Alan Stott

Happy Clients...we saved their deposit put down on their investment property!

 

Change can be positive, but sometimes doesnt tick all the boxes for a bank. Within a week, we were able to access finance, and therefore Brians deposit of $67,000 was saved, as the investment property was able to settle with the borrowed funds.

Michael Saves $733/month by allowing me to restucture his debts into one simple monthly homeloan payment!

 

Michael was referred to me by his Financial Planner. We restructured his finance, minimised costs and saved him $733/month....thats $8,796 a year, every year!

Home loan defaults are climbing across the country, but there is a way to relieve mortgage stress. Refinancing your loan could save you thousands of dollars every year!

An increasing number of Australians are falling behind on mortgage payments. Fitch Ratings reveals a 30% increase in arrears during early 2011.

While homeowners received another rate reprieve from the Reserve Bank of Australia in December 2011 and another expected in February 2012, there is a way for borrowers to take matters into their own hands and significantly reduce their own mortgage stress.

The latest issue of Your Investment Property’s sister title, Your Money Magazine reveals refinancing your mortgage can save you thousands of dollars over the life of your loan - and there’s never been a better time to consider your options.

Over the last few months, lenders have been aggressively competing with each other in the home loan market in an effort to boost market share.

A Mortgage Industry spokesperson Kristy Sheppard noted, “There are some highly competitive deals on the table for new borrowers just as there are for those looking to refinance. Get out here and get amongst it if you’re looking to enter the market. Take a good look around.”

She adds, “Anyone who hasn’t at least explored their options could easily be giving themselves a raw deal by simply going with their everyday lender or ignoring the possibility of switching to a better suited or more affordable home loan.”

Is it for you?

Refinancing isn’t for every homeowner and there are a couple things you should look at before you consider what else is out there.

Step 1: Review your loan – check your rate, fees and other costs             

Step 2: Compare up-to-date information on what’s available in the market. Call us and we can provide you with suitable product options. When comparing loans, be sure to look beyond the rate. Other criteria that might be important to you:

• the comparison rate or AAPR
• loan flexibility
• loan support/service
• loan term
• Lenders Mortgage Insurance implications
• extra important features: offset account, redraw facility, professional packages 

If your review reveals there is a better deal for you, then it’s time to look at the numbers. The best way to break it down is to make these calculations:

1. How much interest will the new loan save?
2. How much it will cost to get out of your current mortgage?
3. How much it will cost to set up new mortgage?

We can calculate the savings for you and provide you with a cost estimate and the best product options to suit your current and future needs.

If the interest saved outweighs the costs to get out of your current mortgage and set up a new one, then refinancing could be the next best step. (Loan calculators and tools can be found here http://www.beatthebanks.com.au/calculators

Listen to "THE BANKS" Theme Tune....The Great Song Of Indifference!

I've got some established and really nice clients suffering hardship due to a combination of low pay and the ease of securing easy credit from the Bank Monsters and as a consequence, run away credit card debt.

My clients asked for help and got none! Mum and dad at the moment both have terrible flu, and don't know how they can keep pace with the growing debt due to interest compounding. They've got three kids and a dog and both of the parents have been put on reduced working hours in their respective jobs.

They rang me for advice when it was too late....Mum said that she was too embarressed to call me while the problem was building, BUT THAT IS EXACTLY WHAT SHE SHOULD HAVE DONE......BEFORE IT BECAME A MASSIVE PROBLEM!

I told her to talk to both banks "Hardship Department" who should help them to firstly control and then pay out their debt....they got the run around and zero help!

Well both "BIG BANKS" , I've found your social attitude in the words of this song by Bob Geldoff.....the lyrics describe you perfectly!

........I don't care if you live or die, couldn't care less if you laugh or cry, I don't mind at all!

........Couldn't care less if you sink or swim, lock me out or let me in, where you've gone or where you've been, I dont mind at all!

