortgage question

Subscribe to the weekly mortgage newsletter

>>> READ MORE <<<

National Australia Bank– the first major bank to dump penalty fees to appease angry customers, a move that would flush more than $100 million down the drain annually.

But it appears pre-emptive bet on fee reductions has paid off in spades.

A month after dumping all penalty fees, NAB saw a 40 per cent reduction in customer complaints and a sixfold increase in customer acquisitions.

NAB chief executive Cameron Clyne yesterday admitted his market-leading purge on penalty fees was so successful in driving new business and generating customer goodwill that it almost covered the drop in fee revenue.

The bank announced in July it would be dumping its overdrawn account and dishonour fees in a bid to win new customers and improve the bank’s image.

Rival banks responded to the move almost immediately, but none followed NAB’s lead in scrapping penalty fees altogether, with Westpac, Commonwealth and ANZ preferring only to lower such fees to $9, $10 and $6 respectively.

Excerpt from - NAB rewarded for dumping fees - By Andrew Carswell
Source : - http://www.news.com.au/

6 ways to succeed during a recession (and become a confident and knowledgeable investor)

Bill Zheng reveals smart strategies investors can adopt to stay afloat and succeed in the current downturn

If you’re confused, uncertain and even frightened about the property market in Australia, you’re not alone. Most investors feel that way. They also feel angry and even betrayed.

During most of 2008, property investors across Australia didn’t fair too well, some couldn’t sell their properties at the right price to exit, others couldn’t refinance on a good valuation to get out of their existing mortgages provided by those defunct non-bank lenders. Many developers couldn’t sell their stocks or obtain proper development finance, and you name it.

We’ve seen some relief, in the first few months of 2009 at the low-end property market due to the first home owner grant and lower interest rates. We all know this won’t last, especially when Australia is officially included in the ‘Great Recession’ by IMF.

I believe that in tough times you should revisit your strategy, purpose and assumptions continually – especially when you’re experiencing resistance or frustration of any kind in the accomplishment of your investment and lifestyle goals.

Now more than ever, it’s especially important that you anticipate market shifts, control risk and create powerful strategies that move you in the direction you want to go.

1. Re-position your leverage level on properties

The current recession is mainly caused by financial crisis, a good percentage of the economic growth and asset value have been contributed by over-leverage.  Deleveraging across the world will see credit tight for many years to come, even after the economy recovers.  Hence we will see tight credit markets for at least another 2-3 years if the IMF’s prediction of the global economy recovery late 2010 is correct.

You should consider at least 3 factors when you look at leverage:

1. Return on investment: this is comparing your deposit money sitting in a bank vs. being invested into a property.

2. Safety: this is to avoid negative equity or loan recalls.

3. Your own circumstances: how close you can achieve the ideal leverage level.

Ideal leverage level:

• If residential property prices were going up at 7-10% each year, higher leverage (such as 80% or above) will give you higher return on your capital invested and still relatively safe.

• If residential property prices were to be flat or even slightly down each year, lower leverage (60% or below) will give you a higher return on your capital invested and it is also safer to keep your leverage lower.

In my opinion, our current property market trend is likely to be suitable for 60%LVR or below if your circumstances allow you to do so.

If you must stay at higher leverage, your income should at least allow you to pay down your mortgage principal on a monthly basis.  Because paying down your mortgage is similar to lending your money to the lenders. The lender is paying you the interest rate your mortgage is costing you; you have effectively become a lender.  Lenders make more money than borrowers in a deleverage economy (home loan calculator).

Many people are concerned about lenders recalling their mortgages if they show negative equity.  For most private property investors and homeowners, negative equity will not be the main reason why the lenders would recall your loans.  Lenders would usually recall loans when the borrowers fail to make repayments.

However if you are one of those property investors with a very large property portfolio or run a business with credit facilities with the same lender, you may want to separate the business credit facility from your mortgages and reduce the exposure to a single lender. This can avoid the unnecessary risk of your mortgage being reviewed by the lenders at an inconvenient time.

