You and your home loan have had a pretty good run. It’s been with you through leaky roofs and loud neighbours. But maybe your eye has been wandering. You’ve seen other home loan rates and wondered how happy you really are.

After all, you know what they say: a change is as good as a holiday. Sure, a new home loan rate isn’t quite the south of France, but it could mean you get there sooner.

Refinancing your home loan can be a great way to save on your mortgage repayment. A lower rate can mean a lighter load on your monthly budget. Plus, home loan products may have changed since you first committed, so you might find a product with features that better suit you.

Sounds good, doesn’t it? Here’s what you need to do.

Cut back non-home loan debt

Your bank will want to see that you can comfortably meet the new repayments on your refinanced home loan. Aiming to cut back credit card debt or personal loan balances will free up income to help you manage the refinanced loan. Remember, banks take into account the LIMIT of your credit cards, store cards and interest free accounts; not just your balance!

Know how much you can comfortably repay

In many cases, refinancing will mean taking on a larger loan, and your bank will want to be sure you can comfortably manage the repayments. A Refinance Calculator can show you the likely repayments for a variety of loan sizes, rates and terms. Start with what makes you comfortable and you’ll get a better idea of how much you should apply to borrow.

Get your home ready for valuation

Your lender may want to have your home valued prior to refinancing your home loan. If this is the case, treat the valuation a bit like an open inspection. Put your best foot forward. Finish those repair jobs you’ve been ‘working on’. Give the place a fresh coat of paint and fill the garden beds with colour. The better the valuation, the more flexibility you’ll likely have when it comes to your loan.

Know why you want to refinance your home loan

Make sure you’re really clear about your motivation for refinancing your home loan. Many home owners use refinancing to fund renovations or the purchase of a new car, but whatever the reason, your bank will be keen to discuss whether refinancing your home loan is the best strategy for your needs.

In some cases, it may not be a suitable choice. For example, if you are refinancing to secure funds for business purposes, your lender could recommend a commercial loan. Or, you might find your bank would prefer you not use a mortgage to buy a wax model of Bradley Cooper.

Take the opportunity to explore new options

Home loan refinance options are plentiful. Refinancing your home loan is the ideal opportunity to take stock of your current loan, to see what’s available with other lenders and to weigh up different types of loans and their features. Circumstances change over the time and the loan you chose when you purchased your home may no longer be the best fit for your lifestyle.

Whatever the reason you’re looking at refinancing your home loan, there are choices available.. See how much you could be saving and let an Element Finance broker find the right option for you.

HOLD ONTO YOUR HATS, THINGS ARE ABOUT TO GET A LITTLE BUMPY. ECONOMISTS FROM AUSTRALIA’S BIGGEST BANK ARE PREDICTING THE RESERVE BANK WILL RAISE THE OFFICIAL CASH RATE AS EARLY AS JUNE- AND WE’RE ALREADY SEEING FIXED INTEREST RATES INCREASE SIGNIFICANTLY.

Commonwealth Bank (CBA) economists have brought forward their forecasted Reserve Bank of Australia (RBA) cash rate hike from August to June, making it the earliest prediction amongst the big four banks.

We’ll go into more detail on why CBA has brought forward their prediction below, but first something a little more concrete: we’ve definitely noticed fixed rates trending up in recent months.

Fixed rate hikes
For example, back in November, for a $700,000 loan at 80% loan-to-value ratio, a two-year fixed rate with one particular lender was 1.84%.
That rate has since gone up to 3.04% – a staggering increase.
While not every lender has increased fixed rates so significantly, we are seeing them go up across the board.

So if you have been umming and ahhing about fixing your rate lately, you’ll want to get in touch with us sooner rather than later.
Because while most lenders have recently reduced their variable rates to compensate a little, with news now that the cash rate is being tipped to increase mid-year, you can expect variable rates to increase with the cash rate.

So why has CBA brought forward their forecast to June?
Ok, so back to CBA’s June cash-rate hike prediction and why they’ve brought it forward from August.

In a nutshell, CBA senior economist Gareth Aird is anticipating inflation to be a lot stronger than the RBA is forecasting.
As a result, Mr Aird believes this will lead to a rise in the cash rate to 0.25% at the June board meeting (currently it’s at a record-low 0.1%).
“We are very comfortable with our expectation that the quarter-one 2022 underlying inflation data will be a lot stronger than the RBA’s forecast,” explains Mr Aird.
And here’s the thing: it’s not the only cash rate hike CBA is predicting the RBA will make over the next 12 months.

Mr Aird is expecting a further three rate increases over 2022 to take the cash rate to 1%, with another move to 1.25% in early 2023.

That’s five cash rate hikes over 12 months!
Get in touch today to explore your options

Believe it or not, there are more than 1 million mortgage holders out there who have never experienced a rate rise (the last RBA cash rate hike was in November 2010).
And if the CBA’s prediction of five rate hikes over the next 12 months proves right, then some households will be in for a bumpy ride as they face hundreds of dollars in extra mortgage repayments each month.

So if you’re keen to act before the RBA increases the official cash rate, get in touch with me today. I would love to chat with you and help you work through your options in advance.

Spring is generally the busiest time of year in the Australian property market, and this season could be a ripper. In recent months, we’ve seen ongoing signs of improving market conditions, driven by a Coalition federal election win, interest rate cuts and a softening of lending restrictions.

And it’s clear that buyers are returning to the market. In August, capital city auction markets recorded the highest preliminary clearance rate in over two years.

That said, listings remain low compared to previous years, which means that as a buyer, there may be more competition for properties this spring. Here are some pointers to negotiate a good deal this season.

Tip #1: Do your research

Knowledge is power, and when it comes to negotiating, you’ll want to arm yourself with as much information as possible. Understanding the local property market will help you identify a good deal when you come across one, and how much competition you’re up against.

When you find a property you like, be sure to check out the sale prices of similar properties in recent months. Find out how long properties are staying on the market for, and the auction clearance rates in the area. If conditions are favouring buyers, it may leave you more room to negotiate on price.

We offer free suburb and property reports that contain a wealth of property market information, so please get in touch!

Note: If you’re looking for a property on the lower end of the price range, CoreLogic’s Top Affordable Suburbs Report is another handy resource. It identifies the top 100 suburbs across Australia where the median value is under $500,000.

Tip #2: Make sure your finance is in order

If you do find a bargain, you’ll want to be in a position to jump on the deal. Speak to us about organising pre-approval on your finance, so that you’re ready to go.

Pre-approval means a bank has agreed, in principle, to lend you a certain amount of money. Having pre-approval gives you confidence to bid at auction or play hardball during private negotiations with vendors. It may also give you an edge over other buyers without pre-approved finance.

Tip #3: Find out why a vendor is selling

In order to negotiate a great deal, it’s important to understand the vendor’s motivation to sell. What type of settlement terms and deposit will be most attractive to them?

For example, they may be moving interstate, or need access to money fast, in which case they may drop their price for a shorter settlement. Maybe they need an extra-long settlement while they find somewhere else to live? Or perhaps a larger deposit would make you more favourable compared to other buyers?

Ask the real estate agent why the vendor is selling and use the information as a negotiation tool.

Tip #4: Get building and pest inspections done

These reports can be pricey, and if you fork out for them then don’t end up buying a property, you may be tempted not to bother next time around. Beware!

Building and pest inspections not only alert you to issues with the property, they can also be used as ammo during price negotiations. Say there’s an issue but it’s not a deal-breaker, you may be able to use the information to negotiate a lower sale price.

Let’s chat

With a bit of luck, the recent improvements in the property market will boost vendor confidence and we’ll see a gangbuster season of hot new spring listings. If you’re in the market for a spring property purchase, speak to us and we’ll line you up with the right finance for your needs.

There’s no doubt about it – buying your first home is one of the most rewarding experiences of your life! However, it is an emotional journey. Here are 6 feelings you may experience as part of the purchasing roller coaster (buckle your seatbelts – it’s quite a ride!).

1) Excitement at the prospect of buying

You’ve been working hard to save a deposit and it’s finally time to purchase. When that time comes, it’s like someone has opened the door to a whole new world. And it’s an exciting place indeed! At this point, the anticipation is killing you.

2) Confusion about what exactly is involved

You’re a rookie, so of course the purchasing process can seem overwhelming and daunting. Where does one start? What kind of research is required? What type of loan is right for your needs?

Here’s a quick rundown of the steps involved:

1. Apply for pre-approval

2. Do your research and find the right home

3. Have your conveyancer check the contract of sale

4. Organise building and pest inspections

5. Put in an offer or go to auction

6. Finalise your home loan

7. Do a final inspection on the property

8. Settlement

9. Move in!

3) Relief when you discover how we can help

Ahhh, you’re not in this alone. That’s right – we can walk you through the buying process, starting with the research component. Our free suburb and property reports offer a wealth of information, from details about capital growth and median values, to recent sales data.

Next, we’ll take care of your finance for you. We can:

• Explain your borrowing capacity (how much a bank will lend you)
• Arrange pre-approval on your finance (so that you’re ready to make offers or bid at auction)
• Explain loan features that may save you money in interest (for example offset accounts and redraw facilities)
• Line you up with the right home loan for your specific needs
• Take care of the paperwork for you.

4) Exasperation as you look for the right property

If you’re one of the lucky ones who finds the right property early, you may escape the exasperation stage altogether. However, if you find your weekends being consumed by inspection after inspection to no avail, it can leave you feeling exhausted and discouraged.

Don’t despair – your dream home is out there. Just remember, with every inspection you’re one step closer to the thrill of finding your very own pad!

5) Nervy during negotiations

You know when you’re at the top of the roller coaster incline and it’s about to drop? Waiting for a vendor to accept your offer or fronting up at an auction can feel a bit like that. There are bound to be butterflies in your stomach – just hold on tight and remember the best is yet to come.

6) Elation when the paperwork is signed and it’s yours!

There’s nothing as rewarding as receiving a shiny new set of keys and walking through the front door into your own slice of real estate. You’ve survived the journey and probably even enjoyed it! It’s at this point you’ll feel pure, unadulterated joy.

Buying your first home is an experience you’ll never forget. The thrill. The adrenalin. And the rush of emotions when it’s finally yours are hard to beat. If you’re ready to purchase your first home, please get in touch. Let us be your conductor; you just enjoy the ride.

Australians love investing in property, and it’s no wonder why. The property market offers a myriad of opportunities to potentially grow wealth, irrespective of one’s professional background or skillset.

However, there are certain habits that successful property investors often have in common. Let’s take a look.

They are proactive about self-education

In order to stay ahead of the game, seasoned property investors are proactive about self-education. They understand that the property market is ever-changing, and that one must keep up to speed with developments in order to succeed.

As a result, successful investors understand the economic factors that drive markets and the way market cycles work. They can recognise when the market is shifting and act early. And they can seize opportunities where possible.

If you want to be a successful investor, you need to become an avid learner. Here are some ideas:

• Listen to podcasts
• Devour books, investment magazines, and blogs on the topic
• Do property investment courses online or through a local learning institution.

They make the most of professional help available to them

Smart property investors understand that while it’s important to nurture their own knowledge, they can’t know everything. Everyone has limits.

The key to success is to leverage the abilities of exerts in their field. Mortgage brokers, real estate agents, financial planners, accountants, conveyancers, buyers’ agents, property managers – all of these professionals are resources to be drawn on in order to make smart property investment decisions.

They review their investment loans regularly

The right investment loan for you today may no longer suit your needs in a year’s time. Successful property investors continually review their loans to make sure they still measure up.

In this way, clever investors can identify new opportunities along the way. For example, they may refinance their loans to include offset accounts and redraw facilities to save interest, or they may set up lines of credit to renovate their investments.

They have vision

Experienced property investors look past the current market movements to see the big picture. They understand the nature of property cycles. Sometimes it pays to buy and hold property; other times it’s best to flip. Having vision is what sets the successful investor apart from the mediocre one.

They also plan for contingencies. Buying an investment property comes with financial benefits, but there is risk involved. For example, what happens if the tenant falls behind in rent or something major needs to be repaired? What if the property’s value falls? Smart investors plan ahead and have strategies in place for these kinds of challenges.

Like to know more?

Whether you’re a seasoned property investor with a multi-property portfolio or a rookie investor, we can help you achieve your financial goals. We’ll line you up with the right finance for your specific needs and future aspirations. Please get in touch.

Spring has arrived and we are supercharged for a bumper season in the property world. Dwelling values have been creeping up in many markets and auction clearance rates have been higher recently too. Interest rate reductions and changed lending rules have fuelled increased buyer activity, though stock volumes remain low. Overall, the housing recovery looks set to continue.

Interest rate news

At its September meeting, the Reserve Bank of Australia (RBA) decided to leave the official cash rate on hold at 1% pa. The move follows rate cuts in June and July.

While this month’s decision was widely anticipated, economists say there could be more cuts by the end of the year, potentially starting in October. Recently we’ve seen some lenders slash fixed interest rates on both owner-occupier and investor loans.

Given rates are on the move, now is the time to review your finance. It may even be worth considering fixing your home loan – speak to us about your options!

Home value movements

Property prices are continuing to rise, up 1.03% across the combined 5 capital cities in August. Prices in Sydney and Melbourne continue to trend higher. Sydney recorded a month-on-month change of 1.57%, while Melbourne’s property values grew by 1.40%. In Canberra, prices increased by 0.79%, while in Hobart they rose by 0.51%. Brisbane saw modest growth (0.2%), while Perth and Adelaide experienced falls of 0.51% and 0.24% respectively.

In recent weeks, we’ve seen auction clearance rates soar in many markets. In fact, auctions across Australia’s capital cities reached a two-year high in August.

Property market activity

Ready for a spring property purchase?

If you’re considering buying this spring, speak to us about organising your finance. Given that stock volumes are low, there’s bound to be strong competition amongst buyers, but having pre-approval in place may give you a competitive edge. Get in touch today so we can get it sorted!

