| Loans Emerging from your Property
Loans against residential property are the cheapest options available to the homeowners. These loan plans can offer more loan amount at lower rate of interest. A loan against your home is granted only when you are willing to pledge it as a security, and therefore, there are chances of losing it if you fail to repay the loan in time. Hence, before deciding, you would like to ensure that you can afford the loan, and comfortably make the repayment. Lenders can sanction the full amount of equity present in your residential property as loan amount, though generally it is only restricted to a certain percentage. If you opt for a secured loan of longer period, the instalments will be smaller, but the quantum of interest will become larger. You have to make the choice according to your need and requirement, and choose the lender that caters to your requirement.
Banks engaging in anti-competitive behaviour: Choice
Australian banks and financial institutions are engaging in anti-competitive behaviour in the home loan industry, according to the consumer group Choice. Research from Choice shows extremely high mortgage exit and entry fees are often preventing borrowers from switching to a better deal on their home loan. Choice's director of policy and campaigns Gordon Renouf says these high fees are undermining the competitive interest rates being offered by independent lenders. "The problem is that if you see someone else with a quarter or a half a per cent better mortgage rate, you're going to be reluctant to change if you're going to be paying $1,000 or $2,000 to get out of your mortgage contract," he said. "It's going to take a while before you reap that money back from a lower rate." But the Australian Bankers Association chief executive David Bell says Australian mortgage fees exist to ensure proper background checks on borrowers take place.
CUA axes variable loan sales by brokers
AUSTRALIA'S largest credit union is the latest credit crunch victim, suspending sales of all its variable home loans through brokers. Credit Union Australia has told brokers the sales would stop from today, although it would continue to sell the loans through its branch network. "As a result of recent events in financial markets and following a review of CUA's broker distribution model, CUA will temporarily withdraw its variable interest rate product range from this Friday," the credit union said in a note to brokers. CUA is also by far Australia's largest mutual society, with 388,000 members and $6.6 billion in assets. CUA merged last year with the Australian National Credit Union to form the new entity. It was named credit union of the year this year by Money magazine.
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