........I don't mind if if the govenment falls, implements more futile laws (carbon tax), I don't care if the nation stalls, I don't care at all!

CHECK OUT THE LINK BELOW!

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Rents rise while home values fall by 2.7 per cent in 201130 June 2011

RP Data – Rismark Home Value Index Release

Capital city dwelling values declined by 0.3 per cent (seasonally adjusted - s.a.) in May, and are down 1.2 per cent (s.a.) over last 3 months. Rest of State house values were also weak in May (-0.1 per cent s.a.) and are off -0.9 per cent (s.a.) over last 3 months. Gross rental yields for Aussie apartments are now 5.0 per cent.

Based on more than 110,000 home sales nationally in 2011, the market-leading RP Data-Rismark Home Value Index for Australia’s capital cities declined by -0.3 per cent (s.a.) in the month of May (or by -0.5 per cent in raw terms). Capital city home values have now fallen for the last five consecutive months with by far the worst seasonally-adjusted result coming in the month of January (-1.2 per cent), which accounts for 45 per cent of the 2011 decline.

The softening in Australian home values is delivering a valuation dividend with Australia’s dwelling price-to-disposable income ratio falling to 4.2 times, which is its lowest level since June 2003 according to Rismark’s analysis.

RP Data’s research director, Tim Lawless, added “For property investors, rental yields are also improving with RP Data-Rismark’s Index showing that gross Australian apartment yields have now risen to 5.0% (see chart). The best rental yields can be found in Darwin (5.7 per cent), Canberra (5.4 per cent), Brisbane (5.2 per cent) and Sydney (5.2 per cent). The worst yields are in Melbourne (4.2 per cent), Adelaide (4.6 per cent) and Perth (4.9 per cent).”

Over the three months to May 2011 dwelling values in Australia’s capital cities have retraced by -1.2 per cent on a seasonally-adjusted basis. In raw terms, dwelling values have fallen by -1.3 per cent. The quarterly rate of decline has, however, moderated since the end of March when home values were off by -2.0 per cent care of a flood-affected January.

Over the 12 months to end May, Australian capital city dwelling values are now down -2.3 per cent (seasonally-adjusted). If we just look at the first five months of 2011, Australian home values have stepped back by -2.7 per cent.

Across the capital cities performance has been varied and counter-intuitive to the purported resources boom. Sydney is the only market to have recorded a modest capital gain over the last year (up 1.0 per cent). Homes in Canberra have also held ground (-0.1 per cent over the year). All other capitals have slipped into the red, with some down by significant margins.

According to Tim Lawless, the two weakest results have been Perth, where dwelling values are down -7.5 per cent year-on-year, and Brisbane, which is off by -5.9 per cent over the year.

“After extraordinary capital gains in recent years, Darwin (-3.2 per cent) and Melbourne (-2.9 per cent) have also both experienced small corrections. Interestingly, in the last three months the laggards have again been Perth (-4.2 per cent), Melbourne (-1.8 per cent), and Brisbane (-1.4 per cent)” Mr Lawless said.

RP Data-Rismark’s Rest of State Index captures the 40 per cent of all homes not located in the capital cities. The Rest of State areas have had smaller peak-to-trough swings in value since 2007. Over the three months to end May, Rest of State house values were down -0.9 per cent and -1.4 per cent over last 12 months.

The national median dwelling price in capital cities is $470,000 based on sales over the three months to May. Sydney is the most expensive market, with a median dwelling price of $522,000 followed by Melbourne ($500,000). The cheapest cities continue to be Hobart ($315,000) and Adelaide ($382,500). In the Rest of State markets, the national median dwelling price is a far lower $325,000. Across all Australian regions, the median dwelling price is currently $420,000.

Reflecting on Australia’s patchwork economy, RP Data’s Tim Lawless commented, “Despite what appears to be fairly strong fundamentals, the Perth housing market doesn’t appear to be turning just yet. For a city that is recording rapid population growth, low unemployment and a large private capex boom, house prices have nevertheless been contracting since late 2007 after years of above average capital growth in the pre-GFC period. Today the critical missing piece of the puzzle seems to be buyer demand.”