Do you know what happened after the Reserve Bank cut the cash rate in June? Tens of thousands of Aussies took the Treasurer’s advice to “shop around and get the best possible deal”. Mortgage brokers around the country have recorded spikes in their home loan, investment loan and refinance borrower enquiries following the announcement.

The moral of the story? Now is the time to review your home loan. Here are four signs you may be overdue for a check-up.

You’ve been with the same lender forever

Interest rates are at historic lows and competition between lenders is high. That means there are plenty of red-hot deals out there, particularly given the recent cash rate cuts.

If you’ve been with the same lender for years, chances are you’re probably missing out on a better deal elsewhere.

You have no idea what a redraw facility or offset account is

Most home loans nowadays come with money-saving features like offset accounts and redraw facilities. These tools allow you to save in interest and potentially pay off your loan sooner.

How they work

Offset accounts

With this set up, a transaction account is linked to your mortgage. Any money deposited is offset against your loan balance, reducing your interest payable. Example: you owe the bank $400,000 and you have $50,000 in the offset account. Interest will only be calculated on $350,000.

Redraw facility

With this loan feature, you can make extra repayments on your mortgage and save on interest. Best of all, you can still access the funds in future should you need them.

Your personal circumstances have changed

What’s changed since you took out your mortgage? Are you earning more money? Have your living expenses changed? Do you have different financial goals?

All of these elements need to be taken into consideration when choosing the right home loan for your needs.

You’re drowning in debt payments

If you’re struggling to cover multiple debt repayments, debt consolidation could be the answer. This strategy involves refinancing your mortgage and using some of your equity to pay off the other debt.

The benefits are:

• Home loan interest rates are lower than other types of credit
• You’ll only have one repayment to meet
• You can spread the repayments out, so that they’re more affordable
• You may be able to make additional repayments and knock off your debt sooner.

While debt consolidation is not right for everyone (in some instances, you may end up paying more in interest over the course of the loan), it’s at least worth investigating.

Like to know more?

If the alarm bells are ringing, we can review your home loan and outline whether it’s still right for you. You may be better off with another loan that ties in with your current financial situation and goals. Please reach out – you have nothing to lose and everything to gain.

The busy Spring property season is just around the corner and you know what that means? Whether you’re planning to buy or sell, NOW is the time to start getting organised. Here’s how.

Tips if you’re planning to BUY this Spring:

Get your finance sorted pronto

There’s no point starting the property hunt until you know how much you can borrow. Talk to us and we’ll explain your borrowing power.

If you haven’t already done so, it’s also a good idea to get pre-approved for finance now, so that you don’t miss out on your dream home once you find it. For most lenders, pre-approvals last 3-6 months.

Do your research

Whether you’re a first home buyer or you’ve been around the block, it’s important to do your homework.

• Narrow down the suburbs you’re interested in and research the market value of your desired property type
• Check government websites for projects that may influence the capital growth potential
• Consider the zoning and whether upcoming developments could affect supply and demand
• Check out recent comparable sales on websites like realestate.com.au
• Get to know local real estate agents now, so that they keep you in the loop about new listings during Spring
• Ask us for a free suburb report with all the key info you’ll need.

Attend several auctions before you actually bid

Bidding at auction can be extremely daunting, particularly with the knowledge that there’s no cooling off period. You’ll want to feel confident about the process before going in guns blazing.

Over the coming weeks, make time to attend several auctions to get a feel for how they unfold. Even if you’ve bought at auction before, it’s a good idea to suss out the market in advance.

Tips if you’re planning to SELL this Spring:

Declutter

That’s right, it’s time to channel your inner Marie Kondo (she’s a tidying expert, if you haven’t heard of her). You may be thinking, ‘it’s only August, I’ll have time for that later,’ but it’s important not to underestimate how long the decluttering process can take!

Decluttering can make a world of difference to prospective buyers. It allows them to see the space more clearly and imagine themselves living in your home. In simple terms, space sells.

With that in mind, ditch what you don’t need and consider putting the majority of your belongings into storage.

Clean meticulously

Time to give your home a thorough clean. You’ll want your property looking its absolute best for when the inspections begin.

If there are any repairs or maintenance jobs you’ve been putting off over the Winter, now is the time to address them.

Consider renovating

Want to drive up the sales price? Why not renovate this month and add value to your property?

Most experts recommend the top priorities when renovating for profit should be the kitchen and bathroom(s). If you need finance for these kinds of big-ticket renovations, we can help.

However, even making small cosmetic enhancements, like applying a fresh coat of paint or putting up new blinds, could result in a heftier price tag.

Sort out your finance for your next property purchase

Already found your next home? You may need bridging finance to tide you over until settlement is finalised on your old property.

So, what’s on your to-do list this month? Remember, whether you’re buying or selling this Spring, now is the time to start planning and preparing. Speak to us for all your finance needs today!

Rentvesting has become increasingly popular in recent times. Last year, research from the Property Investment Professionals of Australia (PIPA) found that one third of first-time buyers opted to become ‘rentvestors’, rather than homeowners.

Here’s what you need to know before deciding whether rentvesting is right for you. But first, let’s look at an age-old question.

 To rent or buy?

If you’re wondering whether it’s cheaper to rent or buy, the answer depends on where you buy and your individual financial situation.

Domain Group compared weekly mortgage repayments on a median sale price to median rent for both houses and units in the year to April. The research found that in many capital city suburbs, rents were higher than mortgages (find out where it’s cheaper to buy a property than rent).

But what if you didn’t have to choose between renting and buying. What if you could have the best of both worlds?

What is rentvesting

Rentvesting is where you rent where you want to live and buy where you can afford. Simple.

Pros

A leg up on the property ladder

 If, like most first-time buyers, you can’t afford your dream home straight away, rentvesting gives you options. It allows you to get started in the property market with a smaller deposit and work towards buying the home you want, or to build your investment portfolio.

Lifestyle perks

Want to live in a trendy neighbourhood that’s out of your price range? With rentvesting, you can. Live the lifestyle you want, and invest elsewhere.

Flexibility

Renting gives you increased flexibility to move around if your circumstances change.

Tax benefits

What’s really great about owning an investment property are the tax perks. Most of the property expenses can be offset against your income.

Cons 

No FHOG

If you decide to buy an investment property rather than a home, you won’t be entitled to the First Home Owner Grant and stamp duty exemptions or concessions. These are for first time owner-occupiers.

Added responsibility

Being a renter and a landlord at the same time means you’ll have multiple expenses to cover. In addition to paying your rent, you’ll have costs including council rates, body corporate (if applicable), property management fees, maintenance, other running costs, and of course, your mortgage repayments. Keep in mind that if your investment is tenanted, the rental return may cover some, if not all, of these expenses.

You won’t own your home

Renting means you won’t be able to make the property your own. You also won’t have control over how long you can stay. Leases usually tend to be 6 or 12 months, so you may end up having to move regularly.

Capital Gains Tax

If your investment goes up in value, you may be subject to Capital Gains Tax when you decide to sell.

Steps for purchasing your first investment property

Step 1: Talk to us about your borrowing power and get pre-approval on your finance

Step 2: Formulate your investment strategy (it’s a good idea to talk to a financial planner or accountant)

Step 3: Create a purchasing budget, factoring in all the costs associated with owning an investment property

Step 4: Do your research (for things like capital growth potential and rental yield)

Step 5: Once you find a property, organise building and pest inspections

Step 6: Get us to finalise your investment loan.

Like to know more?

If you think rentvesting is right for you, we can help you explore your finance options. We’ll hook you up with a competitive investment loan that’s right for your needs. Please get in touch.

It’s been an exciting few months in the property world, with plenty of chatter about a potential market rebound. Back-to-back interest rate cuts, looser lending conditions and increased confidence following the May federal election have seen buyers returning to the market. In July, five of the eight capital cities recorded a slight rise in dwelling values, so if you’re a prospective buyer, now might be a good time to dive in and seize the moment.
Interest rate news
At its August meeting, the Reserve Bank of Australia (RBA) decided to leave the official cash rate on hold at 1% pa. The decision follows rate cuts in June and July. The majority of economists believe there will likely be another cut later in the year to 0.75% pa.

Most lenders have adjusted their interest rates to reflect recent cuts by the RBA, but it’s still worth shopping around. Some lenders are passing on bigger discounts than others.

Home value movements
Housing values appear to be stabilising, with five of the eight capital cities recording a modest rise in value in July. In Sydney, prices increased by 0.22%, while Melbourne saw values rise by 0.18% during the month. Values also climbed in Brisbane (0.24%), Hobart (0.27%) and Darwin (0.42%). Perth, Adelaide and Canberra all saw prices fall (by 0.53%, 0.34% and 0.32% respectively). In other news, capital city auction markets recorded the highest preliminary clearance rate in over a year (70.6%) in July.

Property market activity

* Monthly Home Values figures as at July 31, 2019
* Australian auction results, clearance rates and recent sales for the week ending August 4, 2019

Gearing up for a Spring property purchase?
If you’re in the market for a new home or investment property this Spring, we can line you up with the right finance for your needs. Contact us to arrange pre-approval today!

Sincerely,
Mike & the Element Finance Team

You may be surprised to discover that how much you spend on day-to-day living can considerably reduce the amount you are eligible to borrow, even if you are a high-income earner. So, if you’re planning to buy a home, it may be time to cut back on some of life’s little luxuries and set yourself a strict weekly budget. Here’s why.

Why do living expenses matter?

Under the National Consumer Credit Protection Act (NCCP), mortgage brokers and lenders are required to meet ‘responsible lending’ guidelines. These guidelines are designed to ensure a borrower can afford to make the repayments on their loan without suffering ‘substantial hardship’.

That means by law, a mortgage broker or lender must ensure that you have plenty of money left over from your income to repay your loan after you have covered your regular financial commitments. So, we must perform a thorough living expense and income assessment to determine your true financial position before you can apply for a loan.

What are living expenses?

A living expense is anything you spend your money on. It could be a $500 monthly payment for your personal trainer, the $5 coffee you buy every morning on the way to work and everything else in between.

According to a survey by UBank in 2018, 86% of Australians don’t know how much money they spend every month on their living expenses. If you don’t track your purchases, it’s very easy to spend more than you earn without even realising that it’s happening – particularly if you buy everything on your credit card.

Tips for controlling your expenses

The MoneySmart Budget Planner is a great way to see where your money is going. It’s available free from the ASIC MoneySmart website here.

The MoneySmart TrackMySpend app is another handy tool for budgeting and working out where your money is going. It helps you record your weekly household budget, nominate spending limits for different categories of expenses, separate your ‘needs’ from your ‘wants’, and kickstart your savings goals.

How do we perform a living expense assessment?

As your mortgage broker, we will provide you with a Needs Analysis Questionnaire to help you figure out your living expenses. It divides them into simple categories, so it’s easy to see that you’ve remembered to include absolutely everything. These categories include:

Frequently asked questions about living expenses

Is rent a living expense? You don’t need to include your rental expenses as part of your living expense assessment if you’re buying a home you intend to occupy.

How about debts? Any debts you have will be included in the liabilities section of your living expense assessment and loan application.

How do we check all of this? We are obliged to ask to see your transaction account and credit card statements, so we can check your spending corresponds to your declared living expenses. We must also ask for proof of income – like copies of pay slips for example. 

Cut back on your expenses to increase borrowing power

Whether you’re considering purchasing your first or next home, it’s important to have a solid understanding of your living expenses. Remember, a lender will only give you a loan for an amount that you can afford to repay – cutting back your everyday spending could help to increase this amount and improve your borrowing power.

We will be happy to run through your living expenses and help you find ways to budget and save to increase your borrowing power if you need help. We’ll also prepare your loan application to maximise your chances of getting your loan approved the first time.

Here’s an overview of what’s involved if you’re considering building a new home for the first time.

What’s your budget?

The first step to building a home is deciding what you can afford to spend. When buying a home that’s already built, determining how much money you need is quite straightforward. However, it’s not so simple when building. Once you’ve finalised your budget you’ll know if you need finance. We can help determine your borrowing capacity to get your build underway.

Select a home building option

When it comes to building your own home, there are several ways to go about it. You can select a house and land package, or you can work with a designer and custom-build your property on your own land. Some people choose kit homes or modular homes as they are faster to construct – most of the components are prefabricated and delivered to the site to be assembled – but talk to us before you choose this option as not all lenders are enthusiastic about this type of building project.

There are plenty of useful websites where you can find estimates of how much it costs to build the kind of home you want. Remember – you can explore these options more effectively once you know exactly how much you can spend.

Find the right block of land

Some people buy their land before choosing the home they want to build. Others choose the home design first. Either way, make sure the home design will work on the block of land you choose. A site that has a steep slope or an unusual shape, for example, may be difficult to build on. It’s a good idea to seek professional advice from a reliable builder to make sure your land and home design are compatible.

Choosing a builder

It’s important to do plenty of research when selecting your builder. You could ask friends and family for recommendations or go online to research builders. Be sure to check out other homes the builder has constructed. Also, check in with the Master Builders’ Association to make sure your preferred choices are legitimate and have received no major complaints.

It’s a good idea to get quotes from several different builders, complete with detailed plans, price breakdowns and a timeline for completion. You should also have your solicitor or conveyancer check the documentation before you commit.

Secure finance

A construction loan is the most popular option if you are building your own home. Construction loans are different from regular home loans. The lender releases portions of the loan, or progress draws, throughout the construction process. These are only paid once an inspection of the build has been completed at certain stages. This helps to keep your project on schedule and protect both you and the lender from less than honest builders.

Usually you pay interest-only during the construction, then repayments convert to principal and interest upon completion.

There’s nothing more exciting than watching your home grow from the ground up. We’d love to help you build your dream home, so please get in touch.