2. Re-set your minimum cash reserve

Cash reserve is not a new concept to most property investors; most of us know we must have them to cover our rainy days.

How much is sufficient is quite a personal matter, but the general idea is: how many months you would like your cash reserve to last if you experience severe loss of income and overrun of cost at the same time.

• Loss of income can be loss of your job & business income, default of debtors, loss or decrease of investment income such as rent & dividends;

• Overrun of cost can be increase of interest repayment from your mortgage, unexpected expenses.

>>>Read more at Your Investment Property magazine<<<

Republished with permission.

Wednesday 19 August 2009

Throughout the economic downturn, Australia’s banks have outperformed their global counterparts when it comes to home loans.

The news comes from the Reserve Bank of Australian (RBA), which has commented this week on the strength of the country’s financial systems.

Speaking at the seventh Annual Retail Financial Services Forum, assistant governor Malcom Edey reviews the banks’ performances in a variety of sectors from shares and profits to loan approvals.

When it came to home loans, Mr Edey explained that Australia has a “favourable position” compared to other countries, with lower loss rates than the UK and US.

This is because mortgages are full-recourse, adding an incentive to borrowers, including those looking for low interest home loans, to avoid over committing themselves financially.

Also, the Uniform Consumer Credit Code ensures that lenders distribute home loans responsibly, he remarked.

“It’s a great advantage during an economic downturn to have a banking system that remains profitable and is able to continue lending,” he said.

Research from Deutsche Bank has suggested that banks have begun to restrict lending to first-time buyers the Sydney Morning Herald reports.

This article is brought to you by Mozo – Helping you compare home loans

Loan Market is Australia’s fastest growing home finance broker group. With more than 500 Mortgage Brokers and staff across every state in Australia and in New Zealand; securing in excess of $600 million in home finance each month, we bring to you every major residential, commercial and business bank and lender in Australia, along with a wide range of leasing and personal finance lenders and deposit bond providers. Our brokers especially understand the real estate market, and have access to over 400 loans. In fact, it’s hard to imagine a loan we haven’t seen.

Our mortgage broker team has an excellent understanding of the competitive finance market and the right tools, processes, accounting practices, controls, and technology to assist you in finding the home loan that is in your best interest. They are also supported by a knowledgeable and committed team of core staff >>>READ MORE

At REALESTATEGUIDE.COM.AU ‘we are passionate about helping your business grow’

By listing your business and services with a Business Directory Listing or by becoming a Sponsor on Real Estate Guide.com.au you will receive high online exposure for very affordable rates.

Real Estate Guide receives thousands of daily real estate searches with 85% of our consumers arriving directly from a successful search in Google. Real Estate Guide provides lead driven, cost effective Business Directory Listings and Sponsor advertising campaigns for the following Real Estate related services:

• Mortgage or business finance
• Home Insurance
• Investment property products or services
• Buyer agents
• Non franchise real estate agents
• Property developers
• Real Estate media
• Professional services including quantity surveyors, valuers and conveyancer’s

Visit our Business Directory Page to view our advertising packages and current examples of successful advertising campaigns anf find out how we can help your business grow by increasing consumers to your website and services.

You may also visit our Home Page and search our main navigation under Business Directory - see List Your Services

The Australian dollar hit new record highs of 90 US cents this week, after the domestic jobless rate fell to a fresh 33 year low.

The fall to 4.2 per cent in September - the lowest level since November 1974 - from 4.3 per cent in August, stoked speculation of another interest rate rise next month, pushing the unit higher. 

When the Australian dollar is doing well against the US dollar, this obviously means that the greenback is feeling, well, rather green. Texas Republican congressman and Presidential candidate Dr. Ron Paul is running on a policy that more people in America and here in Australia should be listening to and talking about. 

