With a home loan it’s easy to just ‘set and forget’. But it’s sensible to review your home loan every three years or so.

We’re living in a world of rapid change, where interest rates go up and down fast, new lenders emerge and more competitive lending products become available on a regular basis. Under these circumstances, keeping the same home loan for 30 years could cost you more money than you need to spend!

In this article, we provide a step-by-step guide to refinancing your home, breaking it down into simple layman’s terms. But before we get into that, let us clear up a few common questions about refinancing.

WHY should you consider refinancing?

Generally speaking, there are four main reasons to consider refinancing.

  1. Your loan may be outdated and you could potentially get a lower interest rate.
  2. Different home loan features could work better for you.
  3. Your financial situation may have changed.
  4. You want to access some of the equity you’ve built up in your home.

WHEN should you consider refinancing?

There’s no time like the present! We’re currently experiencing a low interest rate period, so there are many competitive home loan products available. Generally speaking, it’s a good idea to review your home loan every two to four years.

WHO should you use to refinance?

You should always talk to a mortgage broker because our opinion is not biased towards any particular lender or product. And we won’t suggest that you refinance if it isn’t the right move for you.

HOW do you refinance?

We’ve explained the when, who and what of refinancing, but what’s the actual process involved? Here’s a simple step-by-step guide.

Step 1: Speak to us

Before we begin exploring your loan options, it’s important for us to have a sound understanding of where you’re at financially and what you’d like to achieve. Whatever your goals, we’re here to assist!

Step 2: Choose your mortgage and apply

We’ll help you find the right mortgage to fit your personal financial circumstances and goals. Then we’ll help you submit your application.

Step 3: Your new lender will perform a valuation

Your new home loan provider will require a valuation on your property as part of the application process. Keep in mind that their valuation might be more conservative than the market value you estimate.

Step 4: Get approved

Within a few days of submitting your application, it’s likely our inbox will light up with that delightful email confirming you’ve been approved for your new home loan. Yay!

Step 5: Your old mortgage will be closed

Your new lender will contact your previous provider to co-ordinate your refinancing arrangement. The lender will submit a ‘discharge of mortgage’ form to the Land Titles Office in your state or territory to close your old mortgage account. Upon settlement, your new lender will pay out your existing lender with funds from your new home loan and take ownership of your property title. If you’re refinancing to consolidate other debts, they will be closed too.

Step 6: You start afresh!

Once you have your new home loan in place, you can begin making repayments, satisfied that you have the most suitable mortgage for your needs. If you need any help managing your new home loan, we are always here to lend a hand.

We hope you’ll find this guide to refinancing handy, and we would love to help you decide whether refinancing is the right step for you financially. Whether you are looking to refinance for a better interest rate, to access equity, consolidate debt or for a property investment to build wealth for your future, we can help you to achieve your goals. Please get in touch today!A step-by-step guide to refinancing your home

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

Making a fresh start in a new family home is an exhilarating experience. Maybe you’ve just welcomed a new addition to the family (congratulations!)? Perhaps your kids have moved out, so it’s time to downsize?

Maybe you’re craving a change of scenery, or you’ve scored a fantastic new job and now’s the time to upgrade your home too. Whatever the reasoning, buying your next family home is an adventure, and we’re here to help make the journey as smooth as possible. Here’s a quick rundown on common mistakes to avoid when buying your next family home.

Mistake # 1: Going it alone

When you decide to buy a new family home, one of the biggest decisions you’ll face is what to do with your old home. Do you sell the property and put the money towards your new digs, or do you turn it into an investment and rent it out? Do you get two mortgages, or refinance your current mortgage to buy the second property? What can you afford and what is best for your future? The questions can seem endless, but don’t worry, you don’t have to solve them all alone – we’re here to help!

