If you’ve been putting all your extra cash into your home loan, well done. Paying your loan off sooner could potentially save you a lot of money on interest. However, owning a safe and reliable car is just as important, particularly if you have a family or need to travel a distance to work. So if you need a new car, how can you afford it if your home loan has been your priority? Is there a way to get the best of both worlds? The answer is yes!

How does it work?

If the equity in your home has grown significantly because you have been paying off your loan for a while, have made extra repayments, or the value of your home has increased, then you may be in a position to refinance your home loan to access your equity. This could give you enough cash to go down to a dealership and buy that new car. Having cash-in-hand may even give you a little extra bargaining power!

Whilst refinancing may mean that your home loan repayments increase somewhat, the increase could potentially be less than the cost of a car loan repayment and your mortgage repayment combined. Car loans and personal loans tend to carry a much higher interest rate than your mortgage. Depending on where you get your car or personal loan, you could pay anything from 6.5% p.a. up to 14.5% p.a. in interest. (Always talk to us before taking out any kind of loan to be sure you’re getting a suitable loan for your needs at a competitive rate.)

Talk to us and we’ll help you to assess your financial position on your loan to see if it is the right move for you.

What are the drawbacks?

It’s important to be aware that if you take some equity out of your home loan, your home loan repayments are likely to increase. You probably won’t be paying as much as you would if you had a separate car loan and a home loan as well, but if you take the full 30-year term to pay it off, it may cost you more in interest over the life of the loan. So if you decide to access your equity to buy a car, we recommend that you make additional repayments and pay it back as quickly as you can. This will help you to maximize the benefit of the lower interest rate you get by using your mortgage rather than a car or personal loan.

Talk to us first

Before you make any large purchase that may require a loan, it’s important to talk to us about your finance options so we can help you find a solution that’s right for you. We’ll help you decide whether refinancing and using your equity to buy what you need is a viable option, or if another type of finance could be more suitable. And above all, remember that car dealerships only offer one type of finance, whereas we offer a variety of finance options that can be tailored to suit your personal financial circumstances and goals – so always talk to us first. We’re here to help you achieve your financial goals, so call us today.Could the equity in your house buy you a new car?

Spring has sprung and isn’t it a glorious time of year? It’s traditionally the time for change and new beginnings! If you’ve been considering a property purchase, now could be the time to get out there, enjoy the sunshine and start your property hunt.
Perhaps you’ve been considering refinancing to a fresh new mortgage that’s tailored specifically to your needs? Or perhaps you’re thinking of renovating your existing home? If so, we’d love to help you out. As the property market heats up, we are seeing plenty of competitive lender deals, so be sure to speak to us about your loan options before you start on your spring property plans!

Interest Rate News

This month, the Reserve Bank of Australia decided to keep the official cash rate on hold at 1.5%. Lenders continue to cut rates for owner-occupiers on principal and interest home loans, and at the same time, try to ensure the proportion of their loan books for investment purposes and interest-only loans meet APRA’s lending guidelines. Despite these restrictions, some lenders have cut interest rates for investors on principal and interest loans in recent weeks. Overall, interest rates remain low and there are competitive deals for both home owners and property investors.

Property Market News

Last month, dwelling values increased by 0.11% overall across the combined capital cities. Sydney’s growth was flat during August, while Hobart led the way for growth in dwelling values, at 0.61%. Hobart was also the strongest capital city performer for the past 12 months (13.61% growth). Canberra experienced 0.57% growth in August, while Melbourne remained resilient, with property values increasing 0.54%. Brisbane and the Gold Coast saw an increase of 0.18% for the month, and in Adelaide property values edged 0.03% higher. Perth’s dwelling values slipped -0.83%, while in Darwin they fell -2.17%.

Auction volumes remained high in Victoria and New South Wales, with 1987 combined scheduled auctions in the week ending September 3. Both had relatively strong clearance rates of 73% and 70% respectively. Across the other auction markets, clearance rates were varied. Tasmania had 10 scheduled auctions, with an impressive 100% clearance rate. The ACT had a 68% clearance rate for 69 scheduled auctions, while South Australia’s clearance rate was 62% for 80 scheduled auctions. In Western Australia, 28 properties went to auction, but only 58% sold, while in Queensland there were 292 scheduled auctions, with a clearance rate of 36%.

