3 Steps of the Mortgage Loan Process

September 19, 2019
Easy Loans

Are you looking to find out more about the mortgage loan process? Are you wondering how to get a mortgage loan? No worries.

If you’ve never applied for a mortgage before, it can seem a little daunting. Let’s breakdown the process step-by-step, so you know exactly what to expect when it’s go-time.

Step 1: Preliminary preparation

There’s a lot that goes into preparing a home loan application. Before you even begin, you’ll need to answer questions like:

  • What type of loan are you eligible for?
  • Which lender offers the best loans for your unique circumstances?
  • How much have you saved and how much would you like to borrow?

It can be difficult to know where to start, and feeling overwhelmed is normal. That’s why so many buyers choose to work with mortgage brokers. Brokers offer a free service that connects you, the buyer, with a solution that meets your specific needs.

Working with a mortgage broker

If you contact a trusted mortgage broker, they can tell you how to get a mortgage loan that suits your situation and goals. Here’s how preparing for a loan with a broker works:

  • First, you’ll meet for an initial consultation, discuss your needs, and determine whether or not you’d like to work together.
  • Then, your broker will ask for your documentation, including things like your ID and payslips.
  • Next, you will be assessed. Potential issues will be addressed, and your borrowing capacity will be calculated. From this, the broker will recommend several products.
  • Finally, you select a product to submit an application for.

You don’t have to work with a broker – you can do direct to a lender, instead. Just be sure to do your research.

Step 2: Submitting an application

Now, it’s time to submit your home loan application – this is usually done through the lender’s portal. You’ll need to include a fair amount of paperwork and supporting documents and sign a few forms.

If you choose to work with a broker, they will usually submit your application on your behalf.

Step 3: The lender responds

Your application will be denied, given pre-approval (also known as conditional approval), or formally approved.

Pre-approval means you’ve met most of the lender’s policies. The next step is finding a property and securing a property valuation. If this goes smoothly, you’ll likely be awarded a home loan.

Pre-approval generally lasts about three months, so you have a bit of time to find that perfect property.

If you have been granted formal or unconditional approval, then the lender has confirmed that they will issue you a home loan. Now, you can totally relax.

You’ve got your home loan – what’s next?

So, there you have it: the mortgage loan process. You’ve secured a home loan, and now you’re ready to settle on your new property. If it all goes to plan, the rest is history.

5 Tips for Paying Off Debt

September 6, 2019
Budgeting

Is paying off debt one of your top priorities? Are you sick and tired of worrying about upcoming payments, fees, and the growing balance on your monthly statement? Are you looking for some practical tips for paying off debt?

You’ve come to the right place – but we’re not going to sugar coat it for you. Paying off debt is, for most of us, a massive undertaking that requires making some real sacrifices.

To help you learn how to pay off debt in a way that works for you, here are our top tips.

1. Know what you’re dealing with and set a goal

One of the best ways to kick-start your debt-free journey is to sit down, work out how much debt you actually have, and set a goal for yourself. When you have a clear picture of the scale and scope of your debt, you can work backward to work out how much you’ll need to set aside each month.

Then, set yourself a goal. For example, it might be to pay off your credit card before Christmas. This goal will help keep you motivated, even when you feel tempted to grab the plastic and splurge.

2. Avoid creating more debt

If you’re wondering how to pay off debt, know this: it’s going to be much, much harder to rid yourself of potentially crippling debt if you’re continually adding to your balance. So, if possible, put down the credit card. If you find it difficult to resist temptation, you might even like to cut them in half or give them to a family member to keep safe.

3. Create a realistic budget

You’ve committed to paying off debt. Now, you need the cash to make that happen. For this, a tight budget is critical.

First, work out your monthly income. Then, determine how much the essentials cost you – this includes things like rent, food, utilities, transport, and childcare. Subtract your essential costs from your monthly income, and you’ve got what we’ll call your ‘spare’ funds.

It’s worth thinking about how you usually spend these ‘spare’ funds. Are you in the habit of eating out a few days a week? Do you pay for streaming services or gym memberships that you’re not using? See where you can cut back and allocate that money toward paying off your debt.

4. Pick up a side hustle

The gig economy has revolutionised the way many of us work. If you have the time, use this to your advantage. Another great way to raise funds is to sell your unused clothes and belongings. Look for clothes you bought but never wore, furniture you no longer need, even kids’ toys that your little ones have grown out of.

5. Consider debt consolidation

Facing a significant amount of high-interest debt, like credit card debt? A consolidation loan may be a good option. Put simply, a consolidation loan groups all of your debt into one, lower-interest loan. That means one monthly repayment and a lower interest rate – these factors should help you become debt-free faster.

Remember, paying off debt takes time

Ridding yourself of debt is a long process. But don’t give up. Freeing yourself from monthly repayments will be a huge weight off your shoulders – we guarantee it.

Cheap Holidays and Where To Find Them - Cigno Loans

When is a Long Term Personal Loan Right for Me?

September 2, 2019
Budgeting

If you’re thinking about taking out a personal loan and know that you’ll need an extended time to pay it back, or are requesting a large amount, then a long-term loan might be the best choice for you.

What is a long-term personal loan?

A long-term personal loan is usually defined as a loan that is between 5 to 7 years long. Long-term personal loans generally allow higher borrowing amounts and they may have lower interest rates than regular loans as they will take into account the extended loan period.

