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How Busy Has It Been?

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Do You Buy Now or Drop Your Standards Later?

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If It Ain’t Broke, Don’t Fix It

This age old saying in the vernacular also works with mortgages. But why? Fixed interest rates on a home loan are often higher than variable rates, but it’s all dependant on the global bond market. Fixed rates are funded by the global bond markets, meaning the bank...

Why Haven’t Prices Plummeted?

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How Many Property Booms Have You Missed So Far?

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How Fast is Your Dream Slipping……Ahh…..Powering Away From You?

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The Cheap Money Boom!

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Perfect Urban 5 Bed Oasis

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Are You Positive that You’re Negative?

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To Be or Not To Be……….a Rent-vestor.

It seems it was easier back in the olden days. Remember back when you were a kid? More to the point, remember back when I was a kid, back in the 60s and 70s. You either rented or you bought your own home. It seemed that there were only the privileged few who could...
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You Heard it here only a few months ago!

 

 

For the last few months our good friends (not), the banks, have been slowly pushing up the rates on fixed term loans and yes, you guessed it, all the other rates will probably follow in the very near future.

Remember this one? “If It Ain’t Broke, Don’t Fix It”. Here it is right here: https://bit.ly/3cCuBjV

Banks have slammed shut record low rates on most fixed term loans already. Any that haven’t wound up yet, will very likely do so in the near future, along with record low variable interest rates, which are actually looking fairly shaky given the expected increases in loan funding costs for the banks.

Anyone out there just pay way over the asking price for their property?

Anyone nervous yet?

If so, this is where the danger lies and you can get badly bitten. “Bewdy! The bank said we can afford to borrow $1M so let’s get that $1M luxury place we’ve always wanted. We’ve worked hard for it!” Rightio then. Let’s see here. What will the variable rates be when your fixed term expires? What do you do when your fixed loan expires and your repayments suddenly increase many hundreds, if not thousands of dollars per month? Ouch!!

What does this mean for you and me? If you’ve been teaming up with your Buyers Agent to buy your property, then it probably doesn’t mean too much. You know all those dollars over the asking price that the Real Estate Agent said would be a great deal for your new home? A good Buyers Agent would advise very strongly against you paying 10s of thousands of your hard earned dollars over the asking price for a property. Why is that? It’s because a good Buyers Agent knows very well that the short term joy will turn into many years of pain and suffering when interest rates start rising………..as they are just about to do.

“Oh my!

Now I wish I had followed Bob and Sandra’s lead and used a Buyers Agent to negotiate a reasonable price for my property and……….they’re already in their new home”

Borrowers need to be very aware (and very wary) that banks have already estimated the loan funding cost rises and interest rate hikes into loans. They have teams of economists who do that all day. Repayments in that case, may very well rise significantly in the future.

Anyone remember this?

Do you think they’ve changed at all?

Maybe they’ve stopped charging those who have passed on, but as for the rest of us who are still on the right side of the grass, we’re still squarely in the sights of the share price driven bank executives. Make no mistake about that. Interest rate considerations by the bank will not have customer wellbeing in their agenda.

With the property market firing away on all 12 cylinders the way it is currently, there are still gains to be made in the immediate future. One of our own clients recently chalked up around $50,000 the minute they walked in the front door of their off-market home. But tell me, what happens when we run out of immediate future? For all those who paid too much, let me paint the picture:

Many years of pain and suffering!

OK, so let’s let the banks worry about the global bond markets. APRA has already stepped in in an attempt to arrest the over limit borrowing. The important thing is however, regardless of market conditions and what everyone else is doing, you need to stay within your own financial boundaries for now and allow for the future. You need to discuss those boundaries with your broker, not the bank. Understand not only your boundaries, but also what happens when the banks start moving the boundaries for you and move them, they will.

If you’re like many people who are still trudging the never ending open home circuit of vastly overpriced properties and greedy sellers, stop trudging and call us here at PPBA. If nothing else, we’re happy to discuss the amount of trouble you can end up in if you try to out-negotiate the real estate agents who are trying to meet  the demands of their voracious sellers.

Call now – 0490 020 801

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