The trend of premium markets taking the brunt of the market correction has continued, with the top twenty per cent of capital city suburbs ranked by price recording a fall of 3.9 per cent over the 12 months to end May compared with a fall of -0.9 per cent across the cheapest 20 per cent of suburbs and -2.3 per cent within the broad ‘middle’ 60 per cent of the market.

According to Tim Lawless the weakness across equities markets is likely to be an important factor affecting the premium housing market: “The S&P/ASX 200 Index remains almost 35 per cent below its November 2007 peak and the index is down 8 per cent since the start of April. The top end of the market clearly benefitted from the circa 40 per cent rise in share prices following the trough in March 2009. However, the recent share market weakness is affecting premium demand.”

Ben Skilbeck, Rismark’s Joint Managing Director, added, “Demand for Australia’s luxury homes has also been sapped by the surging currency, which has made local housing much more expensive for expats located in Europe, North America and Asian countries with US dollar currency pegs to buy. Financial markets are currently pricing in a decent chance of an interest rate cut over the next 6-9 months. If the RBA does indeed reduce rates, this would provide substantial support to the market. However, our central case remains that rates are heading up, not down, and thus we are not looking for any capital gains in 2011. That said, total returns will be boosted by very solid growth in rents, with gross yields in May now at 5.0% for Aussie apartments. Rental vacancy rates remain very tight, so we expect to see further improvements in rental returns.”

According to Mr Lawless, the soft market conditions reflect a weak level of consumer confidence across the country. “Consumers are well and truly focussed on saving, not spending. Despite the low rate of unemployment and the strength of the resources sector, it is clear that the average Australian is content to pay-down debt and wait for some economic certainty to return. As a consequence, transaction volumes in the real estate market are about 20 per cent below the five year average and listing volumes are about 25 per cent higher than what they were last year.”
Media enquiries contact:

RP Data: Mitch Koper, corporate communications manager

Rismark: Ben Skilbeck, joint managing director Key statistics, tables and graphs available in the PDF http://www.rpdata.com/images/stories/content/pressreleases/rp_data_rismark_home_value_index_jun_30.pdf(332kb).

