Mortgage Loans, Home Loans, Bad Credit Home Loans

1300HomeLoan has finally rolled out the much anticipated marketing campaign across a range of media including extensive television, print and online advertisements.

Speaking about the launch, 1300HomeLoan founder and managing director John Kolenda said the company has spent  significant time late last year selecting its dedicated 200 mortgage brokers who will work under the banner of 1300 homeloans

With the business website and Call Centre infrastructure in place the new business is certainly ready to make a start generating warm leads to their mortgage brokers and thereby significantly boost their business.

Mr Kolenda said he was still signing up new partners for the network almost every day and was progressing rapidly towards his eventual target of 400 members who would share an annual marketing war chest of $4 million.

The business is looking for experienced and highly professional mortgage brokers to join their ranks – home loan leads will be provided.

Mr Kolenda said the 1300HomeLoan brand was exclusive to selected brokers on a postcode basis and was supported by the 1300HomeLoan marketing, individual broker promotion, a website and a host of other support material.

Internet Finance comparison service. Ratecity. believe that 2012 will bring with it renewed demand for home loans with volumes going up.

Property prices have come down significantly making them more affordable to potential purchasers. Interest rates are on their way down with further decreases projected during 2012.

Consequently there is an expectation of more people looking to make a purchase and apply for home loans. Also property owners are likely to be fairly active seeking out good mortgage refinance deals.

Although we’re yet to see the strong numbers of home buyers from five years ago, lenders are likely to see business improving this year as borrowers react to lower prices and interest rates.

Home buyers started to pick up towards the end of 2011, with almost 51,000 home loans financed in November, according to the latest (original) figures from the Australian Bureau of Statistics (ABS) released last week (January 16, 2012).

This is the most significant number of home loans financed as recorded by the ABS for two years. The actual dollar value of these home loans was almost $15 billion in November alone.

According media reports the Japanese banks are getting ready to enter the Australian home loan market in a serious way.

Industry players believe that international banks have the capacity to provide significant competition to local lenders especially if they decide to full pass on rate cuts to their home loans. Australian banks have already made it clear last year that future rate cuts may not be passed on to borrowers in full in order to absorb increases to funding costs.

According to Mr Bouris from Yellow Brick Road, at least three big banks, the $62 billion Mitsubishi UFJ Financial Group, $42 billion Sumitomo Mitsui Financial Group and $35 billion Mizuho Financial Group, are said to be considering operating on Australian shores.

But while Mr Bouris is bullish about what the Japanese banks can achieve in the Australian mortgage market, RESI’s Lisa Montgomery is not convinced.

Ms Montgomery believes that Japanese banks just as local banks are affected by the increase to the cost of home loan funds and will not be able to significantly undercut the interest rates offered on home loans by Australian lenders.

Is seems that the Commonwealth Bank of Australia has more than doubled the money it makes on home loans since the period of the global financial crisis.

And, while the CBA and other banks/lenders continue to complain of having to pay depositors higher rates for the funds they lend out, RBA statistics point to the fact that the gap between deposit rates and the RBA cash rate is decreasing.

Certainly figures provided by the RBA suggest that the cost of home loans is nowhere near as high as is alleged by the banks.

Of particular note, figures from the recent Commonwealth Bank profit announcement show net home loan incomes jumped more than 130 per cent since the height of the global financial crisis, to more than $2.6 billion, The Daily Telegraph reported.

Despite this most of Australia’s larger banks have in fact made comments to the media that they are unlikely to pass on in full future rate cuts announced by RBA due to higher costs of wholesale funds.

The World Bank yesterday slashed its global growth forecasts, warning the world is on the edge of a new financial crisis, more damaging than the one that followed the collapse of Lehman Brothers in 2008.

A number of analysts have suggested the impact of rising costs of wholesale funding have been exaggerated by the banks, particularly as the sector can access other sources for cheaper funding.

Since interest rates on home loans have began to drop late last year, many borrowers are using the lower rates as an opportunity to reduce their home loans by repaying as much as they can off their principal.