If you have property plans this spring, talk to us about a competitive home loan, investment loan, or renovation loan that works to your advantage. We’ll compare the market and line you up with a mortgage that ties in with your personal financial circumstances and goals. Please get in touch today – we’d love to help!Welcome to our September Newsletter

Australians are a nation of investors. Over 60% of us hold additional investments outside of compulsory superannuation and increasingly, property is one of our most popular investment choices. But why? And is it the right form of investment for you?

If you’re not sure, the sooner you talk to a qualified Financial Planner the better! And if you don’t have one, ask us for a referral to a reliable professional who can help you come up with an investment plan that’s right for your personal circumstances and goals. To get you started, here are six reasons why an ever increasing number of Australians are considering a property investment.

1. Supply & demand.

The value of any given commodity is subject to the law of supply and demand. When demand is greater than supply, the value goes up. Therefore, investing in something people need or really want is generally considered a good idea. Everyone needs somewhere to live, and most of us want to own our own home, which is why many Australians consider property to be a good investment type.

It may seem a bit over-simplistic, but the statistics tend to support this popular opinion. For example, 2016 figures from the Victorian Department of Environment, Land, Water and Planning estimated that Melbourne’s population will double by 2031 and hit 10 million people by 2050.

2. You have greater control over managing your investment.

When you invest in a property, you are in charge of that asset. You can do things to affect the property’s ongoing capital growth potential, like keeping it in good repair and up to date, and you can choose the right tenants to maximise your rental income. You may also have some potential to affect the end value of the asset – by getting it rezoned for development purposes, or performing extensions or renovations, for example. You can also take out insurance on the asset, which can help to insulate you against some of the financial risks of property ownership.

By comparison, with stocks and shares, value growth is subject to the success of the company and a variety of other external factors which are usually beyond your control. These uncertainties may influence some people to prefer a ‘solid’ asset like bricks and mortar.

3. You can easily assess capital growth potential and invest accordingly.

When investing in property, careful research will help you to choose a suburb or area that has capital growth and rental income potential. This information is relatively easy for the average person to acquire. (For example, we can provide you with a variety of reliable reports, as will most banks, and there is a variety of other property data suppliers online.) By contrast, assessing the capital growth potential of other kinds of assets is much more complex and often requires expert analysis, or access to information that isn’t as easy to obtain.

With property, some areas have more potential than others, so smart investors spend time locating and investigating opportunities that could align with their investment strategy. For example, you can research future population and employment growth in an area, transportation links and future infrastructure development, lifestyle amenities, schools and other factors that are likely to make the area popular with buyers and tenants down the track.

4. You can access the equity to continue growing your wealth.

Property investment can be like an “investment money tree” because it is possible to access the equity (or capital gains) as you go along by refinancing, without being liable to pay tax until you actually sell the property. With an investment property, equity is created as soon as it increases in value or your tenants pay down your mortgage somewhat, so you can often plan to access your equity (subject to refinance approval from a lender) for your next investment. You could use that money to buy any kind of investment, not just property, which is why property is often considered a good way to start an investment portfolio. If you’re interested in refinancing a property to access your equity, just give us a call.

5. The opportunity to diversify your portfolio.

When investing, a good Financial Planner will probably tell you that it pays not to keep all of your eggs in one basket. Including property in your investment portfolio could potentially provide an opportunity to spread your risk. And in itself, property investment provides opportunities to diversify your investments. For example, you could invest in a variety of locations and in different types of properties – vacant land, apartments, units, houses, rural or perhaps commercial properties. Talk to your Financial Planner for suggestions on how to create a diversified investment portfolio that takes your personal appetite for risk into consideration.

6. You can take advantage of tax breaks and super.

Another advantage of property investment is that it is supported by a variety of tax breaks and government incentives to help people grow wealth. There are many different ways you could potentially benefit, depending on your personal situation, tax obligations and other financial circumstances. Talking to your Mortgage Broker and Tax Accountant to find out more is a great idea, because the benefits are different for everyone and no-one wants to give their money to the tax man when they could be using it to fund a better retirement.

What to invest in is an age-old debate and property investment may not be the right choice for everyone. But if you’re keen to join around 1.7 million Australians who choose to invest in property, we’re here to help! We’re happy to work with you, your Financial Planner and your Accountant, and then arrange the appropriate financing to meet your financial circumstances, needs and investment goals. Please get in touch, we’d love to hear from you!

