Posts by Sandra Morris


Lifestyle: What Is A Home Equity Loan?

When you are looking to renovate or buy a second house, home equity loan might be a good idea. What is home equity loan, and how can you benefit from it? Let’s look deeper.

Home equity loan – what is it?

According to, home equity loans (or lines of credit) “are given to the home owners to renovate their home or to buy a second property. Home equity is the difference between the value of your home and the money you owe.”

For example, if you owe $200,000 and your home’s worth is $600,000, your home equity limit would be $400,000. You would be able to apply for a loan of up to $400,000.

As yourmortgage explains, the amount of interests you need to pay depend on how much money you are drawing out. For example, if you take out $100,000 to purchase a car, you would only need to pay interests calculated based on this amount instead of the whole $400,000.

The benefits of home equity loan

“People are using home equity for what they need [rather than] what they want,” Kelly Kockos, senior vice president of home equity for Wells Fargo said.

Home equity loans are mostly used for durable purposes, such as house renovating, vehicles, aged care accommodation and more.

The interest rates for home equity are also generally lower (ranging from 3.5-4.5%) than personal or credit card loans (starting from 6%).

Home equity loans also enable you to access large amount of fund that you can use or save to reduce interests. You have flexibility in managing repayments – it enables you to pay more than the minimum if you want to shorten the loan term.

The risks of home equity loan

You will need to be mindful about your daily transactions, as you have access to large amount of additional funds. If you are impulsive in making financial decisions, home equity loan might not be the right choice as it can increase your debt significantly.

Using home equity loan for investment or to lend to other people (e.g. relatives and family members) is also not recommendable, as you will be risking your own home in the process.

Oil rig

Market: Oil Prices Fall Following Iraq’s Backtracking on OPEC Output Curb

Oil prices have fallen following Iraq’s statement that it sought to be exempt from the OPEC’s planned output cuts, as the group seeks to stabilise crude market.

Iraqi officials were reported on Sunday saying they would not reduce output, which is currently at 4.77 million barrels per day, because the country needed more fund to fight Islamic State militants.

Oil prices fluctuate around US$50 per barrel, mostly down 30 cents or 0.6%. West Texas Intermediate for December delivery dropped 33 cents to close at $US50.52 per barrel on the New York Mercantile Exchange. Brent fell 32 cents to $US51.46 per barrel.

Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), behind Saudi Arabia.

“Iraq’s request to be exempted from a deal to cut output has further clouded the prospect of OPEC strategy to stabilise the oil market succeeding,” said Danske Bank analyst, Jens Naervig Pedersen.

“There is a risk that Iraq’s refusal could trigger a domino effect that other producers would ask to be exempt from the cuts too,”  SCI International energy analyst, Gao Jian said.

OPEC members Iran, Libya and Nigeria expected to be spared from the deal. “If they do nothing, OPEC production next year is likely to average at least 34 mbpd (million barrels a day) with a real threat of it reaching close to 35 mbpd if the chaos in Libya and Nigeria were to be resolved,” broker PVM said.

OPEC produced a record of 33.75 million barrels per day in September, with Saudi Arabia producing 10.58 million of them.

coins finance

Global Economics/News: China’s Slowdown Is Biggest Economic Threat

China’s slowdown is the biggest threat facing global economy, former chief economist at the International Monetary Fund (IMF) told BBC.

Current Professor of Economics at Harvard University and former IMF economist Ken Rogoff said the economy could be “slowing down much more than the official figures show.”

“Everyone says China’s different, the state owns everything they can control it,” Rogoff said. “Only to a point. It’s definitely a worry, a hard landing in China.

“If you want to look at a part of the world that has a debt problem, look at China. They’ve seen credit fuelled growth and these things don’t go on forever.”

A Reuters poll shows that China’s economic growth next year is expected to slow down to 6.5 per cent, compared to this year’s 6.6 per cent.

The decline in global demand has resulted in the country’s exports falling 10 per cent year-on-year in September. Analysts also expect the increasing national debt levels to trigger a new financial crisis.

Furthermore, private investment has continued to drop. “The slowdown in private sector investment over the past years means that the organic growth momentum of the economy may have declined, requiring policymakers to be more vigilant in terms of keeping policies as supportive as possible,” said economists at HSBC in a statement.

The Chinese government has allocated more spending to provide fiscal stimulus, cutting lending rates six times since November 2014 and lowering banks’ cash reserve requirements to 17 per cent. However, analysts believe the government’s effort to increase liquidity in the market will not help much, as investors are more likely to save than make new investments.


Lifestyle: How To Plan A Good Wedding (On A Budget)

Your wedding day is one of the most important days in your life. However, this does not mean that you should spend all your savings for this day without preparing for what comes next: marriage life. Apart from financial prudence, many of us also could not afford to spend a lot of money for the ceremony and reception. At a time when weddings cost over $30,000 on average, a beautiful wedding could leave you with a lot of memories to cherish, but budgeting would truly help you live for your days ahead.

The wedding industry has also been known for charging customers with “wedding tax” – extra cost for weddings compared to other events such as birthdays and family reunions. This makes it all more important to prepare wedding budgeting properly.

So here is a tip to plan a good wedding on a budget:

When preparing your wedding, choose the more cost-efficient options for every aspect of the wedding, or give them up altogether depending on your priorities, eliminating some costs permanently.

For example, opt for ready-to-wear wedding dresses instead of custom-made ones, which could be three to four times as expensive.

Instead of photographers from established companies, hire a student photographer to capture the moments from the event. The same goes with musicians and catering – there is an abundance of local music graduates and hospitality students ready to serve your wedding for a very competitive price.

You can also hire the venues for four hours instead of six, and set the date on a Thursday or Friday instead of the weekends.

Paper invitations and RSVPs could also be a bit expensive – some people have opted for all-digital cards, meaning you will save cost and help the environment.

Ask for help from families and friends for the things you need, be it transports, hair and makeup, or making bridesmaids’ dresses.

Professional service might not always be the best, especially when it comes to affordability – make sure you look into all your options before spending some money.

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“Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”
― Abraham Lincoln