Top 10 tax return mistakes to avoid

1/07/2011 It’s that time of year again: Eddie Chung (Your Investment Property) reveals the common mistakes investors make when claiming tax deductions on their investment property. 1: Repair or improvement? There is a fundamental difference between a repair and an improvement – the former is tax-deductible, but the latter is considered capital and therefore not tax-deductible. An easy way to determine if something is a repair or an improvement is to ask the question – did the work done restore something back to its original condition or did it improve it to a condition that is beyond its original state? If the answer is the former, the cost will be tax-deductible, provided that the work does not constitute initial repairs. On the other hand, improving something to a state that is beyond its original condition is also capital in nature, which is not tax-deductible.  2: Non-deductible costs  Just because something is not tax-deductible does not mean it simply fades into the tax black hole and is therefore “dead money”.  You need to bear in mind that any work done on a property that is capital in nature may still attract some tax perks. If the thing acquired is a free-standing functional unit, it may be classified as a depreciating asset on which you may claim a depreciation deduction.  If the thing acquired is affixed to the building, it may constitute “construction expenditure” on which you may claim a building allowance deduction.  If worst comes to worst and the expenditure does not fall under either of these categories, it may still be included in the cost base of the property, which may reduce the future capital gains tax payable if the property is sold. 3: Building allowance  You are generally allowed to claim an annual building allowance of 2.5% or 4% on the construction expenditure incurred on structural improvements that is attached to land. However, construction expenditure is not synonymous with the amount one pays to acquire the property. It is the capital expenditure originally expended to construct the building or improvement.  In other words, you cannot claim the building allowance on the contract price, for instance.  Rather, you need to ask the vendor to provide you with the remaining balance of construction expenditure that may be claimed (the vendor may already have claimed some building allowance in respect of the construction expenditure).  Alternatively, a lot of people are not aware that they can buy a depreciation report from a qualified quantity surveyor to substantiate their claim, which is generally accepted by the tax office.  Such a report generally costs about $500, which will pay for itself. 4: Interest is interest is interest Most people assume that any loan drawn down that is related to their rental property is immediately tax-deductible.  While this is generally true, the deductibility of interest is contingent on a strict tracing of loan funds to determine if they have been used for an income producing purpose.  For instance, if someone withdraws funds from a redraw account and uses the funds to buy a home, the interest on the funds will not be tax-deductible, even if the redraw account was originally established to buy a rental property.  The purpose of the redrawn funds, in this instance, is treated as relating to the acquisition of the private residence, which will render the interest incurred on the borrowed funds non-deductible. Another common situation is when borrowed funds are used for mixed purposes.  Obviously, the interest incurred on such a loan account will not be wholly tax-deductible and an apportionment of the deductible portion of the interest is required. However, it should be noted that if any repayment is made on the loan, the repayment will also need to be apportioned between the private and income producing purposes on a reasonable basis, which may be a point of challenge by the tax office.  That is why the best thing to do is always to have separate accounts for private and income producing funds. 5: Borrowing costs  Another mistake people often make is that they either include the borrowing costs associated with the acquisition of the property in its cost base or they claim the total borrowing costs outright as a tax deduction.  Neither of these is the correct treatment of borrowing costs. The correct treatment of borrowing costs is: if the amount incurred is less than $1,000, it may be claimed as an immediate tax deduction.  If the amount exceeds $1,000, the amount will need to be claimed progressively over the life of the loan or 5 years, whichever is shorter.  6: Legal fees  Legal fees related to the purchase or sale of a property are included in its cost base and are not tax-deductible.  However, legal costs incurred to deal with the day-to-day operation of the property, eg, drawing up a lease, disputing with tenants, etc, are tax-deductible, as is qualified professional advice and assistance that is attributable to managing your taxation affairs.. 7: Body corporate fees  Most property investors seem to think that body corporate fees are categorically tax-deductible.  While this is generally true for regular body corporate fees that are essentially funds used by the body corporate manager to manage the day to day operation of the property, special levies and sinking funds that are used to fund capital improvements on the property are not tax-deductible even though they are usually included in the normal quarterly body corporate fee invoices.   8: Travelling expenses to inspect property  I cannot recall the number of times when I overheard people boasting about the tax-deductible holiday they just had as they were claiming the travelling expenses as a tax deduction on the basis that they were costs incurred to inspect their income producing property.  It is without a doubt that bona fide travelling expenses incurred by say a landlord to inspect their rental property is tax-deductible.  However, the availability of the deduction is contingent on the extent of the income producing purpose behind the trip.  For instance, if your primary intention to travel to a particular location is to inspect your property but you also intend to use the opportunity to go on a holiday, there will be multiple purposes behind the trip, which means that the associated travelling expenses will need to be reasonably apportioned and only the income producing portion of the expenses should have been claimed in the tax return. 9: Available for Rent? An expense is only tax-deductible to the extent that the property is used for an income producing purpose.  Therefore, if a property is not available for rent for a part of the year, the expenses incurred on the property for that year will need to be apportioned.  This apportionment is often not taken into account in the tax return, which will pose audit risks if the tax office decides to review the claims. You need to distinguish between a property being not available for rent and a property being left vacant but is available for to rent. The latter generally does not give rise to a need to apportion the expenses because so long as the property is available for rent, its purpose remains income producing, even though it is temporarily not tenanted. To determine if an untenanted property was available for rent, the tax office generally looks for evidence to see if the property was being actively marketed to procure tenants. Therefore, evidence such as advertising agreements with real estate agents in respect of the untenanted period will become very useful. 10: GST  Residential property leasing does not attract GST, but the leasing of commercial properties does so if the landlord is registered for GST or is required to be registered for GST.  That is why investors who move from investing in residential properties to commercial properties are often not aware of the GST implications of their newly acquired commercial properties. Generally, if you own commercial properties and the combined projected annual rent of these properties will exceed $50,000, you are required to be registered for GST.  This will also mean that you are automatically liable to GST on 1/11th of the gross rent, which must be paid to the tax office. On the other side of the coin, you may claim back the GST included in the expenses you incurred on your commercial properties.  In addition, there may also be GST implications associated with the purchase and sale of commercial properties.  Professional advice is highly recommended, as the relevant law is relatively complex.  If you own commercial properties and are required to be registered for GST, you will need to ensure that the amounts you report in your tax return in respect of the properties are GST-exclusive.

