It’s now common knowledge loans and gifts from family are a large part of breaking into the housing market. But how is parental financial support being used in other areas?
A building group based in Eltham, Victoria.
Image: Property Collectives
The extraordinary increase in house prices and debt means mortgage rates of 7% would be as painful to borrowers today as rates of 17% were decades ago.
Depending on circumstances, it may be time to re-think the bias to paying down housing debt over wealth accumulation in super. At least to do the sums, so you can make an informed choice.
Do young people pose a threat to their future freedom by taking on too much debt?
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Young people might take on a lot of debt without considering its consequences for their older years. A philosopher makes a case for laws to limit that debt as a duty toward self.
In the US “liar loans” have been identified as one of the key reasons behind the 2008 financial crisis. But how big a problem are poor loan checking practices in Australia?
New credit information-sharing rules promise to open up the consumer credit market to increased competition.
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APRA has updated its guidance to lenders on concerns about the risks to financial stability from the housing market, but it should be focusing more on the banks, not hurting those with a mortgage.
Deceitful Chinese may have trouble getting a mortgage in the not-too-distant future.
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China plans to create a credit reporting system that ranks people on trustworthiness using a all kinds of data, from finances to Facebook. Sound far-fetched? It’s happening in the US too.
Will home owners consider the non-bank sector as major banks increase lending rates?
Reuters/David Gray
Last week, Westpac hoisted its lending rate by 20 basis points in a bid to recover the costs of recent capital raisings. There is speculation other banks will follow. Australia’s non-bank lenders could…
Are loans guaranteed by parents adding unnecessary risk to the market?
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First home buyers looking to break into the housing market are turning to their parents, but it’s not a risk-free proposition for either party.
Lending standards are so tight that even former Fed Chairman Ben Bernanke, center, who until recently was one of the most powerful people in the world, can’t refinance his mortgage.
Reuters
It’s clear mortgage standards have gotten too tight when even a former Federal Reserve chairman who makes as much as US$250,000 per speech cannot refinance his home. Ben Bernanke complained about his inability…
Dealing with housing bubbles can get messy for central banks.
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Australia’s central bank has formally flagged the use of macroprudential tools to address what it called “unbalanced” lending in its most recent Financial Stability Review. Loan-to-valuation ratio (LVR…
Greater asset diversification would help Australian banks lock in a buffer for future downturns.
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One of the issues currently being considered by Australia’s Financial System Inquiry is the heavy exposure of Australian banks to the residential mortgage market. The exposure to domestic mortgages, which…
What do your shopping decisions tell marketers about you?
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The days when Coles and Woolworths only sold groceries are long gone. Both are now established players in a broad range of consumer markets, with interests in liquor and hotels, fuel and convenience, general…