In Australia, it’s possible for just about anyone with a deposit to invest in property, whether you are a low-income earner on a tight budget, or a well-off with loads of disposable income. Interest rates are very low at the moment and home prices are more affordable than they’ve been for a while. So, if you’ve been thinking about property investment, it may be a good time to get started.

Rentvestors

Rentvestors are often motivated by a desire to maintain their current lifestyle, while still wanting to get on the property ladder. The solution? To rent where they want to live and invest in more affordable suburbs elsewhere.

This type of investment strategy can help you to grow a deposit to enable you to buy a home where you’d prefer to live later, but talk to a professional financial planner to ensure it will work for you. Capital growth is an important factor in Rentvesting, so it’s also important to research your property investment carefully and locate an up-and-coming suburb where this is more likely to happen quickly.

‘Mum and Dad’ investors

This is a common way of describing a conservative type of investor. ‘Mum and Dad’ property investors will typically have paid down their family home loan and be ready to access the equity to build more wealth for the future. They’ll often be growing their portfolio slowly and want to have only one or two investment properties in addition to the family home.

Each investor’s strategy depends on their goals and how comfortable they are with risk. If you are a conservative investor, you may opt for ‘set and forget properties’ that are easy to maintain and likely to deliver moderate long-term capital growth. This approach helps to protect your capital while making “extra” money.

Short-term investors (property flippers)

Buying, renovating and selling quickly is the name of the game for flippers. The idea is to buy a property in need of some TLC, but no major structural work. This takes careful research and it pays to have a team of builders and property inspectors to help you make the right property purchasing choices.

Property flippers manufacture capital growth by renovating. For this type of strategy to work, you need to be willing to invest considerable time and energy into the project and have a very firm grasp of both your budget and building costs.

It’s important to note that when property prices are falling, flipping can be a very risky business. If you fail to get your budget right, it could be very easy to end up with a property that’s worth less than you spent on buying it and renovating it.

Investors who do it as a business (long-term)

This type of property investor takes a professional approach and work as though they are operating a business. They often have a significant, diversified portfolio that includes both residential and commercial properties, and plan to continually purchase more properties.

Sophisticated investors are up to speed with things like value movements in the property market and maximising their tax advantages. They usually seek professional advice from a qualified accountant to support and inform their activities and decisions.

Investors who do it as a business buy, when home values fall rather than allow market variations to keep them up at night. They are usually careful to set up financial buffers to protect themselves throughout the peaks and troughs of a property cycle.

Get a professional broker on your team

No matter what approach you take to property investing, the right finance solution is critical to your success and can potentially make a big difference to the profit you make. We’re here to ensure your mortgage and loan structure is suitable for your investment strategy, personal financial circumstances, needs and goals. Feel free get in touch to find out more.

Great news for homeowners and property buyers this month. Home loan interest rates have fallen again. If you’re in the market for a home or want to invest in property, now is a good time get pre-approval on a competitive home loan.

Interest rate news
At its July meeting, the Reserve Bank of Australia (RBA) decided to cut the official cash rate for the second month in a row, bringing it to just 1% p.a. – a new historical low. Many analysts agree there will likely be at least one more RBA rate cut this year, which would bring the official cash rate to just 0.75% p.a. and some are predicting it may even fall as low as 0.5% p.a.

Most lenders passed on the RBA rate cut to home owners last month, bringing interest rates on many standard variable rate home loans to just 3.6% p.a. or lower.

Home value movements
During June, Melbourne and Sydney both recorded slight home value increases for the first time since 2017 and Hobart also showed an increase. However, national property values dipped by 0.2% on average across the month, and there were sharp falls in Brisbane, Adelaide, Perth and Canberra, which could be an indicator that the property market correction is not quite over yet.

It seems likely that the re-entry of property investors to the market was responsible for the rise in home values in our biggest markets, last month. Tim Lawless, a market analyst from CoreLogic, said that “the removal of uncertainty surrounding changes to negative gearing and capital gains tax discounts [following the Federal Election] has boosted confidence.”

Property market activity

If you’re in the market for a bargain, see us about a pre-approval!
Even though winter has arrived, there are still many homes up for sale and it may be a great opportunity to negotiate on price. It pays to enter negotiations armed with a pre-approval on your home loan. If you’re in the market give us a call, we’d be happy to help.

Sincerely,
Mike & the Element Finance Team

How you use your income and available credit can make a huge difference to your lifestyle, so it’s very important to get it right. That means getting reliable, ongoing advice and support from a professional credit advisor you know and trust.

Your mortgage and finance broker can help you with all your big purchases, throughout every stage of your life – from your first home, to an investment property, or even a new car or funding for your small business. Here are some of the benefits of maintaining a long-term relationship with your broker.

Deal with one person who understands you.

When you first meet with us, we take the time to understand your personal financial situation and your goals for the future. That not only means we work with you to help you make a good decision about a loan for what you need right now.  It also means we work with you to ensure the decision you make is a good one for your financial future.

Whenever you need to make a big purchase or an important decision about a loan moving forward, your broker will be ready to help. We’ll keep all your paperwork on file and ensure we understand your goals, and that will save you a lot of time and hassle.

By contrast, when you go direct to a bank to get that first loan, they are only concerned about that one loan – not with what happens next. So, every time you need assistance with a new loan, you’re forced to start the whole process from scratch with someone new – which can be very frustrating and time consuming.

Maximise your income and available credit.

If you don’t have the benefit of advice from a trusted professional, how do you know you’re using your income and borrowing power to its full advantage? The last thing you want to do is waste money or miss out on opportunities to secure the home and lifestyle you really want for you and your family.

A long-term relationship with your broker gives you support to maximise your income and improve your financial situation as you progress through your life stages. This knowledge and positive support will help you to achieve the lifestyle you want and make realistic plans to use your income and borrowing power wisely to support your lifestyle in the future.

We’ll even work together with your financial planner, accountant or other professional advisors to help you achieve your financial goals and we won’t charge you for our time.

Support to achieve financial independence.

Banks tend to be strictly transactional. They just provide the service you ask for and you usually only hear from them again when they’ve got another product they want to sell.

By contrast, your broker is here to protect your interests. You can expect to hear from us regularly with any important information that is relevant to you, when the opportunity arises to save money, or to support you in taking the next step in your wealth building journey.

Manage your loans and stay on top of your financial situation.

As you progress through the different stages of your life, your financial situation will change. A common example is when you and your partner have a child and your income temporarily reduces from two salaries to one.

We will always be on hand to help you manage life stage changes and issues. A bank will not necessarily support you personally, which can be worrisome.

Call us for a chat today.

If you’re looking to buy your first home, purchase your next one, invest in property or refinance your home loan just let us know. We can even help with competitive car loans if you want to take advantage of the fantastic EOFY car salesthat are on right now. We love helping you with your lifestyle purchases, as well as achieve your home ownership and wealth building goals, so please get in touch today.

If you’re looking to rent out or sell your home, identifying the right market for your property and making it appeal to them, will help you to maximise your profits. So how do you go about it? Use these tips for identifying the most profitable target market for your property and ways to spruce it up to increase its appeal.

Find out who wants to live in your area

The first step is to research who is currently living in the area and who may want to move there in future. Is the area popular with families, or does it appeal more to young professionals or retirees?

A simple way to find out is to touch base with a few real estate agents, to see what kind of customers they have looking for property in your area. Real estate agents often have waiting lists of buyers and renters, so it can be useful to get to know them and form a good working relationship with them if you want to buy or rent out property.

Investigate what kind of properties are in high demand

Next, find out which properties are moving fastest in your area. Are they apartments, two or three-bedroom homes, or new developments? Is the demand highest from high or low budget purchasers and renters?

Finding out the kind of customers moving into your area will also fuel ideas about how to make your property more appealing, so you can maximise your sale price or rental return

An easy way to find out is to browse local real estate agent websites to check prices and how long similar properties to yours stay on the market. Again, if you have a good relationship with your local real estate agents, you can simply give them a call and ask them.

Consider making some changes

Once you’ve discovered the kind of buyers or renters who want a property in your area, you can focus on making yours more appealing to them. Renovations can add value to a property in more ways than one!

If you decide to do some renovations, be sure to talk to us about finance before you start. Here are some ideas of the kind of features that may be popular with different demographics. It should be noted that these days, people prefer clean, recently renovated bathrooms and kitchens. Most of the ideas below can be improved or added cost-effectively and can make a big difference to a sale price or rental return.

Don’t over capitialise!

When renovating, it’s important to budget carefully and spend wisely to ensure you don’t spend too much and you get the outcome you’re looking for.

For example, if you purchase a house for $400,000 and spend $100,000 doing it up, you’ll want to ensure the end value of the property is worth more than $500,000. You’ll also want to ensure the renovations make the property much easier to rent out or sell – for example, there’s no point putting in a swimming pool if renters and buyers in your area are not interested in having one.

Get a professional on your team.

If you need property market data about prices or rental returns, just ask us. We often have great information to share or can point you in the right direction to find what you need to make informed decisions.

Targeting the right market is often the key to maximising your returns and profits. And if you’d like to renovate, we can help you create a budget and explore your finance options. Please get in touch today if you’d like to find out more.

EOFY is fast approaching and the car sales are on. But buyers beware! It’s easy to get so caught up with grabbing a bargain, that you forget to look for a great deal on your car finance. There’s no need to run the risk of being caught out with the wrong finance choice.

We’re here to help you get fast, competitive finance for your car and other lifestyle purchases, as well as your home and property investment loans. But what if you’ve already been caught out? What if you’ve been stuck with a whopping car finance interest rate for quite a while? The good news is that you can refinance an existing car loan, with our support.

Here’s some of the benefits of talking to us about your car finance.

Lower interest rates

This is one of the most popular reasons why people want to refinance a car loan. Interest rates on car finance can vary widely depending on where you get it. For example, car dealership finance is often a one-size-fits-all package and since their activities are not regulated, they can set their rates higher than the rest of the market if they want. Similarly, there are specialist lenders you may not know about, who often offer better car finance deals than those offered by the big banks.

When someone offers you a car loan, it pays to ask us to see if you could be getting a better deal elsewhere – one that’s tailored to your personal financial circumstances and goals. Our service for a market comparison is free and if we think the deal you are being offered is a good one, we’ll tell you to take it.

More manageable repayments

If your car loan repayments are sky-high and you’re struggling to meet them, you may want to consider refinancing. By changing terms from three years to five for example, your regular repayments will reduce and become more manageable. It’s important to know this may mean you pay a bit more interest overall, but that may be better than suffering financial hardship or selling your car.

Access different features

Refinancing has the potential to get you better features on your car loan. For example, you may be interested in a loan with a redraw facility. It lets you make extra repayments to reduce the interest you pay, but still access those funds if needed. Different lenders offer different packages, so ask us to shop around and find one that’s suitable for your needs.

Finance the balloon payment

You can get a car lease or loan that gives you the option to make lower repayments and pay a balloon payment at the end of the loan term. If you need help with that, we can potentially arrange a refinance that lets you pay off the balloon payment, instead of having to come up with a lump sum.

To ensure your loan suits your current situation

Life happens and things may have changed since you originally took out your car loan.  For example, you may have started your own business and you now use your vehicle primarily for business purposes. If that’s the case, we can potentially do a refinance so that you can take advantage of any tax breaks available. We’ll even work with your accountant to help you maximise any tax benefits if necessary.

Why choose us?

You can rely on us to put your interests first. We offer tailored finance solutions for both new and second-hand vehicles and have access to a large panel of lending specialists, including some you may not be able to access through other outlets. We’re also happy to check any car finance you’ve been offered, just so you can be sure you’re getting a good deal. So, don’t wait to speak to us about your car finance, call us for a chat today.

Winter is here and we can expect our property markets to slow down considerably over the next few months. However, May was a much busier month than expected in many property markets. As a result, home value declines have slowed down, with Melbourne and Sydney showing the smallest month-on-month falls in over a year.

Interest rate news
At its June meeting, the Reserve Bank of Australia (RBA) decided to make a long-awaited cut to the official cash rate, reducing it to 1.25% – the lowest in Australian history. This was the first rate move the RBA has made since August 2016 and it was widely predicted by economists and market analysts. At least one, but possibly two, further cuts to the official cash rate are expected before the end of the year, which would be great news for homeowners and those looking to get a leg up the property ladder while homes are more affordable.

During May, many banks reduced interest rates in anticipation of today’s RBA move. Additionally, the cost of funding has fallen considerably for lenders in the past few months, which has made them more generous about reducing home loan interest rates for both homeowners and new borrowers. There are some very competitive rates available now, particularly on fixed rate loans, so call us if you’d like us to check your interest rate.

Home value movements
During May, falls in home values slowed considerably compared to recent months. Tim Lawless, Head of Research at CoreLogic, predicts that the softening in home values is likely to continue at this reduced rate until the end of 2019.

However, a renewal of confidence in the property market following the Federal Election seems likely, now that Labour’s plans to change negative gearing and capital gains tax for property investors are no longer on the table. The Australian Prudential Regulatory Authority (APRA), has also relaxed its policies on loan serviceability assessments and interest-only lending, which should help to make borrowing easier for property investors and those who may have found it harder to qualify for a home loan over the past year.

Property market activity
After the Federal Election, Autumn property market activity increased considerably, with a larger number of homes sold via private sales in both Melbourne and Sydney than usual. The table below shows property market activity as at June 2, 2019.

If you’re in the market for a bargain, see us about a pre-approval!
Even though winter has arrived, there are still many homes up for sale and it may be a great opportunity for you to negotiate the price on the home you want. It pays to enter negotiations armed with a pre-approval on your home loan, so if you’re in the market to buy a home please call us today to find out more. It’s also the busy time of year for car sales and business equipment purchases, so just let us know if you need help with finance and we’ll help you get it organised quickly before the end of the financial year.