Having a professional mortgage broker on your team will make the decision making process much easier. Remember, we have years of experience and access to hundreds of different loan products from Australia’s leading lenders. We can help you assess your financial situation and borrowing capacity to inform your decisions, and then find you a loan that’s exactly the right fit for your current personal financial circumstances and future goals

Mistake #2: Being short-sighted about the future

When the time comes to buy a new family home, it’s important to plan for your family’s future and to think about the kind of living arrangements you may require in the long-run. Often people try to fulfil their current needs, without giving too much thought to where they’ll be down the track. So, for example, if you plan to have three kids in six years, there’s little point buying a new home with just one extra room, as you’re likely to need four! Perhaps you’re a few years off retirement and won’t be needing a huge family home that requires a lot of effort to maintain? Whatever stage you’re at in life, it’s important to plan for what’s on the horizon and to make sure your new home marries with your actual needs.

Mistake # 3: Buying without doing your research first

You’ve bought before, so it’s easy to believe that you have a handle on the property market and don’t need to do any extensive research. But things change rapidly in the real estate world and it always pays to do some thorough research about where and what to buy next.

The goal is to buy a home that will appreciate in value over time and potentially be attractive to tenants if you ever decide to rent it out. You also have to make sure the property and neighbourhood meet your family’s needs, whether that be good schools for the kids, dog-friendly parks for young Fido, great access to public transport for your partner’s work commute, or catering for your needs in retirement. Before buying, make sure you get to know the neighbourhood intimately – research the crime levels, the quality of nearby schools, the transport options and proposed nearby developments, or other facilities you may need like hospitals or treatment centres. Ask us for a property report to help you get started.

Don’t forget to meticulously inspect the property, and to get building and pest inspections done before you put in an offer or bid at auction. We can often help you with referrals to reliable professionals, so please ask us.

Mistake # 4: Letting emotion cloud your judgement

It’s hard not to let your feelings overtake your better judgement when you do find a home that ticks all your boxes, but it’s important not to pay more than the property is actually worth. Compare recent sale prices of similar properties in the area to determine the correct price, and don’t be fooled for a second by clever home staging tactics designed to make you fall in love with the property and sign the contract on the spot!

Lastly, try not to be too sentimental about buying where you currently live. Another neighbourhood could provide you with a property with greater capital growth potential, or more home for your budget to better meet your future requirements and lifestyle.

Remember, we’re here to help!

If you’re ready to buy your next home, please get in touch. We’ll find you a personalised home loan solution, tailored to meet your particular financial circumstances and goals. As your mortgage broker, we can provide advice about everything from maximising your credit facilities to potentially keeping your current home as an investment property. Here’s to new beginnings! We’ll look forward to hearing from you soon. 

Whether you’re a seasoned investor looking for a new opportunity, or you’re after other ways to get your foot on the property ladder, a commercial property investment may be worth considering.

In this article, we explore the reasons why people venture into commercial property investing, and some of the areas to be aware of. And if you do decide to go down the commercial route, we can hook you up with an investment loan that suits your situation and objectives!

What is commercial property?

“Commercial property” tends to conjure up images of dusty industrial warehouses, but it’s a general term that covers all kinds of property that isn’t residential, or is used for some kind of business purpose. That includes everything from offices and retail outlets, to industrial sites and doctor’s surgeries. It can even include car parks!

The benefits of investing in commercial property

Attractive yields

If your focus is on generating income from rents, investing in commercial property may be the way to go. Commercial properties typically return a much higher rental yield than residential properties – usually upwards of 7% return. In comparison, the average residential rental yield across Australia’s capital cities fell to 3.2% in February 2017. (Rental yield percentages are calculated on the amount of rent compared to the cost of the property).

Additionally, the costs of owning and managing a commercial property are usually lower, because most of these costs are covered by the tenant.

Potential to target growth areas

Commercial property investment often provides the opportunity to capitalise on growth areas, both in terms of location and the business economy. For example, a recent report by Deloitte identified that our future business economy is likely to expand rapidly in the areas of communications technology, hospitals and a wide variety of other health industries, food processing, private schooling and education. Hospitality and tourism are other areas that traditionally enjoy steady growth.