Long-term personal loans are usually secured loans, meaning your home or another asset is used as collateral in case you can’t continue to pay the loan. You can find long-term loans that offer either fixed or variable interest rate options. Fixed rate loans mean consistent repayment amounts, but variable loans give you the flexibility to pay back more when you are able to.

Why take out a long-term loan?

Due to the higher loan amounts, long-term personal loans are suitable for a variety of reasons including:

  • Weddings
  • A car
  • Ongoing education costs
  • Renovations to existing homes
  • Long holidays

Pros and cons of long-term loans

Like any loan, a long-term loan has both positive and negative aspects. One positive aspect is, because the monthly repayments are smaller, long-term loans are suitable for people who can’t afford to make large monthly payments. Due to the extended term, the minimum monthly payment will always be lower than a standard loan.

One of the drawbacks of long-term loans is that, over the term of the loan, you will pay more in interest overall than you would have with a shorter term. Also, paying the loan off early can attract fees. However, in certain situations, it is sometimes still worth considering.

When choosing a loan provider, you should still do your research and look for one with lower fees. Whichever loan you choose, you always need to consider your personal financial situation and what will be right for you. Some things to consider include:

  • What monthly payment can you afford?
  • How long do you want to commit to a loan?
  • How much do you want to borrow?

All of these aspects are things that you need to take into account before committing to a long-term loan.

Worried roommates reading a bank notification

8 Signs of a Personal Loan Scam

September 2, 2019
Unsecured Personal Loans

With technology becoming increasingly more advanced, it’s becoming easier and easier to fall victim to personal loan scams. When you’re in financial stress and desperately need a loan, it can become even harder to see the signs of a loan scam.

By being aware of some common telltale signs of a possible personal loan scam you can protect yourself from potential losses. Let’s have a look at some of the most common signs of a loan scam.

 

1. They’re not a registered financial services provider

Before you sign a contract or even inquire about a loan, you should always check that the lender you’re contacting is legitimate. To conduct business as a financial services provider in Australia, companies need to register for an Australian Financial Services (AFS) licence. If they don’t have a licence, don’t deal with them. Also, even if they do provide you with an AFS licence number, you should check the Australian Securities and Investment Commission (ASIC) Professional Register list to be sure that the number is legitimate. You can also check the list of known fake regulators to make sure they don’t appear there.

 

2. They contact you first

It may seem like serendipity, but if someone contacts you first, there’s a good chance they aren’t legit. Whether they contact you over the phone, through the post or by email, always consider that it may be a scam. Trustworthy companies don’t cold-call potential borrowers. If you already have a service with a bank, for example, they may contact you about their other services but if it’s someone who you haven’t dealt with before, be very wary and conduct proper checks.

 

3. The rate or terms seems ‘too good to be true’

As the saying goes “If it seems too good to be true, it probably is”. Lending is a competitive market and businesses are constantly competing with each other and adjusting their rates, but if the rate is very low compared to everyone else, there’s a good chance it’s a loan scam.

 

4. The website isn’t secure

When dealing with financial transactions, you want your lender to be concerned about internet security. Look for the padlock symbol located next to the website address bar to confirm that the site is using a secure SSL connection. This may sound complicated, but essentially if they aren’t a secured website then your confidential information is at risk. If a lender doesn’t have a secure website, then they aren’t concerned about your security and that is a big red flag that they may be a personal loan scammer.

 

5. You can’t find any address or contact details

If you can’t find any way to get in touch with the lender, don’t continue with your enquiry. You need to be able to see contact information, and even better, a physical address. A legitimate lender should provide licence, address and contact details and if contacted, should provide decent customer support.

If a lender was to scam you, it would be difficult to get in touch with them if they don’t freely provide that information. Therefore, most scammers are likely to hide their contact information so that they can’t easily be found.

 

6. The loan is guaranteed

While it sounds nice, no loan is 100% guaranteed. If a lender guarantees that you’ll be approved without even knowing your personal circumstances or credit score, then they may be fraudulent. They offer these guarantees to lure you in and take upfront deposits or fees before disappearing.

 

7. The loan offer is vague or incomplete

If a lender is hiding some of the information you usually expect in a loan such as full terms and conditions, early exit fees, balloon payment fees or interest rates, then do your checks before you consider their offer. If the offer lacks this detail or there are consistent spelling and grammar mistakes, or something doesn’t seem right then it could be a scam.

 

8. They don’t run a credit check

Credit licensees must comply with the responsible lending conduct obligations under the National Consumer Credit Protection Act 2009 (NCCP). This means that licensees must not enter into a contract with a customer if the suggested contract could be deemed ‘unsuitable’ for that customer. This means that the licensee must run appropriate checks to ensure you have the ability to service the loan. If a lender doesn’t run a check on your credit or doesn’t ask information about your financial situation, then they are not complying with the NCCP and could very likely be a loan scammer.

 

I think I’ve been scammed. What should I do now?

If you think you’ve been scammed, contact your bank immediately. They may be able to stop any fraudulent transactions from going through your account. If you sent money through another company or service, contact them as well.

You should also report the incident to the Australian Securities and Investments Commission (ASIC) as well as your local police station.

Unfortunately, there may not be much that can be done about getting your money back from any initial fees you paid but you can stop yourself from getting into further trouble by contacting someone if you suspect something isn’t right.

Some other things that you can do include:

  • Keep any email contact from the scammer as proof.
  • Check your bank accounts regularly for suspicious transactions.
  • Request a freeze on your account.
  • Request new cards from your bank.
  • Scan your computer for viruses.
  • Get a copy of your credit report to see who may have recently checked your credit history.
  • Warn family and friends.