Sincerely,
Mike & the Element Finance Team

Whether you’re upsizing, downsizing or just moving to a home in a new location, no doubt things have changed since buying your last home. This article explains the finance options available when you’re moving on to your next home. We also highlight a few other key considerations to think about.

How do you get from one home to the next?

The ideal way to do it, financially speaking, is to sell your existing home first. That way you’ll know exactly how much money you can spend on your next home and how much you’ll need to borrow. Moving on to your next home this way will also put you in a good position with potential lenders for your next home loan.

But life isn’t always that straightforward. If you can’t sell your existing home first for some reason, you might want to consider a loan product known as a ‘bridging loan’, which gives you access to funds to buy your new home before you’ve sold your current one.

What is a bridging loan?

There are generally two types of bridging loans: closed bridging loans and open bridging loans. Closed bridging loansare available to borrowers who have already locked in the sale of their existing property and know when it will settle. These are usually short-term arrangements. Open bridging loans are used when the existing property has not yet been sold and these can be arranged for up to 6 months.

How do bridging loans work?

A bridging loan requires the lender to work out the size of the total loan by adding the value of your new home to your existing mortgage, then subtracting the likely sale price of your existing home. This requires a valuation by the bank which will cost approximately $200 for each property.

Typically, you pay interest-only on the entire loan amount until the first property is sold and the principal is repaid in full. Bridging loans are sometimes structured so you only make principal and interest repayments on the loan until settlement, capitalising the interest due on the rest of the loan. Either way, once you have sold your existing property, the loan reverts to an ordinary home loan.

The pros of bridging loans

• You won’t miss out on your ideal property.
• If you want to build your next home, you can stay in your existing property until the new one is completed.
• You won’t have to worry about matching up settlement and move-in dates.
• You may achieve a better price for your existing property without the pressure of having to sell immediately, particularly in the current selling environment.
• You can avoid the costs of renting while you’re between homes and paying the movers twice.

The cons of bridging finance

• During the bridging period, you’ll have two loans that are accruing interest.
• Both properties will have to be valued by the lender – which could be costly.
• The longer it takes to sell your existing home, the more interest you’ll pay, as the interest is compounded monthly.
• If you don’t sell your current home within the bridging period, you could be required to pay a higher interest rate to continue. .
• You’ll need at least 20% of the total value of both properties (either in cash or equity in your existing property) to qualify for a bridging loan.

Alternative finance options

If a bridging loan isn’t right for you, there may be other options available to get you over the line with your next property purchase – so talk with us first. For example, if you have enough equity in your existing home, you may be eligible to use a line of credit.

Other considerations

Do you really need to sell your existing home? With many of our property markets experiencing a ‘correction’ at present, it could be a good idea to keep your current property as an investment and sell it on when the market recovers. Talk to us about your financial circumstances and we’ll see if you have the borrowing power to make it happen.

The ideal way to find out which loan you need and what you can afford to do with your existing home is to talk to us first. We offer tailored finance solutions, based on your individual circumstances. So, if you’re thinking about moving on to your next home, please get in touch with us today!

An investment property is a business, so managing it properly is very important to your financial success. One of the first decisions you’ll need to make is whether to manage the investment property yourself, or to employ the services of a property manager.

If you’re thinking of managing your investment property yourself, it may not be as straightforward as you think, so here are 6 tips to help you discover what’s involved.

Tip 1: Familiarise yourself with the law

Each state and territory have legislation in place to protect both tenants and landlords. As a DIY landlord, it’s important to familiarise yourself with these laws and have a solid grasp of the rights and responsibilities of both you and your tenant – even if you do decide to employ a property manager. You can find useful information on landlord responsibilities for each state and territory here.

Tip 2: Prepare the necessary documentation

Before you start looking for tenants, it’s a good idea to organise all the documentation required up front. These essential documents will include:

The lease:  usually a fixed-term for six or 12 months. Once the initial lease expires, you can use a periodic lease, which is a month-by-month agreement that kicks in once the fixed term lease expires.

The bond: an upfront payment by the tenant (often one month’s rent) to the landlord as security for rent owed or damage. This is usually paid in advance and held by the governing authority in your state. Find out more here.

The condition report: a document which notes the condition of the property prior to the tenant taking up residence. This is an important document, as it can be used as evidence if the tenant damages the property. You complete a condition report, and the tenant is also given the opportunity to submit a condition report once they get the keys. Taking photos is usually a good idea.

Many of these standard agreement forms are available online. For example, in Victoria, standard lease forms and condition report forms can be accessed through the Consumer Affairs Victoria website, and you can generate and lodge a bond form through the Residential Tenancies Bond Authority (available here).

Tip 3: Attract quality tenants

Before you advertise for tenants, you’ll need to investigate the correct rent for your property. Check out websites like www.realestate.com.au, or ask your local real estate agent for advice.

Once you’ve set your rental price, you can go ahead and advertise your property. Be sure to use quality photos (you may like to use a professional photographer). Most renters go through websites like www.domain.com.au and www.realestate.com.au nowadays, so be sure to put your ad online.

Tip 4: Screen and secure tenants

Once you receive applications from prospective tenants, you can begin the screening process. Think about what you’re looking for in a prospective tenant and create a list of relevant questions to ask them. For example: if the body corporate for your investment property limits the number of pets, you’ll need to ensure your tenant does not have too many.

Be sure to request several references, including a reference from their employer, as well as previous landlords. Another tip is to check tenant databases in your state or territory to see if the prospective tenants have been blacklisted by previous landlords or real estate agents. Information about these databases (which are run by private companies) and your obligations as a landlord is available here.

Tip 5: Fill out the documentation, lodge the bond and collect the rent

Once you find a tenant, be sure to follow the paperwork required by your state to the letter. Keep in mind that each state or territory may have different requirements, so make the effort to find out what they may be.

There are landlord software platforms available that can help with everything from rent tracking and expense management to end-of-financial-year tax reports and documentation (here’s an example). You could also use an app like RentRight, for example.

Tip 6: Retain and maintain

Once you’ve secured a quality tenant, it’s in your best interests to keep them for as long as possible. Respond to requests for repairs and maintenance quickly and efficiently.

Organising regular inspections is also important, to keep tabs on how your property is faring. State or territory rules may differ in terms of the frequency of inspections, how you notify the tenant and entry procedures, so check with your local authority. Often inspections are held three months after the move in day and every six to 12 months thereafter. Another tip is to be meticulous about your record keeping and document everything – phone calls, messages, the lot – as this will help protect you should issues arise.

Remember, as your mortgage broker, we’re here to help. In addition to making sure your investment loan is right for you, we can also offer referrals to professionals for your team (it’s always a good idea to get professional legal and tax advice). So, if you’re thinking about becoming a landlord, please give us a call today!

With the end of the financial year fast approaching, now is a great time to purchase a work vehicle or equipment for your business. The Federal Government passed legislation last year to extend and increase the instant asset tax write-off for small businesses. That means if your business is eligible, you could potentially make several purchases up to $30,000 each this financial year, then claim the expenses back on your next tax return – and get the tax-man to help you pay for it!

We’re happy to work with you and/or your accountant to maximise your business cash flow and tax advantages, whatever these may be. We have access to a very wide variety of lenders who offer multiple ways to finance the business items you need.

Here are some popular business equipment finance options to give you a general idea of how we can help.

Finance Lease

The great thing about leasing is that you can access the latest equipment and vehicles with no capital outlay. The lender retains ownership of the asset and you lease it back from them at a fixed monthly payment. Once the lease is up, you can choose to pay a ‘residual payment’ and buy the asset, then potentially trade it in and upgrade to a newer version. Another option is to refinance the residual and continue leasing.

Advantages:

• You’ll know what your payments are and can manage your cash flow accordingly.
• You may be able to claim the lease payments as a tax deduction (speak to your accountant).
• There could be other tax benefits, including potentially making advance lease payments for tax or cash flow purposes (again, it’s best to consult your accountant).
• You may be entitled to claim a GST credit for the GST included in each lease payment.
• There’s flexibility to reduce the size of your payments by increasing the residual amount at the end.
• You can keep your assets up-to-date and some equipment leases can potentially include a service contract.

In addition to finance leases, there are also operating lease agreements. This is when you don’t take on the obligation to pay the residual value at the end. The asset is simply handed back to the lender.

Hire purchase

Again, a hire purchase allows you to obtain the latest equipment and vehicles for your business, whilst preserving your cash flow. With this finance option, the lender purchases the equipment or vehicles you require, then hires it to your business for a specific period. It’s like a finance lease, but when the final payment is paid, your business immediately owns the asset.

Advantages:

• Won’t tie up your cash
• Generally, doesn’t require additional security
• Depreciation and interest on any lease repayments may be tax deductable (check with your accountant)
• You own it at the end of the hire period.

Chattel Mortgage

A chattel mortgage is another type of finance option that works well for businesses. The financier secures the loan using the “chattel”, or the vehicle or equipment you purchase. You take ownership of the asset, and the mortgage is registered with ASIC. Once the loan is paid off, the mortgage is removed, and the vehicle or equipment is officially yours.

Advantages:

• If you’re registered for GST on a cash basis, you may be able to claim the GST in your vehicle’s price up-front through your next Business Activity Statement (BAS), (check with your accountant).
• GST is not payable on your repayments
• You may be able to claim depreciation and the interest charges on your chattel mortgage as a tax deduction (again, consult your accountant)
• Lower interest rates generally apply as finance is secured against the asset
• You may be able to decrease your regular repayments by paying a deposit upfront, trading-in a vehicle, or opting for a balloon payment at the end of your loan term
• You can manage your business cash flow more effectively.

Loans and other finance options

In addition to these popular ways to finance vehicles, machinery and equipment for your business, we can also offer a wide variety of business loans – both secured and unsecured. These can be used for anything from equipment purchases to inventory control and cash flow management.

Whether your business finance needs are straightforward or more complex, we can help you find the right solution. Our business lender panel includes peer-to-peer lenders, private funders and major banks. Best of all, we offer fast turnaround times – we could potentially get your finance approved in as little as 48 hours*.

Remember, EOFY is sale time for vehicles, IT, machinery and equipment – so there may also be bargains to be had. Contact us today and we’ll get the ball rolling on your finance in plenty of time to make your purchases before June 30.

The busy Autumn selling season is in full swing, with many property bargains available as the housing market correction continues across the country. With the Federal Election looming this weekend, we can expect to see property market activity to slow a little too. Meanwhile, economists predict there may be good news on the horizon for home owners, with the possibility of an RBA rate cut increasing after the Federal Election is over.

Interest rate news
As expected, the Reserve Bank of Australia (RBA) decided to keep the official cash rate at 1.5% during its May meeting.  Early in April, many banks cut rates on Fixed Rate Home Loans in anticipation of RBA rate cuts later this year.

During the last week of April, the Australian Dollar went on a surprising slide below US$70c after the US Federal Reserve failed to cut interest rates, despite demands from President Donald Trump. Analysts predict the RBA is likely to cut rates in order to stimulate a continuation of this trend, as a lower Aussie Dollar will be great news for our economy.

Home value movements
During April, the housing market correction started to have a significant impact on homeowners. According to ANZ, almost 5% of households have slipped into negative equity on their home loan. (That’s where you owe more on your home loan than the current market value of your home).

The Housing Institute of Australia has also indicated that several hundred thousand new apartments and units are about to hit the market, which may cause home prices to fall even further.

Nevertheless, analysts are still saying home values should start to recover in 2020, so the current market conditions are only likely to affect homeowners wanting to sell this year. Meanwhile, it’s a great opportunity for those looking to get onto the property ladder – particularly for first home buyers looking for bargains at the lower end of the market.

Property market activity
Despite the housing market correction, the Autumn property market has been very active, with more homes now being sold via private sales than auctions. The table below shows property market activity as at May 6, 2019.

If you’re in the market for a bargain, see us about a pre-approval!
Just a reminder that bank lending criteria have tightened over the past 6 months, so it’s important to see us to check your borrowing power and to get a pre-approval on a home loan if you’re in the market to buy property.

Please call us today to find out more.

Sincerely,
Mike & the Element Finance Team

Laws have been introduced to make it harder for landlords to refuse requests by tenants to keep pets, in most states. However, allowing pets to live in your investment property can be a double-edged sword. On the one hand, you’ll have a wider pool of prospective tenants, potentially increasing your rental returns and helping you to retain tenants longer. On the other hand, there is also the potential for pets to cause damage. So, what can you do to protect your investment?

Catering for pets in your investment property could help your tenants prevent their pets from causing any serious damage. Here are some great tips for catering for ‘fur-children’ in your investment property!

Modify the property to make it pet-friendly

Since you may not be able to avoid renting to tenants with pets, you may like to add pet-friendly features to reduce the risk of damage to the interior of the property. Providing facilities to help your tenants keep their pets outdoors will minimise the time they spend inside the house, which may save you money in the long-run on maintenance and repairs.

For example, a secure cat or dog door will make it easier for small pets to get out. This will reduce the need for litter trays and discourage them from doing their business inside. It will also eliminate the tendency to scratch at a door or flyscreen when they want to go out.

Include some outdoor features for pets

One necessity for pet owners is a well-maintained fence to keep their fur-children safe when outdoors. Ensure there are no gaps where a pet can easily escape. The risk of a pet getting out is likely to cause your tenants to leave their pets inside the house, rather than in the yard and over time, this is likely to cause the kind of damage you want to prevent.

Another great idea is to provide a pet enclosure or pen in the garden, with a covered area where pets can take shelter from the sun and rain. If your tenant has a large dog, they will think this is a great option and may even pay more to rent your property. Cat lovers will also appreciate a secure enclosure where their cats can enjoy the sunshine and fresh air without being left to run loose – many councils make it illegal to leave a cat outdoors after dark, and busy roads are always a worry.

Additionally, it may be a good idea to modify the garden to make it low-maintenance and suitable for pets. Rather than worry about the pets digging up your expensive landscaping, keep things simple with grassy areas and plenty of bushes and shrubs for shade.