What to watch when investing in commercial property

Potentially lower rates of capital growth

While commercial property often provides more attractive rental yields than residential property, the capital growth potential is often not as strong because the land value of commercial premises is usually not as high. This is not always the case, so if you do your research carefully, you may be able to locate a commercial property investment in a growth location. Often it’s the popular shopping and holiday destinations that provide good capital growth potential for commercial property purchases, but these locations can be expensive and difficult to secure, so do your homework.

Associated costs

Goods and services tax (GST) applies when you buy a commercial property, so you need to factor in an extra 10% of the purchase price when you buy. Often investors have to pay more stamp duty for commercial properties than residential properties, too. Properties used in the running of a business are also subject to capital gains tax when you sell.

Additionally, some lenders require a higher deposit for a commercial property investment – 30% instead of the usual 20% recommended for a residential property purchase. But this requirement differs from lender to lender and often depends on the value of the property you want to purchase. To find out more about how much deposit you may require, call us for a chat and we’ll be happy to help you crunch the numbers.

How we can help

If you decide to invest in commercial property, it’s important to have professional advice from your mortgage and finance broker and check with your accountant about the tax implications before you begin. We’re here to help you structure your loan the right way and do all the legwork to help you obtain finance to suit your current financial circumstances and future goals. There’s so much more to know and understand if you’re interested in buying a commercial property, so please get in touch today!Why invest in commercial property?

It’s been an interesting month for the housing market, with most capital cities experiencing softer growth in April than in the first three months of 2017.

Hobart is leading the way as the strongest housing market, with home values increasing 5.1% over the past three months. In Melbourne and Sydney home value growth slowed in April, but the upside is that this may bring some relief on the horizon for first home buyers!

The Federal Budget was released on Tuesday this week, introducing changes which may affect property prices and buying conditions. Of late, the news has also been dominated by discussions that may impact property buyers and owners – such as the housing affordability debate, negative gearing, capital gains tax discounts, interest-only lending, borrowing through Self-Managed Super Funds and proposed changes to first-home-buyer grants and stamp duty. Please call us if you have any concerns or questions about how any of these points they may affect you, we’re here to help!

Interest Rate News

This month, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 1.5 per cent. Meanwhile, some lenders have raised their interest rates marginally on both owner-occupier and investment loans outside of RBA movements in recent months.

The Australian Prudential Regulation Authority has introduced new caps on lending for interest-only home loans, which may make them more difficult to obtain for some property investors. But there are still plenty of lenders prepared to give interest-only loans to solid borrowers.

Property Market News

Auction activity has picked up, following the Easter lull. The last week of April saw high clearance rates of 79% in Victoria, with 1335 scheduled auctions, and 75% in New South Wales from 1007 scheduled auctions. The Northern Territory had a 100% clearance rate, but there were only four scheduled auctions. The ACT had a clearance rate of 68% for 62 scheduled auctions, while Tasmania’s clearance rate was 67% for 10 scheduled auctions. The clearance rates were lower for South Australia (65%), Western Australia (50%) and Queensland (45%).

Home values only increased by 0.1% across the combined capital cities in April – the lowest month-on-month rise since December, 2015. Home value growth cooled in both Sydney (0% growth in home values for the month) and Melbourne (0.5% growth over the month). In contrast, Hobart’s home values grew 1%, while Adelaide’s increased 0.8% and Brisbane’s rose by 0.6%. Darwin’s property values rose by 0.5% in April, while Perth’s and Canberra’s fell 1% and 2.8% respectively.

If you’re considering refinancing, purchasing your first home, your next home, an investment property, commercial property, or even a car at the end-of-financial-year sales, we can organise the right finance for your individual needs and financial goals. Set yourself up for a bright financial future by speaking to us about your options today!

Welcome to our May Newsletter


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