Jimmydee's Jabber Q2 2024

G'day everyone, and welcome to my second newsletter of 2024!

I hope everyone is enjoying the cooler days at the moment, especially my Cairns clients, we needed a bit of a break from the heat!

Since my last newsletter I had my information session for first home buyers which showed me that there is still plenty of first home buyers wanting to jump into the market and take advantage of grants that are available to help with buying.

The problem people are having is actually finding a property, the Cairns housing market is still high paced with most real estate agents saying the same thing “We need more stock” not long after a listing is put up, its “Under contract”.

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What can I do to be a stronger applicant with offers?

The best thing you can do as soon as you confirm you are wanting to buy your own home is get a pre-approval. A Pre-approval is where you do all the hard work on the front foot, before you even know what property you want. We would make a plan together and confirm what your maximum borrowing would be, what the deposit, repayments, costs, etc, would all look like, and we submit an application and get a Pre-approval.

A Pre-approval means that the lender is happy to lend you the declared amount and the big difference between a Pre-approval and a formal approval is a credit check, and a contract of sale being written up.

If you think you may want to talk about a Pre-approval, or have any questions just reach out.

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What’s going on with the interest rates?

Since my last newsletter, the Royal Bank of Australia (RBA) has had two meetings, one in March and another in May. In those two meetings the RBA decided to put a hold on interest rates at 4.35%, which was the fourth straight interest rate hold.

At the same time Australia has seen its inflation continue to make Australians tighten their wallets and purses with Treasurer Jim Chalmers saying

"We know there is more work to do in the fight against inflation because it is still too high, and people are under pressure and that's why the Budget had such a big focus on providing responsible cost-of-living relief."

But what does that mean for mortgage holders?

Well, some economists believe that the RBA will need to hike interest rates in their next meeting on the 17th – 18th of June to take some demand out of the economy.

But not everyone agrees with this prediction, such as AMP’s deputy Chief Economist, Diana Mousina, who has held onto her view that the RBA will cut interest rates in November.

No one has that crystal ball to get the answers, but we will see what happens in their next meeting in the next couple of weeks.

Remember, if you have any questions or concerns about your loan, or don’t understand something, reach out anytime I am always here to help.

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Are you feeling things getting tighter? Should you refinance?

I have seen a lot of refinance clients who have much higher rates than the average for loans with their Loan to Value Ratio (LVR). You may think that your rate will be adjusted according to the market, but sometimes your rate is on an old product or on an old discount margin which puts your rate higher than what it should be.

Remember it is worth reviewing your home loan every 12 months to ensure your loan is working for you and not against you, if you’d like assistance with this, reach out anytime.

I have also seen refinance clients who do not know the tips and tricks that can save you thousands on interest per year as well as reduce your loan term. For example, if you’re currently repaying your home loan monthly, consider changing it to fortnightly or weekly if you have the capacity.

Your interest is calculated daily and charged monthly, so if you repay your mortgage four times a month instead of one, this will ultimately save you on interest even though you are repaying the same amount. Doing this can reduce your loan term by a few years, as well as there being an extra week in March, May, August, and November to help pay it off even sooner.

Before I wrap up, I would like to thank you all for reading my second newsletter of the year. If you have found this information helpful, you will also find the benefit in liking my Business page on Facebook where I regularly post information on the market with some hints and tips.

If you or someone you know wants to have a yarn about anything home lending, reach out anytime.

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Regards,

Jimmydee (JD) Baker Spittles 0475 050 753 [email protected]

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Astute Financial Management Pty Ltd | ACN 093 587 010 | Australian Credit Licence 364253 ?| Cairns Wealth and Insurance Pty Ltd T/As Astute is a corporate authorised representative (377873) of Alliance Wealth Pty Ltd | ABN 93 161 647 007 | AFSL 499221 | centrepointalliance.com.au/AW.General Insurance provided by Astute GI Pty Ltd (ACN 641 609 341) as an authorised representative of Ausure Pty Ltd ABN 94 096 971 854 AFSL 238433. Health Insurance products are underwritten by St Luke’s Medical and Hospital Benefits Association ACN 009 479 618 (St.LukesHealth), a registered private health insurer, [trading as Astute Simplicity Health] and members are introduced by Astute Financial Management Pty Ltd or related entities (collectively known as Astute) for which Astute receives a commission

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