Avoid expensive carpets

With an investment property, it’s best to choose flooring that will be durable and easy to keep clean in the long-run. Carpets are never a great option as they breed dust mites and are a hazard for asthma sufferers – but throw a pet into the mix and things can get smelly! Hard flooring – like tiles or laminate – is likely to be a better option, as it wears better than carpets over time, and is much more resilient to those little accidents which often occur with even the best trained house pets.

If your property already has hard wood floors, simply take up the carpets and get them sanded and polished. Alternatively, there are some great inexpensive vinyl flooring options that look fantastic and are extremely easy to clean and maintain.

Consider taking out landlord insurance

Before tenants with pets move in, it’s a good idea to consider taking out landlord insurance. Importantly, make sure your policy covers damage caused by a domestic pet or animal residing in your property. This is not always the case, so be sure to read the fine print.

Pet-friendly rental properties are often in high demand, and as an investor, it may work to your advantage to allow pets into your property. It will certainly give you access to a wider market of renters, some of whom may be willing to sign longer leases and/or pay higher rents for your property if you cater for their pets the right way.

If you’re in the market for an investment property, or you already own one but are considering renovating or refinancing, we can help you obtain the right loan for your needs. Please get in touch today!

Which home loan is right for you? How can you tell when there’s so many different lenders, loan types and features to choose from? How can you compare loans properly when you’re not sure what you should be comparing?

Finding the right home loan for your situation is a process that can be confusing, particularly for first-timers. In this article, we give you a basic guide for making home loan comparisons and tell you more about the features you may need with your home loan.

Interest rates and comparison rates

Interest rates are one of the factors which determine the cost of your mortgage and how much your repayments will be. Even a small difference in interest rates can make a significant impact on the amount of interest you’ll have to pay over the term of the loan. However, the loan with the lowest interest rate may not necessarily be the cheapest, as there could be additional fees to factor in. This is where the comparison rate comes in.

The comparison rate is an indication of the true cost of a loan, once the interest rate and fees are included. It’s usually expressed as a percentage, which makes it easier for you to compare the real cost of different loan products. When choosing a home loan, it’s important to look at both the comparison rate and the features that come with the loan.

Loan Types

Principal and Interest

This type of home loan requires you to make repayments that cover both the principal (or the amount you borrowed) and the interest at the same time. People buying their own home usually use a principal and interest loan, as you pay down your loan with every repayment until you eventually own the property.

Interest-only

An interest-only loan allows you to only pay the interest you owe on the loan for a fixed period – usually from one-to five years – so the monthly repayment is lower than it would be under a principal and interest loan. At the end of the fixed period, the loan usually reverts to a principal and interest loan, but it is possible to refinance to another interest-only period. People buying an investment property often start off with an interest-only loan because the interest (and therefore the entire repayment) is tax deductible for them. However, they are not considered ideal if you are buying your own home to live in as you will likely end up paying more in interest over the term of the loan and your repayments don’t pay off the original loan amount.

Variable Home Loan

With a variable rate home loan, the amount of interest you pay may go up or down in response to changes in interest rates. This can be a good thing if interest rates go down, as the interest you pay will be less and your repayments will decrease. Another positive is that you can often make extra repayments on a variable home loan, which may help you to pay off your home loan sooner and save some interest over the term of the loan.

Fixed Home Loan

A fixed rate home loan lets you lock in your interest rate for a period (usually 1 to 5 years). The benefit is that you know exactly how much your repayments will be during that time, which can be beneficial if you’re on a tight budget or a fixed income. You’ll also escape any interest rate rises that may happen during the fixed period.

However, if interest rates fall, you won’t be cracking open the bubbly because your home loan interest rate will stay the same and so will your repayments. There may also be restrictions on making additional repayments with a fixed rate home loan.

Split Home Loan

One option that appeals to some homeowners is to fix the interest rate on a portion of their loan and keep the rest variable. This offers the certainty of knowing what your repayments will be on the fixed part of the loan, while you can make extra repayments and enjoy any interest rate drops on the variable part of the loan. It’s a way to get the best of both worlds!

Loan Features

Offset Account

An offset account is a transaction account that’s attached to your home loan. It can save you money on the interest on your home loan and help you pay off your loan sooner because the money in your transaction account is offset daily against your loan balance, and you only pay interest on the difference. For example, if you owe $300,000 on your home loan and there’s $50,000 in your offset account, you’ll only pay interest on $250,000.

Redraw Facility

A redraw facility allows you to make extra repayments on your home loan and then take out the extra repayments you’ve made later if you need to use the money for a different purpose.

What’s right for you?

The right home loan choice is different for everyone. It all depends on your personal financial circumstances and goals. We’re here to help you decide what is right for you and will make recommendations based on what you tell us about your situation and what you want to achieve. Then we’ll compare the choices from the different lenders and offer you a selection of cost-effective options.

Don’t wait to find out what’s right for you. Call us today for a chat about your plans.

Renovating your home or investment property is a fantastic way to add value. But what’s the right way to finance the renovation project you have in mind?

There are several ways to finance a renovation – the option that will work best for you depends on the size of your project, your budget, financial circumstances and your goals. Your mortgage broker is an expert when it comes to helping you choose the right loan option for any renovation – here’s an outline of some of the finance options we recommend to get your renovation dreams off the ground!

Line of credit

The benefit of a line of credit is that you only pay interest on the money you use. The way it works is that you apply for a line of credit against your home with an approved limit, then simply use the funds as needed.

You can pay off the balance as you go, then use the funds again later for the next stage of your renovation – much like a credit card. If you want the freedom to pay tradespeople or buy materials whenever you need to, a line of credit may be ideal, particularly if your renovations are ongoing.

Personal Loan

A personal loan is a good option if your renovation costs are relatively small, or you plan to pay the loan off quickly. With a personal loan, you can secure the finance against an asset, such as property or term deposits, or opt for unsecured finance without collateral (this option usually has a higher interest rate). The application process is usually quicker than for a home loan and the money is deposited into your account for you to use as required.

Interest rates on personal loans are usually much higher than home loans, however we have access to competitive rates, so we can potentially help you save. Depending on how and when you plan to pay back the loan, you can choose a variable or fixed rate option. Many personal loans allow extra repayments so you can pay it off sooner and reduce the interest you’ll have to pay, so talk to us about the right one for your needs.

Construction Loan

Construction loans are a great option for larger renovation projects that require a builder. This could include anything from a small extension to a complete knock-down and rebuild. With a construction loan, the lender will use the final value of the property post-renovation to calculate how much you can borrow. Once approved, you can draw down periodic progress payments at different stages of construction.

A construction loan offers significant benefits for larger renovation or building projects:

• You only pay interest on the money you draw down.
• The payments are interest-only during construction.
• Each stage must be inspected and completed before you can draw down the funds for the next stage. This helps to keep your builder on track.
• The loan converts to a home loan of your choice after construction is completed.

Refinance to access equity

When you refinance your home loan to access your equity, you end up with a sum of cash to use as needed or to finance your renovation project. Refinancing your home loan could be a good idea if you’re ahead on your loan repayments, your property’s value has increased, or you’ve paid down your home loan considerably since you took it out. (It may not be a good idea if your property has fallen in value, or your financial circumstances have changed for the worse since you purchased it.)

Refinancing may also allow you to access other useful features such as a line of credit, or a redraw facility – which could be useful if your renovations are ongoing. It’s important to remember you may not be able to access all your equity – so talk with us and we’ll help you work out your borrowing power.

What’s right for you?

Whether you’re planning to make a few cosmetic improvements or give your property a complete overhaul, chat with us about the finance side of things. The right loan choice will depend on where you’re at financially and what you’re hoping to achieve. For example, the finance we recommend for those renovating their own home may be different from what we’d suggest for those renovating an investment property, or those flipping for profit.

If you’d like to find out more, just give us a call today.

Autumn is usually the busiest time of year for property auctions around the country. But this year, many more sellers seem to be preferring private sales to auctions. While the number of auctions may be down, there are still many great homes up for sale and you may have more power to negotiate the price!

Interest rate news
The Reserve Bank of Australia (RBA) decided to keep the official cash rate at 1.5% during its April meeting – taking a ‘wait and see’ attitude before the Federal Budget was released. The measures that were announced in the Budget to support economic growth are likely to influence the RBAs decisions in coming months. Many analysts are still calling for cash rate cuts, however this is probably a situation the RBA would rather avoid.

Meanwhile, last month some lenders cut rates on fixed rate home loan products. These are highly competitive at present and may be worth considering if you’re in the market for a loan.

Home value movements
Stephen Anthony, Chief Economist with Industry Super Australia was recently quoted as saying: “The housing price correction is really scaring the horses…” But despite this and similar commentary in the media, home value falls have slowed considerably over the past month. The ACT and Tasmania have even been enjoying home value increases in recent months.

A market correction is quite normal following a lengthy period of steady gains. This property market correction may be considered great news by those who have been waiting for a better time to get on the property ladder. Some areas are holding value better than others, so it pays to do your research before putting down a deposit.

Property market activity
The number of auctions and clearance rate figures continue to decrease as private sales numbers rise. The table below provides a snapshot of last month’s property market and home value changes during the last week of March, (according to CoreLogic on April 1).
Pre-approvals are more important than ever
In today’s market, it is very important to see us to get a pre-approval on your loan before you start shopping for a home. Don’t be tempted to put down a deposit before you see us – your borrowing capacity may have been affected by the more stringent lending criteria that have been put in place following the Royal Commission enquiries.

Remember, we have many lenders to choose from and are well placed to help you find the right home loan option for your needs. Please call us today to find out more.

Sincerely,
Mike & the Element Finance Team

Some property market analysts are predicting average national home values could fall by 11 per cent in 2019 – and say home values in some suburbs of Melbourne and Sydney have already fallen by more than 7 per cent since they reached their peak in late 2017.  Whilst this may seem like gloom and doom to some people, all over the country many prospective home buyers are feeling optimistic and getting ready to grab a bargain.

When it comes to buying a property, supply and demand determines who gets the upper hand on price. So now, with home values and auction clearance rates continuing to fall, is it officially a ‘buyer’s market’ yet?

What is a buyer’s market?

The term ‘buyer’s market’ usually applies when buyers have more power in the property market than vendors (or sellers) and therefore, have an advantage when negotiating the final price for a home. Basically, a buyer’s market occurs when there are more properties for sale than there are people willing and able to buy them.

Signs that we may be encountering a buyer’s market could include:

• Unusually high numbers of properties for sale in any given city, suburb or area
• Low auction clearance rates
• More vendors preferring private sales over auctions
• Property remaining on the market for longer
• Vendors more prepared to negotiate on price.

Does this mean it’s a good time to buy?

A buyer’s market could be a fantastic time to purchase a home, provided you research your purchase very carefully. There are some risks involved, but if you perform your due diligence and select the right property, you should be able to overcome them.

You will need to be careful not to overpay for any home you purchase in a buyer’s market, so the right property market data will be critical to your negotiations. Additionally, if the price of the property you buy should continue to fall, you may potentially find yourself in a negative equity situation – that’s where the home is worth less than you have borrowed to purchase it.  But careful research and a 20% deposit could help you avoid this situation too.

Generally, it makes good sense to purchase a home when prices are low. If you plan to live in the home for a while or hold it as an investment property in the long-term, then you will likely be able to wait out the peaks and troughs of home value changes to eventually come out on top.

Should you wait and see if prices fall further?

The problem with taking a ‘wait and see’ attitude is that it may cause you to miss the opportunity to save – home values won’t continue falling for very long. The great thing about a buyer’s market is that there are plenty of properties available and more time to explore them because they’re on the market for longer.

When researching which property to buy, the same rules apply as always – you need to look at what drives demand and capital growth in your area of interest:

• Is the property close to public transport, schools and amenities like shopping?
• Are there good employment opportunities?
• Is the local economy growing?
• Is there steady population growth?
• Is rental demand high in the area?
• Do the numbers add up – will the property give you a good return on your investment?

Get your finance in order first.

In our next article this month, we talk about why it is now so important to get pre-approval on your home loan and to confirm your borrowing capacity before looking to make a property purchase. As always, it’s a good idea to get your finance in order before you consider putting down a deposit or signing a sales contract, so please give me a call today.

It may be a buyer’s market, but when property prices are falling, buyer confidence often goes with it. However, the possibility of paying too much is not the only risk a home buyer or property investor can face when market conditions are undergoing significant change, as they are now. In this article, we outline some of the other potential pit-falls and tell you how you can avoid them when buying a home this Autumn.

1. Pre-approvals are more important than ever

A loan pre-approval means a lender has assessed your financial situation and determined how much you can borrow. It’s a good indication they’ll give you a formal loan approval later.

Banks have been tightening their lending criteria and this is one of the things influencing falling property prices. Fewer loans are being approved, and the size of loans being approved has also reduced. Home buyers who could easily get finance a year ago, are now facing much more rigorous tests to get loan approval.

Under no circumstances should you place a deposit on a property until your loan pre-approval is confirmed – otherwise you may risk losing your money.

2. Get lender approval on your property selection

Did you know that a lender can reject the property you want to buy, even if they have given you a pre-approval on a loan big enough to buy it? You can reduce the risk of lenders rejecting your home selection by asking us to confirm you have chosen a viable property before putting down your deposit.

There are several reasons why a lender may not give you final approval on a loan for the property you want to buy. The main reason is negative equity risk.

Negative equity is when the amount you have borrowed becomes more than the market value of the home. There is a risk this can occur due to falling home values. For example, in 2018 many off-the-plan homes were unexpectedly valued at less than the contract price upon completion and some buyers were unable to get the loan approval they needed to complete their purchase without topping up their deposit.

To avoid a negative equity situation, a deposit of at least 20% is recommended. If buying off-the-plan, it is also recommended you insert a clause in the sales contract confirming the final price will not be more than the market value of the property upon completion.