For once an aspiring leader of the free-world is actually leading by example and not by force and sees the U.S’s foreign policy as being one of the major sources of their economic woes. He has been voicing loudly that the Greenback’s value has been gutted because the U.S doesn’t have an export market anymore, instead it exports dollars to the world, which devalues the currency, and the world accepts it hand over fist. 

During the October 9^th Republican GOP Debate on MSNBC, Dr. Paul exemplified why he is gathering a groundswell of grassroots support all across America, raising more money on-line than any other Republican candidate, topping $5 million, as well as more donations from members of the armed forces than any of his fellow candidates, not surprising when he is the only anti-war Republican candidate. When asked about his feelings and questions on the bonanza that is the hedge funds market Paul said,”I think this is not a consequence of free markets. What is happening is a transfer of wealth from the poor and the middle class to the wealthy. This comes about because of the monetary system that we have when you inflate a currency or destroy a currency, the middle class gets wiped out so the people who get to use the money first, which is created by the Federal Reserve System, benefit. So the money gravitates towards the banks and to Wall Street. You see that’s why we have more billionaires today than ever before. Today this country is in a recession for a lot of people. Michigan knows about it, poor people know about it, the middle class know about it, Wall Street doesn’t know about it, Washington D.C doesn’t know about it, but it is because of the monetary system and the excess of spending. As long as we live beyond our means we are destined to live beneath our means, and we have lived beyond our means because we are financing a foreign policy that is so extravagant and beyond what we can control, as well as the spending here at home, and we are depending on the creation of money out of thin air, and it is nothing more than the debasement of currency. It’s counterfeit, and it is a natural, predictable consequence that you’re going to have people benefit from it and you’re going to have people suffer when you print money. So if you want a healthy economy you have to study monetary theory and work out why it is we are suffering, and everybody doesn’t suffer equally or this wouldn’t be so bad. It is always the poor people, people on retired incomes, that suffer the most, but the politicians and those who get to use the money first, like the military industrial complex, make a lot of money and they benefit from it”.  

So what happens here in Australia when someone gets hold of the economic reigns in the White House again? The horse may have bolted but Dr Paul seems to know how to get it back in the yard and locking the gate, by returning to a gold and silver standard. Something that Kennedy had put officially back on the books upon his discovery of the corrupt world federal reserve banking system and his refusal to no longer stand by idle, and something that no President since has been game to enact or overturn.

Small and medium enterprises across Australia can now access support and advice on improving business performance, through the newly created Australian Industry Productivity Centres.  These centres can help you source finance and receive specialist advice and technologies. They also offer services including:

• business reviews
• tailored advisory services
• technology and knowledge solutions
• international experts

To find out more visit>>

Investors in financial institution Rams face low discounted shares as Rams stock dropped 81% since listing in July.

Westpac have made an offer of $140 million for Rams name and home loan business.

The Company still has $15billion in partly unfunded mortgages, which are left in hands of shareholders, and also needs to refinance $4billion in loans.

Upon speculation that Westpac’s offer would be the best shareholders could hope for Stuart Wilson of the Australian shareholders association said that ,“One would hope that over the next few weeks other banks would take an interest in those assets to and force the price up”

The Australian Shareholders Association is claiming that Rams shareholders prospection did not properly specify that Rams were relying on the US credit market for funds. It started becoming known in August that Rams were a of victim the global credit crunch, a result of the US mortgage crisis. Shareholders are seeking legal advice.

Businesses in Victoria can now apply for a grant to help them create commercially viable technologies that will improve their environmental impact. The Enhancing Sustainability in New Investment program is aimed at companies across a range of industries from both regional and metropolitan Victoria.

The program will support technologies and processes that have benefits for the environment including:

• improving energy efficiency
• reducing greenhouse gas emissions
• saving water
• reducing waste.

For further information or to apply for the Enhancing Sustainability in New Investment program, visit http://www.businessnewsaustralia.com.au/government-news/