Sydney in dire need of new housing

 

Friday, 17 June 2011

Matthew Sullivan Ten new suburbs need to be created each year in order to meet the growing housing shortfall across Sydney, leading property group Raine & Horne has claimed. According to the latest ANZ Australian Property Outlook, the average number of housing completions has declined by 25,000 per annum over the last decade. In 1999/2000 there were 51,500 housing completions in Sydney and just 25,500 in 2009/10. “Put another way, this shortfall equates to a failure to build the equivalent of up to 10 new Sydney suburbs per annum,” Raine & Horne chief executive Angus Raine said. On a more positive note, Mr Raine said the housing shortage combined with interest rate stability, increased immigration and low vacancy rates, will keep Sydney real estate front of mind for investors. Mr Raine is urging would be investors to buy sooner rather than later, and to consider quality homes that are handy to amenities such as shopping centres, schools, public transport and motorways. "If you find a quality home that ticks plenty of boxes, then it is a fair bet you’ll have secured a property investment that can potentially generate consistent cash flow and long term capital growth.”

Stuck with a lousy mortgage? Refinancing your loan could save you almost $14,000!

Your Investment Property Editor

14/06/2011 Home loan defaults are climbing across the country, but there is a way to relieve mortgage stress. Refinancing your loan could save you almost $14,000! An increasing number of Australians are falling behind on mortgage payments. Fitch Ratings reveals a 30% increase in arrears during the three months to March. While homeowners received another rate reprieve from the Reserve Bank of Australia in June, there is a way for borrowers to take matters into their own hands and significantly reduce their own mortgage stress. The latest issue of Your Investment Property’s sister title, Your Money Magazine reveals refinancing your mortgage can save you thousands of dollars over the life of your loan - and there’s never been a better time to consider your options. Over the last few months, lenders have been aggressively competing with each other in the home loan market in an effort to boost market share. A Mortgage Industry spokesperson Kristy Sheppard noted, “There are some highly competitive deals on the table for new borrowers just as there are for those looking to refinance. Get out here and get amongst it if you’re looking to enter the market. Take a good look around.” She adds, “Anyone who hasn’t at least explored their options could easily be giving themselves a raw deal by simply going with their everyday lender or ignoring the possibility of switching to a better suited or more affordable home loan.” Is it for you? Refinancing isn’t for every homeowner and there are a couple things you should look at before you consider what else is out there. Step 1: Review your loan – check your rate, fees and other costs              Step 2: Compare up-to-date information on what’s available in the market. Call us and we can provide you with suitable product options. When comparing loans, be sure to look beyond the rate. Other criteria that might be important to you: the comparison rate or AAPR loan flexibility loan support/service loan term Lenders Mortgage Insurance implications extra important features: offset account, redraw facility, professional packages  If your review reveals there is a better deal for you, then it’s time to look at the numbers. The best way to break it down is to make these calculations: How much interest will the new loan save? How much it will cost to get out of your current mortgage? How much it will cost to set up new mortgage? We can calculate the savings for you and provide you with a cost estimate and the best product options to suit your current and future needs. If the interest saved outweighs the costs to get out of your current mortgage and set up a new one, then refinancing could be the next best step. (Loan calculators and tools can be found here http://www.beatthebanks.com.au/calculators