The other reasons a lender may not approve your loan is if the property is in poor condition, in a remote or unpopular location, or is too small (less than 52sqm).

3. Ask more questions

Research is key when buying in a falling market. Ask more questions about the underlying factors that drive capital growth to ensure the property will hold its value and you’re not paying too much – look at local employment rates, proximity to schools, public transport and other important amenities, rental demand etc. You can also contact us to access free reports that have this information.

4. Keep your broker in the loop!

Remember, it’s a buyer’s market and with careful research you can buy with confidence. If you want to secure a bargain this Autumn, then call us now to confirm your borrowing capacity and get pre-approval on a loan. In addition to helping to protect you from risk, a pre-approval will help you move quickly when you find the right property and negotiate strongly to get the right price. Call us for a chat about your plans today.

You may have heard the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has made some recommendations about changing how mortgage brokers get paid. There’s been a lot of noise in the media, so we thought it might be a good idea to update you about what’s going on and how it may affect you as a home loan customer – but first, we’d just like to say that it’s business as usual for the time being.

We’re here to help you with great service for all your finance needs – and we’ll be keeping your best interests at heart, as always.

So, what’s going on?

The Royal Commission has recommended that lenders no longer pay mortgage brokers a commission and that borrowers should pay their mortgage broker a fee instead.

As a home buyer who understands all the benefits of using a mortgage broker, you may find this recommendation quite troubling. The last thing you need when you’re buying a home is to come up with more money for mortgage broking fees, right? And with the loan application requirements becoming increasingly complex, how would you get by without one?

Unfortunately, these are not the only considerations regarding the Royal Commission’s recommendation. Changing to a borrower-pays system could have a seriously negative impact on competition in the home loan market and this could prove to be disastrous for everyone.

How would reducing competition affect you?

Over the last 20 years, the work of mortgage brokers has driven competition in the home loan market. Our work in providing home loan customers with choice and value has forced banks to cut their own profit margins and keep your fees and interest rates down. Almost 6 out of every 10 (59.1%) home loans go through a mortgage broker and this keeps banks on their toes and working to constantly improve their loan products.

If the proposed changes were to become law, many consumers would not be able to afford our services and our businesses would struggle to survive. Without brokers:

• Too much power will go to the big banks, which could drive your loan costs up.
• Smaller lenders may have to exit the home loan market, reducing competition.
• This will result in less choice of loan products and less access to credit.
• You’ll get no assistance understanding increasingly complex loan criteria.

People who need a broker’s help the most – young people, low income earners, those who have difficulty understanding the home buying process – may never get the assistance they need to achieve the great Australian dream of owning their own home.

Changing to a borrower-pays system would not just be a tragedy for those people, it may put our entire economy at risk in the long-term. A healthy, competitive property industry is a major driver for Australian economic growth and provides a great deal of employment.

What can we do about it?

The mortgage broking industry has united to get behind mortgage brokers and to support the continuation of healthy competition in Australia’s home lending market. You may have seen the TV commercial from the Mortgage and Finance Broking Association of Australia (MFAA) promoting the service, value and choice that we mortgage brokers provide to you.

You can assist us, and all Australians, by pledging your support  for mortgage brokers at #ChoiceMatters, change.organd Your Broker Behind You.

Once we’ve collected enough pledges, the Government will be forced to listen to what we have to say about preserving broker commissions and upholding your right to a competitive lending market that provides you with genuine choice and personalised service.

Thank you for supporting our business. If you have any questions, please just give us a call.

Autumn has arrived and as the weather cools, property markets around the country are starting to heat up. Auction numbers and clearance rates are a bit low for this time of year, but private home sales are going along quite strongly.  Nevertheless, home values are continuing to fall in many areas, and if you’re in the market to buy a home at a bargain price, there are plenty of houses and units up for sale.

Interest rate news
The Reserve Bank of Australia (RBA) decided to keep the official cash rate at 1.5% during its March meeting. Concern about the impact of the declining housing market on our economy has led to speculation by analysts about the RBA cutting rates by up to 50 basis points (or half a percent) by mid-2020. But right now, it’s a wait and see game and according to the RBA, rates could go either way.

Home value movements
According to Economist, Cameron Kusher at CoreLogic, “…it is looking inevitable that dwelling values will fall further over the coming months.” This is great news for home buyers and property investors who have been waiting for a more favourable time to get on the property ladder.

Some areas are holding value better than others and it pays to do your research before putting down a deposit. The biggest declines in home values over the last month have been in Darwin where prices fell 1.67% and in Perth where they fell 1.46%. As expected, ‘market corrections’ in Melbourne also brought values down by 1% and in Sydney, 0.97%.

Changes to home values were less dramatic in other areas, with regional centres holding value quite well. Brisbane/Gold Coast home values declined just 0.25%, and Canberra 0.19%. However, home values were up in Adelaide by 0.04% and in Hobart by 0.82%.

Property market activity
When property prices are stagnant or falling, conditions tend to favour buyers and vendors are more likely to choose a private sale over an auction to achieve their price. As a result, the number of auctions and clearance rate figures are decreasing as private sales numbers rise. The table below provides a snapshot of the property market at the end of February.

If you’re in the market to buy a home or invest in property, be sure to read our articles this month about how to take advantage of our current buyer’s market  and avoid any risks. If you are wanting to buy a home, a home loan pre-approval is very important in this market, so please call us to chat about your plans today.

Sincerely,
Mike & the Element Finance Team

Valentine’s Day makes us think about loyalty – which is an admirable quality in any relationship. But is your devotion to your home loan provider justified?  It’s important to ask your mortgage broker to help you review your home loan from time to time. We’re here to check the interest rate, review it’s features and make sure it’s still giving you everything you need and desire.

Here are some tell-tale signs that it may be time to part ways with your current lender and start afresh with someone new.

Your home loan is getting old

Without suggesting you go on ‘Home Loan Tinder’ and start ogling a new lender every week, we have to say the days of staying with the same one for 30 years are long gone. If you’ve had your home loan for more than two years, it could be time to review it. The home loan market is increasingly competitive and new products are being released all the time.

For example, take offset accounts. These transaction accounts are linked to your mortgage, and any money you deposit is offset against your outstanding loan balance, saving you money on interest. They just keep getting better and better, with a larger proportion of your loan available to offset.

Another popular option is a redraw facility. This allows you to make extra repayments on your mortgage and save on interest, without committing to a shorter loan term – you can access and withdraw those extra funds at any time.

The honeymoon period is long gone

When you first take out a home loan, lenders may offer you a sweetheart deal to get you in the door. It’s not uncommon for them to waive fees or discount interest rates to new customers – this kind of loan arrangement is frequently referred to as a honeymoon period or honeymoon loan. But once the honeymoon is over, the loan may revert to a more expensive or less convenient loan than you would like. If that’s the case, it’s time to look at new options.

Your lender doesn’t listen to a word you say

Nobody likes to nag. If you’re always chasing your lender about rates or ways to save, it may also be time to hit the bricks. Similarly, if you’re sick of talking to a voice recording over the phone and crave real human interaction, there may be other lenders who place greater importance on giving you the attention you deserve. If this is the case for you, ask us about our home-brand home loans, where we provide you with the after-care service ourselves.

Your needs are not being met

Maybe you’ve scored a higher paying job and want to pay down your mortgage faster. Perhaps you’re adding to your family and temporarily need to rely on one income for a time. If your needs have changed, you may find it more fulfilling to be with another home loan provider and a mortgage that marries with your current financial circumstances and goals.

Remember, there are plenty of fish in the sea!

As your mortgage broker, we can access 100s of loan products from a wide variety of lenders. We’ll also know which lenders and products are right for you, considering your personal financial circumstances and goals. Let us be your match-maker!

Don’t stay in an obsolete relationship with your lender. If you’d like to know more, or would just like a home loan health check with no obligation to switch lenders, please get in touch.

When it comes to buying a home, bigger is better, right? Maybe not. All over the world, people are changing their attitude to the size of home they live in. This is particularly true amongst millennials, and if you’re looking to build your first home to take advantage of stamp duty concessions and first home owner grants, there may be many advantages to thinking small.

What are the benefits of building a small home?

• They cost less to build because they require less labour and materials
• Can often be pre-fabricated, so can be built more quickly
• A small home requires a smaller plot of land
• They use less energy – it’s easier to minimise your carbon footprint
• Less maintenance costs
• You can pay off your mortgage sooner

What qualifies as a small home?

A small home can be anything from a cabin in the woods to a city high-rise apartment, or a unit in the suburbs. The concept also paves the way for a much more creative approach to home design, and many smaller homes are made from re-cycled materials like old shipping containers, or wood and bricks from demolished homes.

If you’re interested in building a small home, you could consider employing a reputable builder of granny flats and/or modular homes. In Australia there are a great many to choose from, and this option has benefits like helping you build a more luxurious small space home, as you can collaborate on the design. These builders often create small space homes in the factory, then transport it to your site partially built, which helps to save on costs.

In Australia, it can be difficult to get a mortgage for a home or apartment that is less than 50 square meters and many councils will not approve plans to build homes or apartments smaller than this. Before you build or put down your deposit on a small home, you should check with your local council about relevant building regulations in your area and talk with your mortgage broker to ensure finance can be arranged.

What is the Tiny House Movement?

The Tiny House Movement is a group of people all over the world choosing to live in houses or apartments with no more than 50 square metres of interior space. That’s about one quarter of the size of the average home. In the USA, the movement is so popular that it’s driven at least three successful TV shows dedicated to tiny house living. However, here in Australia, if your tiny home has wheels, you could find it bogged down in red tape.

Things to note about building a tiny or smaller home

Almost all councils in Australia treat small homes the same way they would any other building on your property, however if it has wheels it may be considered a caravan or trailer, regardless of whether it is rurally located or in the suburbs. You need to check with local authorities first before you build anything and get the proper approvals on your plans.

Building regulations apply to all homes, not just small homes and ones with wheels. If you are converting a couple of shipping containers into a home, for example, you will still have to ensure you modify them in such a way that your new home meets local building codes.

Additionally, not all lenders have an appetite for financing tiny homes or small space apartments and units. It pays to chat with me, your mortgage broker, about your plans before proceeding. That way, we can get pre-approval on your construction loan with a suitable lender, so you can go ahead with confidence. There are several ways to finance a new-build home, whether it’s tiny or not, so please give me a call today to get the ball rolling.

Considering buying a property off the plan? It sounds good in theory, with the possibility of stamp duty concessions and other benefits for first home buyers. But in 2018 there were quite a few people who got caught out by the hidden risks. Read on to find out what you need to know if you’re thinking about buying off the plan this year, or if you’re having second thoughts about an off the plan purchase.

What does ‘buying off the plan’ mean?

When you buy ‘off the plan’, it means the property you’re buying is not built yet. Typically, you’ll only have to pay the deposit upfront, then the balance of the purchase price once the property is completed. Because an off the plan purchase is a new build home, you may qualify for stamp duty exemptions or first home owner concessions, depending on your circumstances. (Check your state or territory’s rules online).

What are the risks?

Lenders may offer conditional approval for off-the plan purchases, but they won’t lend you the funds until they have performed a valuation of the property upon completion. In 2018, many buyers were caught out because their off-the-plan property was valued at less than the agreed purchase price and the lender would not lend the amount required to complete the sale.

There may also be other risks with purchasing an off the plan property, including:

• The final product may differ from your expectations.
• There may be delays or the development may not proceed. Your deposit should be refunded if this happens, but in the meantime, your money will have been tied up.
• If the developer holds on to your deposit (rather than putting it in a trust account), your money may be at risk if the developer goes bankrupt.

Terminating an off-the-plan contract

Terminating an off-the plan contract can be tricky, but there may be grounds to do so. For example, if the vendor has engaged in misleading conduct or the developer doesn’t complete construction before the sunset date, you may be able to terminate the contract.

However, if you want to terminate the contract because a lender has valued the completed property at less than the agreed purchase price, you may have difficulty. You could potentially lose your deposit and may have to compensate the developer for any loss.

Seek legal advice about your options if you wish to terminate an off-the-plan contract. More importantly, ask your solicitor to examine any contract before you sign, to ensure you have appropriate exit clauses in place – more about this below.

Selling before settlement date

Some buyers decide they want to sell the property before settlement. This is legal under most off-the-plan contracts and can prove to be lucrative if the property’s value has gone up, but there are risks involved.

Key considerations:

• Have your conveyancer check that the contract allows for re-sales prior to settlement.
• Speak to your accountant about the tax implications of reselling the property (you’ll likely be up for capital gains tax).
• You’ll have to pay stamp duty, additional legal fees and any agent’s commission, so be sure to factor these costs into your calculations.
• If you find a buyer but your contract with them falls through, you’ll still be bound to settle with the developer.
• Ask the developer to include a clause in the contract that allows you to terminate it if the completed property is valued at less than the agreed price.

Talk with me before you get started

If you do decide to go ahead with your off the plan purchase, I can help to organise pre-approval on your home loan and help you choose a lender that will work with you on this type of purchase. I can also refer you to a reliable conveyancer or solicitor to help you avoid the legal pitfalls. If you’re having difficulty organising finance to complete an off the plan purchase, please get in touch asap!

We hope you survived all the madness of back-to-school week and returning to work after the summer holidays at the end of January! While February is certainly a busy time of year in most households around the country, it isn’t always the same story in our property markets. The quiet season has resulted in falling home values and low auction clearance rates in almost every capital city around the country.

Interest rate news
This month, the Reserve Bank of Australia (RBA) met for its first meeting for the year and elected to keep the official cash rate on hold at 1.5%. Meanwhile during January, some lenders increased home loan interest rates slightly to account for the rising costs of borrowing, while several smaller lenders reduced rates to make their offer more competitive.