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. All loans are subject to lenders terms and conditions – fees, charges and eligibility criteria apply.6 Reasons why property investment is more popular than ever

How to Spot a Good Fixer-Upper
Buying to renovate and sell can be a lucrative investment strategy, allowing investors to potentially make a fast profit with minimal effort and expense. However, the key is to find the right fixer-upper – one that gives you a maximum increase in value for minimal expenditure. Cha-ching!

As your mortgage and finance broker, we love to pass on juicy tips that ultimately help you to use your property investment dollars wisely. So, how do you spot that diamond in the rough that will become your renovation goldmine? Well, it takes a good deal of detective work, a resourceful imagination and some logical reasoning when it comes to renovation spending. Right, time to channel Sherlock, folks!

Step 1: Narrow down your leads

Finding the right location is paramount for any property purchase. The aim is to target run-down properties in suburbs with solid growth potential. Ultimately, the property should be close to amenities such as schools, shops and public transport, but not so close to the train line that the front door rattles all night long!

If you’re buying for investment purposes, always remember your end-goal, which is to sell post-renovation. Research what’s in high demand in areas you’re interested in, as well as the value of renovated properties in the suburb. Searching for phrases like “renovator’s dream” and “deceased estates” in real estate advertisements will narrow down your options.

Step 2: Follow the clues and do your detective work

When you find a potential fixer-upper, you need to quickly develop a keen eye for detail. Research the neighbourhood thoroughly and investigate any external issues that could affect your investment. Is the area flood-prone? Is there a high crime rate that could impact upon liveability? Is there noise pollution? Lastly, consider any legal or heritage restrictions that could put a dampener on your renovation goals.

Once you have ruled out potential external glitches, it’s time to concentrate on the finer details and test out your powers of observation. Is the structure sound and are the roof, walls, doors and windows in good condition? Are the foundations strong? Are there any issues with the electrics and plumbing of the property? The last thing you want is to be paying through the roof for non-cosmetic upgrades. It’s a good idea to invest in a pre-purchase building inspection and study it with your trusty magnifying glass.

Step 3: Consider different scenarios and mastermind your makeover

Warning: this may require a good deal of imagination! Being able to overlook retro linoleum floors and garish wallpaper can be tricky, but keep in mind the golden rule of renovation: minimal effort, maximum returns. Cosmetic enhancements that will drive up the value of the property are what you want. Flaky paint, scruffy carpets, old cupboards and dated bathroom fixtures can all be upgraded with minimal effort and cost. Many experts recommend seeking out properties with older bathrooms and kitchens that can easily be renovated.

Also, it’s a good idea to consider the layout and convertibility of the property. Can you add value by playing with the dimensions? Can you knock down walls to create a more open-plan living space, or add walls to create new rooms? Can a puny window be transformed into a spectacular natural light portal? How could you revamp the garden?

A good sleuth knows when to trust their instincts, and if your gut is telling you you’ve found your fixer-upper, it’s time to speak to a reputable mortgage and finance broker like us about how to finance your property purchase and renovations.

Step 3: Close the case

Our final tip is to make sure you stay within budget once you’ve found your renovator’s dream. Don’t overspend on improvements, but don’t skimp on quality either. Spend time and money on renovations that will give you the best return on investment and make the property stand out to prospective buyers.

We hope you’ve found these tips for spotting a good fixer-upper handy. We can provide expert advice about obtaining finance for your property investments and renovations. We’ll analyse the thousands of home loan products out there and test them under our microscope to ensure they measure up. Please get in touch with our team today.

 

 

With another Christmas celebrated and already showing up on our waistlines, a common topic of conversation for many of us in January is our New Year resolutions.

Whether it’s a pledge to give up smoking, get to the gym more often, or start (yet another) healthy eating regime, New Year resolutions usually have a self-improvement or healthy living focus. But what about your finances? A healthy financial situation is just as important to your well-being as a healthy diet and exercise regime. Here are a few New Year resolution suggestions for your finances that could make a big difference to your financial health in 2017 and beyond. If one of these appeals to you, please give us a call as we’d love to help you achieve your financial New Year resolutions this year.

“I will make a proper budget and stick to it.”

Did your credit card debt go up or down in 2016? Spending more than you earn is surprisingly easy to do and having to pay exorbitant credit card interest on all of your purchases just makes matters worse. The secret to turning this situation around is to create a proper budget for yourself and stick to it. It’s also a good idea to include repayments on your credit card as a weekly expense in your budget outgoings, so you can work on getting your debts paid off as well.

To create a realistic budget, list all of the things you need to spend money on and how much they cost. The amount you have left over each week is the amount you can afford to spend on the things you want, put into your savings account, or use to pay off your debts sooner. It’s also important to review your budget regularly to see how you are tracking.