Tips to attract top tenants

10/06/2011 Smart investors know the value of a good Tennant! The average weekly rent in Australia is $450; over a year that’s $23,400. But a good tenant goes beyond what they’re paying in rent. You also want someone that will take care of the property, respect the neighbours and rent long-term. Even though the national vacancy rate is a relatively tight 2.2% - good tenants can be hard to come by.   The trick is: how do you find them?   To attract quality tenants you need to offer a quality property. Here’s a guide to considerations you need to make before you purchase your property, after you buy and during the tenant search.   Purchasing a rental property There are several considerations to make when purchasing a rental property, but if you’re looking to attract quality tenants then location will play an important factor.   First off: identify the type of renter you’re hoping to attract and put yourself in their shoes. If you’re hoping to attract students, look for property close to universities, colleges and transportation. If you’re after families, then proximity of schools will play an important role. And if your ideal tenant is a senior, look for property close to community centres, shopping and transportation.   Also look for a neighborhood that you’d want to live in. Is it a quiet road? Are the streets clean? Are the neighbours’ yards tidy? Are the parked cars in relatively good condition? A neighbourhood that is a mix of owner/occupier housing and renters is generally one that will be better kept than a neighbourhood that strictly caters to renters.   Once you’ve determined location, focus on the property itself. Again, think of your ideal renters’ concerns. Students looking for a share house will probably value big bedrooms, as they will spend more time there. Seniors will be looking for something that is one level. And families will be keen on something with a yard, preferably enclosed.   Making the property presentable It goes without saying that the interior should be clean. Keep paint to muted colours – you might love a signature wall in the living room painted bright red, but it won’t be everyone’s cup of tea.   Put new light bulbs in all the fixtures. Nothing gives a room an instant facelift like bright lighting.   In the kitchen, fix drawers so they slide easily and make sure handles on screwed on tight. Get rid of stains, crumbs and mould. Lining the cupboards can cover a few sins. Invest in quality appliances and if you can’t afford new appliances, see what you can do to make them more presentable. For instance, new wire racks in the oven will go a long way in approving its overall appearance.   In the bathroom, consider buying a cheap, but new vanity. Installing a new toilet seat would also be a good touch. And a bright mirror is a definite must.   Renting it out If you choose to rent the property out yourself, then there are a couple of things you can do to increase your chances of picking a good tenant.   One is to be honest in the ad. If you oversell its attributes, good tenants might get turned off and overlook the genuinely positive aspects of the property.   And don’t be greedy. Gauge how much similar properties in the area are renting for and price accordingly. If you overprice, you might find yourself with a tenant that is desperate to find a place because no one else would rent to them based on their history. And avoid increasing the rent too much. You’ll just encourage turnover and you could end up out of pocket for a considerable amount of time.   Be presentable. If you’re showing the property, make sure you look like someone the tenant would want to deal with. Let them know you would respond to needs quickly, but you’re not going to be visiting the property all the time.   Have a formal application that includes rental history and make sure you check references that include their employer and previous landlords/property managers.   If you decide to use a property manager, make sure you investigate their services thoroughly. Consider how they market properties, how they deal with issues such as arrears, repairs and maintenance, and how frequently they will inspect the property.   Landlords insurance Sometimes you can do everything right and still end up with a bad tenant. Landlord insurance can take some of the stress out of renting by covering damage or loss to your property, protection against unpaid rent, theft or malicious damage, and even the cost of replacing or repairing furnished properties