Property market activity
Whilst there was a significant drop in new property listings in December 2018, SQM Research revealed the total number of property listings in our major capital cities surged. This is an indication that property is taking significantly longer to sell, with more vendors favouring private sales with no time-limit in order to achieve their desired price.

For the last weekend of January, Victoria held only 44 auctions with a 59% clearance rate, however there were 850 private sales. NSW held 17 auctions with an 82% clearance rate, and there were 963 private sales. ACT held 17 auctions with a clearance rate of 82% but there were only 56 private sales. South Australia held 142 auctions with a 42% clearance rate and private sales reached 229. Western Australia held 57 auctions with a 40% clearance rate and there were 335 private sales. Queensland held 24 auctions with a 71% clearance rate, but there were a whopping 832 private sales. Northern Territory had no auctions and 7 private sales, whilst Tasmania had only one auction and 155 private sales.

Home value movements
When property prices are stagnant or falling, conditions tend to favour property buyers as vendors are more likely to negotiate. According to figures released by CoreLogic, vendors are now having to offer bigger discounts to sell their properties – the median discount was 6.1 percent across the last three months to the end of January 2019.

As a result, during January home values fell in every capital city month-on-month, except Canberra where there was a small increase of 0.22%. Victoria experienced a drop of 1.60%, NSW 1.35%, QLD, 0.26%, SA 0.34%, WA 1.06%, NT 1.69% and Tasmania 0.16%.

If you’re in the market to buy a home or invest in property, there are certainly bargains to be had. Thorough research can help you determine locations that are still experiencing capital growth. If you need help with finance or would like to consider refinancing your current home loan, please don’t hesitate to give us a call.

Sincerely,
Mike & the Element Finance Team

How are your New Year Resolutions coming along? If you’re serious about achieving the goals you’ve set for yourself, creating a plan is the way to go. Of course, making a plan is easy when you’re talking about losing weight or exercising more (the world’s most popular choices for NY Resolutions every year), but achieving your property goals may take some professional support from your mortgage broker. Here’s how we can help.

NY Resolution #1: “I’m going to buy my first home in 2019!”

Buying your first home is exciting and 2019 could be the year to do it. Home values have ceased their rapid rise for the time being and home loan interest rates are still low.

Here’s how your broker can help you get on the property ladder for the first time:

Creating a budget for your purchase and a savings plan for your deposit.

Exploring alternative ideas for a deposit (like a guarantor’s home loan, for example).

Providing advice about clearing debt and/ or improving your credit report to make you a more attractive prospect for lenders.

Explaining your borrowing capacity (how much you can afford to repay and how much a lender will lend you based on your income and expenses).

Going through any grants, concessions or other initiatives like the First Home Super Saver (FHSS) scheme to get you into your own home sooner.

Explaining the different types of home loans and how you can use them to save money.

Comparing the market to help you find the most suitable home loan for your needs.

Referring you to reputable professionals such as valuators, conveyancers and solicitors, accountants etc.

Organising pre-approval on your home loan so you know how much you can spend and save time on your property search.

Overseeing all the loan application paperwork.

Offering support throughout your entire home ownership journey and beyond. We can answer your questions at any time to ensure your home loan remains competitive.

NY Resolution #2: “I’m going to move into my next home in 2019!”

Upsizing, downsizing, sea-change, tree-change – whatever your motivation for moving into your next home in 2019, just ask us to help you make it happen! Even if you already know the drill for purchasing a home, it’s worth having a professional on your team when buying your next place. There’s a lot more to consider. Ask us about:

Using the equity in your current home as a deposit for your next home.

The costs involved.

Bridging finance.

Property and suburb reports to help guide your purchasing decision.

NY Resolution #3: “I’m going to invest in property in 2019!”

A goodie for 2019! We can help with:

Working with your accountant and/or financial planner on your investment strategy.

Structuring your loan correctly to maximise the tax effectiveness of your investment.

Comparing the loan market to find the right loan products to meet your investment strategy.

Getting loan pre-approval and ensuring your loan application goes smoothly.

Crunching the numbers (for things like your anticipated rental yield or out-of-pocket costs).

Comprehensive suburb and property reports to help you choose the right property.

Accessing equity in your home or from another investment property to use as a deposit.

Offering referrals to reputable property managers and other professionals.

If you have a 2019 property goal, give me a call!

A goal without a plan is just a wish, so let’s start planning and make your goals a reality this year. Please get in touch with us at Element Finance today!

According to a recent news report, more than 900,000 interest only (IO) home loans will come up for refinance during the first quarter of 2019. This kind of loan is very popular with property investors, however, the recent tightening of lending conditions in this area of the market may make it difficult for some people to refinance to another interest only period on their loan.

So, what are IO home loans, what are they used for and how can your broker help you if the IO period on your home loan is about to come to an end?

What is an IO home loan?

An IO mortgage is where your repayments only cover the interest on the amount you have borrowed during the interest only period. That means the principal (the amount you have borrowed) does not reduce. This IO period can be from 1 – 10 years and after it has ended, the loan reverts to a principal and interest loan unless you refinance it.

What are IO home loans used for?

IO home loans are not recommended if you plan to live in the home you purchase, as they only provide short-term benefits and could cost you more in interest over the long run. This kind of home loan offers benefits for property investors because the interest is usually tax deductible. (Always consult an accountant to be sure this applies to you.) It also helps to lower the amount of the repayments in the short-term, which may help property investors to maximise the income from the property.

It should be noted that the principal (amount borrowed) will need to be repaid at some point. There is a risk that the property’s value could fall during the IO period, which could potentially cause a you to make a loss if you were to sell it. It could also make it difficult to refinance the loan at the end of the IO period without topping up the equity in the loan.

Why could it be difficult to refinance for some?

In 2016, the Australian Prudential Regulation Authority (APRA) – which is the regulator for the home loan industry – imposed a cap restricting IO home loans to 30 per cent of bank’s new mortgages and at the same time, imposed a 10 per cent annual growth cap on lending to property investors. These restrictions mostly applied to the big banks, as APRA felt they were over-exposed to risk if the property market should suffer a down-turn. This has caused a general tightening of lending criteria for property investors across the board.

In December last year, APRA lifted their restrictions. However, the tighter lending criteria for property investors and IO loans are still in place with the big banks, which could make it difficult for some to refinance or extend their IO period on their loan.

What if your IO period is about to end?

As your mortgage broker, I can help you access a wider variety of lenders, which could give you more options if you are looking to refinance your IO loan this year. We have access to Australia’s leading lenders, including the usual big banks and credit unions, as well as smaller, private lenders you can only access through a broker. Not all mortgage brokers can offer you such a comprehensive variety of loan options, so you can be sure that we will be able to access loan products that suit your needs and give you value for money.

Refinancing could potentially be of benefit to you in a variety of different ways in your personal situation, so please talk with us about your needs and goals. Your consultation is complimentary, so please just give us a call at Element Finance if you’d like to talk about your options.

Did your Christmas spending get out of hand this year? You are not alone! According to a recent news report, our 2018 Christmas spending binge is expected to leave us with a $29.7 billion credit card debt – that’s equivalent to $1,863 per credit card!

The good news is that mortgage and finance brokers don’t just organise home loans – we’re also fully qualified credit advisors. If you need help to get your debts under control, here’s some info that may help.

What is debt consolidation?

Pay day loans, credit cards, store cards and credit facilities like after-pay accounts often carry high interest rates that can eat up your income and make it difficult to pay off the debt.

Debt consolidation is a way of potentially reducing the amount of interest you pay, making your debts more manageable. Put very simply, the idea is that you take out a low-interest loan and use it to pay off all your high-interest debts, rolling everything into one loan.

What are the options?

There are a couple of ways to consolidate debt. You can:

Refinance your home loan

Refinancing your home loan could help you to access the equity in your home to pay off your debts. Basically, you take out a new home loan that is larger and you keep some of the money to pay off your debts.

Take out a personal loan

This involves using the funds from the personal loan to pay off all your other debts. This is a good option if you want to pay off your debts in a shorter time frame (which could potentially save you much more interest than refinancing your home loan).

What are the benefits of debt consolidation?

It makes debts easier to manage

Instead of having to get keep on track with multiple repayments to multiple parties, debt consolidation means you’ll only have to make one convenient repayment.

Potentially save money on interest

Different types of debt come with different interest rates. For example, credit cards usually have sky-high interest rates, as they are a form of unsecured debt. Home loans and personal loans, on the other hand, usually come with lower interest rates. That potentially means less of your money will be gobbled up by interest payments.

Repayment flexibility

Debt consolidation gives you the option to spread your loan repayments out over time, which could make personal budgeting and repaying your debt easier. You may even be able to get a loan that allows you to make extra repayments and pay off your debt sooner.

To consolidate or not to consolidate?

Using your home loan for debt consolidation purposes is not necessarily right for everyone – it all comes down to your financial situation and goals. Some people, for example, may end up paying more interest on their debt over the life of the loan (25 to 30 years), even though the home loan interest rate is lower than a credit card.

What’s more, by turning your unsecured debt into secured debt (i.e. your home loan), you could lose your home if you default on the repayments. For these reasons, it’s important to speak to a professional credit advisor before proceeding.

Are there other options?

Absolutely! If debt consolidation isn’t right for you, we may be able to suggest other ways to manage your debt – like creating a budget and repayment plan, for example.

If you’ve blown the budget this Christmas, it’s important not to panic. There are many ways to regain control of your finances, so get in touch. If you think your debt levels may affect your capacity to make your home loan repayments – don’t wait! It’s important to get things under control before you miss any repayments. Please call us at Element Finance today.

We hope you enjoyed some quality time with family and friends over the Christmas and New Year break.

Welcome to our first newsletter for 2019. As many people are still on their summer holidays, there’s not much happening in our property markets this month. Few auctions have been listed around the country and most property movements are occurring through private sales.

Property market activity

Declines in property listings are quite typical in summer, however the drop in national property listings in December 2018 was higher than expected at 9.2%. In Sydney property listings declined by a huge 17.7%, Melbourne 17.2% and Canberra 15.5%. Hobart experienced a decline in property listings of 5.8%, Adelaide 4.1%, Darwin 2.9% and Perth 9%.

Home value movements

In 2018, there was a general softening in property values, for both units and houses across the country. Sydney experienced a year on year decline of 8.88%. Melbourne experienced a year on year drop in values of 7.04%. Perth’s home value decline for the year was more moderate at 4.73%. Darwin experienced a year on year decline of 1.54% with most of this fall occurring in December when prices dropped 1.84%.

Other markets experienced year on year growth. Canberra’s yearly home values were up by 3.27%. Brisbane/Gold Coast’s prices were up 0.02% year on year, while Adelaide’s yearly growth was 1.33%. The outstanding performer was Hobart, with an annual home value increase of 8.66%.

Interest rates and lending news

Interest rates have remained stable during the holiday period and we can expect the RBA to keep the official cash rate at 1.5% for some time. The next RBA board meeting will happen on February 5. Some market analysts predict an improvement in economic conditions which may prompt an RBA cash rate rise later this year, whilst others are predicting a cash rate cut. It’s a game of wait and see!

From January 1 the Australian Prudential Regulatory Authority (APRA) removed its 30% limit on interest-only residential property lending. This may prove to be a big bonus for property investors, as it will likely prompt an improvement in lending conditions for them across the board.

What are your plans for 2019?

Did you overspend during Christmas? If you are experiencing a Christmas debt hangover, read our article about how we can help if you’re struggling to organise your finances. We’ve also provided some guidance for those needing to refinance an interest-only loan and ideas for achieving your property goals in 2019. Remember, we’re always happy to chat about your needs and goals so please don’t hesitate to give us a call.

Sincerely,
Mike & the Element Finance Team

It’s been nearly eight years since the Reserve Bank of Australia (RBA) last raised the country’s official cash rate. Interest rates have been at historical lows for quite some time and as a homeowner, you may never have experienced an “official” rise in interest rates.

At present, interest rates remain low and we expect them to stay that way for a while. However, forecasters predict Australia’s economy will continue to strengthen over the next 12 months and as it does, an RBA cash rate rise becomes more likely.

So, how does the cash rate affect interest rates and ultimately, your home loan repayments?

Understanding the RBA cash rate

The RBA cash rate sets the prime interest rate on overnight loans in the money market. In simple terms, it’s the interest rate that every bank must pay on the money it borrows. The official cash rate is currently at 1.5%.

The RBA may decide to change the official cash rate for a variety of reasons. These include:

• stimulating the economy,
• managing inflation,
• controlling fluctuations in the Australian dollar,
• to encourage or discourage consumer borrowing and spending. (For example, a rate rise often stimulates the Australian dollar, which can negatively affect export businesses and our tourism industry).

How would a rate change affect your home loan?

When the RBA makes a change to the cash rate, lender’s interest rates will usually move in line with the change. In recent times, lenders have also been making minor ‘out-of-cycle’ interest rate changes (outside the RBA’s rate movements) but historically, major home loan interest rate changes have been determined by RBA decisions.

Rate changes usually occur in fractions of a percentage point, but this can still have a big impact on the size of your monthly home loan repayments.

So, how do you prepare for a home loan interest rate rise? Here’s a few suggestions that could help to make sure you’re not caught on a financial back foot.

Consider switching to a fixed interest rate

With a fixed rate home loan, your interest rate will be locked in for a pre-determined period. You won’t have to worry about fluctuations in the cash rate or interest rates. Plus, you’ll know exactly how much your repayments will be during the fixed period.

Another option is to hedge your bets and fix part of your mortgage, while leaving the rest variable. This is called a split loan. These options could help to protect you from interest rate rises in the near future, however you will still need to plan and budget for a rise in repayments once the fixed period has ended.

Build a buffer into your home loan

A good idea is to make extra repayments while interest rates are still low, so you can build in a buffer by getting ahead on your repayments. You could also channel any spare money into a redraw facility or offset account. These loan features reduce the interest you’ll have to pay over the life of the loan.

