Are you planning on buying your first new home? Recent news has shown us through a survey that the proportion of first-home buyers has consequently been declined in most of the main centres mainly due to the fact that mortgage-lending restrictions came in six months ago. Surprisingly, of the 22 areas surveyed by property data company CoreLogic, only a mere four had a slight increase.
The purpose of this survey originally was to compare the percentage of home sales going to first-home buyers in the three months before the Reserve Bank changes took effect. Now, the number had dropped nationally by 1.1 percentage points, which is very relevant to anyone who is looking into buying new homes or investing in real estate property.
Voters Fear for Future Mortgage Rates and Policy Makers
On other news concerning mortgage this week, Bernard Hickey apparently is playing off voters’ mortgage fear to pull votes in for the upcoming elections. Prime minister John Key played to the heart of his political and economic strategy this week when he said: “If a political party tells you they are going to spend a lot of money, ask them how much it is going to cost your mortgage.”
Many voters after hearing the prime minister’s statement on mortgage have fears for the policies and rates on mortgages in the future. An event like this can really influence the outcome of an election, and not to say the future of mortgages and home loans. The questions that many people need to ask is: “Who would get the benefits of increased government spending?”
Home Loans and Mortgages: Where does the money come from?
Another interested topic that is brought up this week on mortgages and home loans is concerning the money that comes from your home loans. Many people go about applying for home loans and handling their mortgages without really thinking about it, but where does the money come from? Apparently, banks pull money out of thin air and then lend it to borrowers for home loan and other types of loans.
Whenever you apply for some sort of loan, or a mortgage, the bank you applied for creates the money literally out of nothing. It is not lent to you from the banks existing holdings, nor is it borrowed from other accounts. It is simply entered into a bank account digitally and from the day you sign the loan, you are responsible for paying back the created money plus all the interests that comes with it. Just food for thought, and something to think about the next time you sign up for a home loan or mortgage.
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