If you have multiple credit card debts, or a variety of debts, you may find managing your budget a challenge as a large part of your income may be lost on interest payments. This kind of situation is frequently referred to as a ‘debt trap’. Talk to us about consolidating your debts to reduce your interest payments and make your financial situation more manageable.

 “I will make an effort to achieve my saving goals.”

The ability to save money consistently is a talent that everyone should cultivate. It’s particularly important if you’re saving a deposit for your first home, as a lender will take your savings history into consideration when deciding if you are eligible for a home loan.

If you are the kind of person who finds it hard to stick to a budget, can’t resist impulse purchases, or indulges in ‘retail therapy’, then you may like to consider installing an app on your mobile phone that supports your efforts to save. ASIC’s MoneySmart website offers a variety of excellent free apps designed to help you manage your finances:

  • TrackMyGOALS integrates techniques that are proven to work for successful savers.
  • TrackMySPEND helps you see where your money is really going so you can adjust your spending habits to save more. Even just committing to reducing the number of take away coffees you buy each week can make a big difference over a full year!

“I will stop wasting my money on rent.”

For many people, choosing to rent a property instead of buying one boils down to a lifestyle choice. It may be more affordable to rent a property in a location where you enjoy living, than it is to buy one. But the consequence of this choice is that when property prices rise, you are potentially missing out on some significant capital gains that could be important to your financial well-being later on in life.

What’s more, the money you spend on rent is wasted – you are potentially paying off someone else’s investment when you could be paying off a property of your own. So the question is: do you have enough money for a deposit?

If you have been saving regularly and have some money in the bank, now is a great time to take stock of what kind of property you may be able to afford this year. Just give us a call and we’ll be happy to sit down with you and help you work it out!

Getting on the property ladder may mean that you have to consider a location where you can afford to buy, rather than a location where you prefer to live. It may mean giving up your short commute home from work, or easy access to your friends and family, favourite bars, shopping venues and cinemas. But with property prices rising steadily, the long-term benefits could have a significant impact on your future financial security and retirement lifestyle, so it could be worth it to act now.

“I will review all of my financial accounts, including my home loan”

When was the last time you stopped to think about how much money you are paying on fees every year for your mortgage, bank accounts, credit cards and superannuation plans? Most people would be horrified to discover exactly how much money they lose every year in fees and charges across their financial accounts – so it definitely pays to review them regularly and cancel any unnecessary accounts you hardly ever use and don’t really need.

For example, the fees and charges you pay on your superannuation accounts can be quite high and they often go unnoticed. Over the years, these fees and charges may add up to make a big difference to the balance of your super on retirement. The fact is, if you have more than one superannuation account, you are paying double the fees you need to pay! Consider consolidating all your super accounts into one as soon as you can.

The same rule applies to your credit cards. How many do you really need? What are you using them for? If you have more than one, it may be a good idea to transfer all of the balances to one card using a free balance transfer offer. This not only has the potential to save you a significant amount of money on fees, it could also save you some money on interest and perhaps, help you to pay off your credit card balances sooner. Don’t be tempted to keep all of the old cards though, remember to cancel them as soon as you make the balance transfer.

If you have a mortgage, now is a good time to look at which features and benefits it provides, and if you are using them. Do you really need them? Is your home loan the most suitable for your current financial goals? If not, talk to us so we can see if you could be saving on fees, getting a more favourable interest rate or accessing the loan features you need!

We can help you achieve your financial New Year resolutions

Our role as your mortgage broker is to help you arrange your credit and finance to maximise the money you have. We’re here to help you save on interest wherever possible. Whether it’s time for a home-loan-health check on your existing mortgage, or you would like to find out how much you can afford to spend on buying a property, you’ll find our expertise and support invaluable in helping you to achieve your goals. We are even willing to help you find better ways to manage your debt and plan to build wealth for your future.

Financial success means setting some financial goals and making a step-by-step plan to reach them. With a credit and finance professional on your team, you are much more likely to get where you want to be. If you would like to buy a property in 2017, then we can help you achieve your goal by assisting with everything from setting your purchasing budget and getting pre-approval on your home loan, to supplying you with insightful property market data so you can locate the right home to buy more quickly.

Make sure your New Year is a happy one by talking to us about getting on top of your finances. It is one New Year resolution you’ll find very easy to keep! Call us to make a time today.

 


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