Interest rates on hold for now

Your Property Investor Editor

10/06/2011 The RBA has decided to keep the official cash rate at 4.75% for the sixth month in a row. The decision comes as little surprise to observers who predicted that a sharp 1.2% fall in GDP during the March quarter would influence the RBA’s decision, and RBA governor Glenn Stevens admitted as much in his official interest rate decision statement. “The floods and cyclones over the summer have reduced output in some key sectors. As a result there was a sharp fall in real GDP in the March quarter, despite a solid increase in aggregate demand,” he said. He added that “close to target” inflation levels over the next 12 months were likely, raising hopes that rises will be off the agenda in the near-term, but economists are still tipping an August rate hike. In the meantime, the decision has drawn cautious praise from property industry insiders, with HIA senior economist Andrew Harvey calling it “a rare bit of good news amidst mounting pressure on home affordability and fast-declining activity in the residential building sector." “It just gives a touch of relief to those Australians paying off mortgages and also to those trying to enter the housing market, amidst the less predictable environment households face in the post-GFC era,” he added. The RBA’s next interest rate decision will be made on 5th July.

Investors strike back in subdued property market

Your Investment Property Editor

10/06/2011 Property investors seizing opportunities in the current buyers’ market has contributed to an 18.8% increase in mortgage sales during May. According to AFG, Australia’s largest mortgage broker, sales for this May have bounced back to within just 1.7% of last year’s May figures after patchy sales results during the natural disaster-affected first quarter. “Property investment has remained at consistent levels throughout the ups and downs of the property cycle, but strengthened significantly in May,” said AFG general manager Mark Hewitt. AFG’s figures show that investors have been steadily more active in the market over the last few months, increasing their share of all mortgage sales by 2.6% between February and May. First home buyers' market share dropped by 1.4% over the same period. “It is certainly a buyer’s market right now, and investors looking at rising yields are probably better insulated from the impact of rising interest rates than other types of buyers,” added Hewitt. Victoria and New South Wales saw the biggest month on month upswings in mortgage volumes, increasing by 27.2% and 23.3% respectively. Both states also had the highest proportion of investment loans with 38.8% of loans in Victoria and 37.9% of those in New South Wales, processed for investors. May also saw a surprise increase of investment loans in Queensland, up to 36.5% - its highest such figure for well over a year. The proportion of fixed rate loans rose slightly to 8.4% from 6.4% in April as more buyers chose to lock in rates.

SECOND CHANCE FOR OLDER BORROWERS

31/05/2011 A decline in housing affordability and increased difficulties saving a deposit has shifted the average age of first home buyers upwards. In the 2010 Mortgage Choice First Home Buyers Survey, 55% of respondents indicated they will be aged 30 years or older when purchasing their first property. But older property virgins face another difficulty when it comes to securing a home loan – age discrimination. In an effort to comply with new responsible lending obligations, lenders have been rejecting middle-aged applicants who lack adequate superannuation savings. As a result, ASIC has stepped in to issue guidance for lenders asking them to loosen their credit policies.  "We are concerned by reports of older borrowers whose employment will reduce, or cease, before the end of the loan term, being refused loans because some lenders are adopting an unnecessarily restrictive approach to meeting the responsible-lending requirements," ASIC commissioner Peter Boxall said in a statement. He added that older borrowers often have a variety of assets other than those from employment which could be used to service a mortgage. Guidelines in the new National Credit Act came into effect 1 January this year. While the law has not changed, ASIC’s revised guidelines addresses lenders affirms older borrowers right to access credit. ASIC has updated RG 209 to include clarification that reasonable enquiries into a borrower's financial situation can reveal other means by which a loan can be serviced, even when there is no continued income stream. It has also provided new guidance on issues which should be considered by lenders when assessing a borrower's ability to repay a loan. Boxall said responsible lending should not keep people from securing housing finance on the basis of age. "The new responsible lending requirements in the National Credit Act are an important protection for consumers, but they should not be an inflexible barrier to credit for any segment of the population, and should not prevent consumers obtaining credit that they can reasonably afford."