Ralph’s Property Investing Newsleter October 19th 2016

In this edition of my newsletter:

Property and Lifestyle Workshop
Tracker Mortgages
Rates to fall further
Daily Property Alerts

Sutherland Meeting

Our last Sutherland meeting for the year will be next month on Wednesday evening, November 23rd, 2016 from 7:30 PM.

Our Sutherland meetings are free and this meeting will help you to understand how investing in property can help you become financially independent.

You will learn how the many free services the club offers make it easy and stress-free.
You will also see how the numbers work and how you might be able to easily afford something.

Special guest Laurayne Walkenden will be on hand to talk to you about finance and answer any questions.

The meeting will be held at our usual location being the Stapleton Avenue Community Centre, Sutherland, just around the corner from the library.

Property and Lifestyle Workshop – Final reminder

Our last major event for the year will be this weekend on Sunday afternoon, October 23rd, 2016 from 1:00 PM and go until 5.00pm.

You may already have received an invitation, but come and learn about the latest property market drivers and statistics. If you’re looking to buy a property but unsure where to start or maybe you own an investment property but unsure how to scale up, our Property & Lifestyle workshop is for you.
On the day, you will hear the answers to the following questions :
Where is the best place to buy?
When should I buy?
What’s happening with interest rates?
How much does it really cost to hold an investment property?
How can I maximise my tax benefits
Do I need to conduct a building and pest inspection?
Also learn about 7 hidden property investment costs that many people trying to invest on their own seldom take into account.
Hear from some of our researcher team about the Key indicators driving the economy and the property markets around Australia

Meet Successful Investors

Come and meet Kevin Young, Founder of Property Club and ask him your burning questions about how he has created his significant wealth through his investment portfolio of nearly 200 properties.

You can also meet and talk with some of the over 5,000 Property Club members who are already building their own property investment portfolios with Property Club.

Most importantly, you can meet with me as I’ll be on stage presenting a couple of segments and happy to talk to you later one-on-one to answer any questions.

Go here to register. There is a small entry fee to help defrsy the hall hire costs, but no further fees or charges.

Early-bird pricing has now finished, so entry price is $35, and if you want to bring a friend or partner, then you can use this code, 2FOR1, and get 2 people in for the price of one.

Tracker Mortgages

An interesting article on News.com site the other day talking about the banks and Tracker mortgages in particular. Click here to read.

A tracker mortgage is pegged to the official cash rate, at a rate set slightly higher than a typical variable home loan, but with the guarantee of moving up and down in line with central bank decisions.

The article quoted ASIC chairman Greg Medcraft testifying to a senate committee as saying he thought they were a good idea.

The big 4 banks naturally have a different take on this, claiming that they wouldn’t work because the source of funding here is different to overseas where this product is very popular.

The article then finds a buyers agent and a spokesperson for a finance tracking website, agreeing with the banks view.
The final quote says:

The other problem with tracker mortgages was their complexity, she said; “They sound simple, but when you look into the details you realise that the margin that you will be charged depends on the amount you’re borrowing, the reason you’re borrowing (are you a first homebuyer, or an investor, or refinancing your existing loan), how much equity you have and what type of loan you want.”

Well Duh ! That is what happens with any other mortgage these days, which is why a good broker is so important to steer you through the minefield.

What the article did not mention was that such a product is already available.

Auswide Bank’s RBA Rate Tracker Home Loan will track the movements of the Reserve Bank of Australia (RBA) cash rate. If the RBA shifts interest rates up or down, the interest rate attached to the home loan will move by the same percentage.

The RBA Rate Tracker Home Loan has been launched with a variable interest rate of 3.99%.

It is available to owner-occupied home loans of $150,000 or more for purchase or refinance with an LVR of up to 80%. Read more via this link.

I fully expect other smaller banks and second tier lenders to follow suit.

It should also be noted that the RBA sets the official rate with consideration of what mortgage holders actually pay. So if the banks refuse to pass on any or all of any cut, then the RBA will factor that in and will cut further sooner than otherwise might be the case.

It means the banks make a windfall profit each time, which is why a Royal Commission is just a matter of time.

Rates to fall further

Three related stories about interest rates.

Firstly this report in the SMH that says banks are being forced to cut the interest rate premium they charge new investors, as they once again compete for business.

A few months ago, investors could expect to pay around 0.25% more for a loan than an owner occupier. That gap is now down to around 1%.

The article notes that ING Direct is the latest to announce a cut-price mortgage deal for investors, offering new investors with a deposit of more than 20% an interest rate of 3.99%.

Note this is for new investors only. If you want to get these good rates, you are going to need to re-finance. See attached form and let one of our brokers check-out your situation. No cost, no obligation.

In related news, the latest Mortgage Choice survey shows that over 82% of their new business was variable rates, up from nearly 80% last month.
Brokers and customer alike seem more sure than ever that rates are either going to stay low or go lower.
Read more on that story here.

Which brings me to my third story (Read it here), which quotes the NAB as saying they predict the RBA to cut rates twice more in the second half of 2017, citing persistently low inflation and a subdued growth outlook as the triggers.

Daily Property Alerts

You will be pleased to know that our new web-site is now approaching usability !

The latest news is that the daily property alerts is now up and running again. If you used to get these and you no longer do, drop me a line and I’ll re-set them. If you get them and no longer want them, again, let me know and I’ll switch them off for you.

If you have no idea what I am talking about, let me know and I’ll give you a call to explain.

More News Sources

Please use the link below to visit our media centre. Here you will not only find the latest editions of our magazine, but also back copies, always with some interesting articles.

Click here to read on-line or even download a .pdf copy of the latest issue for later reading.

You should all have recieved either your posted copy, or a direct email from Head Office with your email version. Let me know if you did not get this latest edition yet.

As usual, if you’d like a hard-copy posted out to you, please let me know.

Kevin Young has now produced 80 video episodes of him answering questions from our members. You can go here to check them out.