PRD national has conducted a poll of existing property owners which has identified that 68% of existing home owners are taking advantage of November and December cash rate reductions by putting any extra savings toward their home loans.

Another 18% of respondents planned to save the difference, while 8% will spend on discretionary items.

Almost 6% of the respondents intend to spend the money saved through home loan rate reduction on day to day expenses suggesting that a number of home and property owners are struggling to meet their home loan repayments as well as afford to buy basic essentials.

Most experts believe that interest rates will come down again in February.

According to Loan Market, Home Loan approvals in Australia are expected to continue to increase during 2012 .

Following an RBA cash rate reduction first in November and then again in early December,most mortgage brokers and lenders have seen an increase in demand for home loans.

“The consecutive growth seen in the second half of 2011 should continue while consumers act upon repeated rate cuts by the RBA in November and December,“ Rushton said.

Home loan approval figures for November released by the ABS showed the eighth consecutive month of growth for housing finance, which Ruston said was indicative of the continued trend.

There is good reason to expect that borrowers will remain positive and demand for home loans strong, given that the market is anticipating future rate cuts.

Loan Market said it had seen significant demand brought forward in NSW due to the 2011 stamp duty exemption deadline for first homebuyers, which passed on 1 January this year.

The ANZ bank has conducted it’s first out of cycle interest rate pricing assessment, and has decided to at this stage leave its standard variable rate for home loans and business loans unchanged.

Last month the bank management announced that they will be conducting monthly reviews of their home loans rates and may decide to initiate out of cycle rate changes rather than in response to the Reserve Bank monthly announcement.

“Bank funding costs are now largely unrelated to movements in the Reserve Bank’s official cash rate,” ANZ CEO Philip Chronican said.

“By reviewing key variable lending rates each month we can more accurately reflect the sustained changes in funding costs we incur through the interest we pay to customers for their deposits and to investors in wholesale money markets.”

It seems that the decision by the National Bank not to pass on the November rate cut in full to its home loans products has had a negative impact on the bank’s market share in the space of home loans. This is despite the fact that NAB already had the cheapest home loans amongst the big four banks in Australia.

According to the latest data from the Australian Prudential Regulation Authority, NAB had achieved  only a 0.7 per cent growth in it’s home loans portfolio, edged out by ANZ, which grew by 0.8 per cent.

This is the first time in 18 months that the National Bank did not claim the title of Australia’s fastest growing mortgage provider.

In November last year, NAB became the only major not to pass on the RBA’s 25 basis point rate cut in full.

Instead, tNAB had only passed on a rate cut of 20 basis points to it’s customers.

But while NAB’s rate decision has ultimately slowed its home lending growth, the bank still managed to finish the year on top, with the lender becoming the only major to enjoy an increase in its market share over 2011.

According to RFi’s latest Mortgages Market Wrap, the Commonwealth Bank of Australia’s market share slipped 1.4 per cent in the 12 months to December, while Westpac and ANZ saw declines of 0.6 per cent and 0.3 per cent respectively.

NAB’s Ubank brand had performed very well with heavy volumes of home loan refinance being processed over the past 12 months. Ubank’s competitively priced home loans had contributed significantly to the overall success of NAB during 2011.

Almost one in four home loans written by AFG Mortgage Brokers during the month of December was with a smaller lender , not one of the big four banks. The demand for mortgage refinance was driven largely by the dropping interest rates. Borrowers with existing home loans were searching for cheaper and better home loan deals.

According to AFG figures, the total non-major market share in December was 24.3%  on the back of their capturing of 29% of the refinancing market.

Non-bank and regional lenders have traditionally been supported by new home owners but the capture of a large chunk of the refinancing market indicates that a new battle front has been drawn.

The popularity of smaller lenders was greatly assisted by Wayne Swan when he called to home loan holders to look around and refinance their home loans to smaller banks or credit unions if these lenders offered a better deal than their current bank.

AFG’s mortgage index showed that borrowers continue to be attracted to fixed rate products with the proportion of fixed rate loans rising to 19.2% in December, up from 17.2% the month before. The proportion of borrowers locking in their rates peaked in October at 20.4%.