Shop around for lower interest rates now

If your current home loan isn’t competitive, you’ll be left even more out of pocket if rates rise. It may pay to shop around now for a more competitive home loan that better suits your financial circumstances and goals.

Pay down your debts and consider consolidating

It’s a good idea to pay down any variable debt, particularly credit cards, while interest rates are low. Concentrate on paying off debts with the highest interest rates first, then knock over the others.

If you have multiple debts of different types, you may like to consider consolidating everything into your home loan or a personal loan. Consolidating is not necessarily right for everyone, so it’s very important to speak to your broker before proceeding.

As a homeowner, it’s important to be prepared when interest rates head north. If you’d like to know more, please get in touch with Element Finance today. We are always ready and willing to answer any questions you may have, help you save money on interest and find ways to prepare for any future rate rises.

Getting ready to buy your first home? As your mortgage broker, we’re here to help you every step of the way. It’s an exciting time and it’s easy to make mistakes. Here are 5 common mistakes that you should try to avoid!

1. Relying on advice from family and friends

Family and friends are people you can trust, so it’s understandable that you listen to their advice. However, while they may have the best of intentions, it’s always best to seek independent professional advice when buying a property. Things may have changed a lot since your mum and dad purchased their first home, and your circumstances are likely to be different. They may also have made mistakes without even realising it.

As a first-time buyer, you’ll want a team of experienced professionals in your corner. That means a reputable mortgage broker (like me), a solicitor or conveyancer, plus a building and pest inspector. A good accountant can also be invaluable, particularly if you are self-employed. If you need recommendations, please let me know and I’ll give you a referral.

2. Blowing the budget

The last thing you want is home loan repayments you can’t really afford – you might end up eating baked beans for years to come! That’s why it’s so important to have a solid grasp of your financial situation and budget.

As your mortgage broker, I can help you understand your borrowing power and create a home-buying budget. That will help save time when you start looking for your dream home. I’ll also organise pre-approval on your home loan, so that your finance is ready to go.

3. Underestimating the costs involved

Many first home buyers don’t understand the full costs involved in buying a property. There’s a lot to consider – your deposit, stamp duty, lender fees and charges, solicitors fees, and so on.

Then there are the ongoing costs associated with home ownership. These may include rates, insurance, body corporate fees, maintenance and repairs. Remember, if you need help crunching the numbers, I can assist. I’ll also let you know about any grants or concessions you may be entitled to (like the First Home Owner Grant), which could help get you into your own home sooner.

4. Getting the wrong mortgage

As a first-time buyer, getting your head around all the different home loan products out there can be overwhelming. Offset accounts and redraw facilities. Fixed versus variable rates. Split home loans and lines of credit. It’s enough to give you a head spin! It’s important to choose the mortgage that is most suitable for your needs and saves you as much money as possible.

My role as your mortgage broker is to: 1) understand where you’re at financially and where you want to be; 2) compare the home loan market; 3) find you the right home loan, based on your specific financial circumstances; and 4) walk you through the home loan application process.

5. Being blindsided by emotion

When you’re new to the property hunt, it can be easy to let emotions cloud your judgement. However, try not to let your daydreams get in the way of the facts. Do your research to ensure you’re buying the right property for the right price. If you need help, we can give you some guidance about how to research a property properly to make an informed decision.

With careful planning and support, buying your first home will be a positive experience. As your mortgage broker, I’ll help you every step of the way and can refer you to other professionals whom you can rely on. Please call us at Element Finance Fremantle – let’s make your home ownership dream a reality!

Christmas is just around the corner and isn’t it a wonderful time of year? It’s a time for family and friends, a little self-indulgence, of recognising how hard you’ve worked all year and rewarding yourself for your efforts. If you’ve been contemplating a property purchase, why not make that dream a reality? Talk to your mortgage broker about the right finance for your needs today.

Interest Rate News

Thankfully, there was no pre-Christmas surprise this month from the Reserve Bank of Australia. The board decided to leave the cash rate on hold at 1.5 per cent. The central bank’s board will next meet in February 2019.

Property Market News

On the whole, national dwelling values were largely steady in November. Again, Melbourne seems to be proving more resilient than Sydney, with dwelling values up 0.52%. In contrast, Sydney’s housing market saw prices fall -0.72% in November. Canberra’s dwelling values rose by 0.86%, while Hobart experienced 0.64% growth. Things are looking up for property owners in Perth, where values rose by 0.21% in November. The city recorded the first rolling quarterly capital gain since late 2014 (up 0.3% in the three months to November). In Brisbane and Adelaide, there was less fluctuation (0.07% and 0.01% growth respectively). Darwin, like Sydney, experienced a fall in property values – the month-on-month change was -0.42%.

In the week ending December 3, there were 3,276 auctions held across the combined capital cities. According to CoreLogic, the preliminary clearance rate was 63.5% – up from the previous week’s clearance rate of 61.6%. Auction volumes remain in line with last year’s figures, but this time last year the clearance rate was much higher, at 72.3%.

Melbourne and Sydney’s clearance rates picked up compared to previous weeks. In Victoria, there were 1,800 scheduled auctions and a clearance rate of 67%. New South Wales held 1344 scheduled actions and cleared 62% of the stock. Meanwhile, the ACT had the highest clearance rate – 76% on 105 scheduled auctions. Tasmania only held 11 auctions and cleared 67% of stock, while South Australia had 148 scheduled auctions and 65% of properties sold. In Western Australia, 61 properties went to auction and 46% went under the hammer. Queensland held 395 auctions and the Northern Territory had 17. Both had clearance rates of 36%.

As the sun sets on 2018, we’d like to take the opportunity to wish you a safe and happy festive season. Remember, now is a great time to purchase a new property for the New Year, or to re-evaluate your mortgage. If you’d like advice about finding a mortgage that suits your financial circumstances and plans, talk to your mortgage broker at Element Finance Fremantle. They’ll do the hard yards for you, so that you can concentrate on the fun stuff this summer, like playing beach cricket and being with the family. Here’s to an exciting 2019 – hopefully one that includes an exciting new property purchase!

Everyone looks forward to Christmas and the summer holiday season. After all, ‘tis the season to be jolly. To indulge in festive fare. To get out in the great outdoors and enjoy quality time with family and friends. But this year, it could also be the right time to buy a home. Here are 5 reasons why clever property buyers are considering making a purchase this holiday season.

Motivated sellers

Spring is one of the busiest times of year in Australia’s property markets. That’s when all the buyers are out in force and vendors have the best chance of getting their price. If a vendor is still trying to sell come summer, they’re often highly motivated – or even desperate – to get a sold sticker on that notice board.

This year, spring auction clearance rates were lower than they’ve been for a while. Now summer has arrived, there are many more properties on the market than usual. Motivated sellers are good news for you – they may be more willing to negotiate.

Less competition

Looking for a property during spring can be a nightmare. Open home inspections are packed and by the time you decide you might be interested in a property, there’s usually several offers already on the table. This can be frustrating and detrimental to your capacity to negotiate.

If you start your property hunt when others are away on holidays, you can avoid all the hassle and drama. Again, fewer buyers means vendors may be more willing to negotiate.

Lower prices

Traditionally, property prices fall in December. Last year, the average national home price fell by 0.3%. This year, we can expect this drop to be larger than usual – particularly as there was still a lot of properties left on the market at the end of spring. Prices are already starting to drop in our bigger property markets like Brisbane, Sydney and Melbourne.

The moral of the story? Summer could be the time to buy property – it’s a buyer’s market right now and it probably won’t last for long. CoreLogic are predicting home values are likely to move back into growth territory in most markets by June 2019.

More time

There’s no getting around it. Buying a property takes time and energy. It takes considerable research and a lot of time travelling around to open home inspections.

If you’re working full-time, it can be hard to make time to do it right. You’ll likely be devoting weekends and evenings to your property hunt. The solution? Do your research and inspections while you’re off work and on holidays. That way you’ll get it done faster.

Smoother settlements

Nothing motivates people to wrap up a deal quickly like the idea of taking a break. That goes for real estate agents, lenders, vendors and buyers! Things tend to go much more smoothly when demand is less, so you’re more likely to see a hassle-free settlement during summer than a busier time of year. There are also more special home loan offers available during the off-season, so talk to us to find out more.

So, why not put beach life on hold for a while, and spend the holiday season looking for a bargain on a fantastic new home? If you’re in the market to buy, talk to us at Element Finance about getting pre-approval on your home loan now. It could be a great way to start the new year off with a bang!

Mortgage Protection Insurance vs Income Protection Cover

Injury, Illness and death are not often at the forefront of our minds. Unfortunately, these are also the issues that can have the greatest impact on our lives. When people are considering the importance of income protection, some people believe that they have already taken out an income protection policy with their mortgage. However, upon further discussion we discover they often have mortgage protection insurance, not income protection.

With products as complex as income protection and mortgage insurance, it is inevitable that clients can have a misunderstanding as to what cover they have, what they may or may not be covered for and more importantly, who the benefit is designed to protect.

How does Mortgage Protection Insurance differ from Income Protection?
Mortgage Protection Insurance is designed to protect the portion of the client’s income that is used to pay for their mortgage. This contrasts with income protection where one can generally insure up to 75% of their income. Since the income is what services your mortgage repayments (as well as other living expenses), income protection can provide you with greater financial security should the worst occur. Many other differences exist aside from this, they are discussed below.

Your greatest expense will most likely be your mortgage repayments and your greatest need may well be to place a roof over your head. It’s common to reach a point in life where your financial responsibilities increase significantly. However, in the unfortunate event of you needing to claim on your policy, you will most likely find that the range of expenses to be far greater than simply your mortgage repayments. The flurry of additional expenses that are often incurred at such a time, render mortgage protection insurance inadequate. An income protection policy that replaces the large majority of your income would be able to provide for such a time in a far more appropriate manner. An income protection policy also increases in value the longer you hold it, where as a mortgage protection policy would do the opposite.

Example
A client is on $100,000 a year with monthly mortgage repayments of $2,500. They are involved in an accident over the weekend with a broken leg and are subsequently off work for 3 months. Under mortgage protection insurance the maximum payout for this would be $7,500. Under an income protection policy with 1^st day accident cover, the client could be entitled to $18,750 for the 3 months off, a further lump sum of $12,500 for the broken leg, any rehabilitation expenses as well as a range of other ancillary benefits should the need arise. If the same income protection policy had a benefit period to age 65 and the client was not able to go back to work in any capacity, then the policy would pay out until age 65, subject to approval by the insurance company or until the client went back to work.

Summary
Mortgage protection insurance provides you with basic cover that focuses on one particular expense and is often designed to protect the lender and not the borrower. It is not a substitute for a quality income protection insurance policy. Income protection insurance is about protecting more than just the mortgage repayments. Covering 75% of your income and allowing you to protect your lifestyle, if you are unable to work as a result of illness or injury.

Daniel Cox AdvDipFP
Risk Adviser
Authorised Representative No. 339519
Spectrum Wealth Advisers AFSL. 334400
M: 0403976859

After weeks of media speculation, on Tuesday, May 9 the Federal Budget was released. To help you navigate the changes, we have pulled together key insights. To review the full budget release visit: 2017 Federal Budget

Childcare & Education

• A $37.3 billion increase in spending for childcare over four years, has been outlaid in this years budget. This will provide more affordable childcare, including after school care, for around one million families.
• Working parents earning $185, 710 or less will not face an annual cap under the Child Care Subsidy. A $10,000 cap will apply for families earning more than this.
• Education: University fees will rise by 1.8 per cent next year, and 7.5 per cent by 2022, increasing the share of fees paid by students from the current level of 40 percent to 41.8% – which could be up to $3,600 for a four-year university degree. HELP: The income threshold for repayments to higher education loans (HELP) has been lowered to $42,000, meaning students will have to start repaying loans sooner.
• $428 million in funding has been announced for ‘Universal Access’ to support all Australian children to gain access to 15 hours per week of preschool programs, regardless of the setting (this may include day-care facilities) under the National Partnership Agreement.
• An additional $18.6 billion has been allocated to schools over the next ten years under a new needs-based model. 20% of government schools, and 80% of non-government schools will share an increase in funding. On average per-student funding will be increased by 4.1%.

Housing affordability

• A proposed $375.3 million in funding for the new National Housing and Homelessness Agreement (NHHA) will help to provide more affordable housing for the most vulnerable. This funding, which will be matched by State and Territory Governments, will support homelessness support services.
• First time buyers will be able to make voluntary contributions to their superannuation up to $30, 000 to pay for a deposit on a first house or apartment. Similar to a salary-sacrificing program, this will assist with First home owners gaining access to the housing market faster.
• A tax benefit for retirees who are downsizing their homes will allow them to transfer up to $300,000 (per person) into a superannuation fund. This is aimed to encourage retirees who are currently living in larger homes to free up housing stock for young families who are entering the property market.
• SUPPLY: Aimed to address the low housing supply in Australia, the government will divest 127 hectares of surplus Defence land less than 10 kilometres from the Melbourne CBD. This land is large enough to develop up to 6,000 new homes.

Job seekers

• The new Skilling Australians Fund will support up to 300,000 apprenticeships, traineeships and higher level skilled Australians.

Healthcare

• The Budget is investing $2.8 billion for public hospitals.
• An increase in the Medicare Levy to 2.5% (up from 2%) in 2019 will guarantee the funding for the National Disability Insurance Scheme.
• The budget has funded $65.9 million for the Medical Research Future Fund to support health research. In addition, $5.8 million will support childhood cancer research.
• $115 million has been directed to mental health, including research, rural support, psychological services and suicide prevention.
• Freeze on Medicare rebates for bulk-billed consultations has been removed. $1.2 billion will go to funding new medicines on the Pharmaceutical Benefits Scheme, making them more affordable for consumers.

Transport & infrastructure

• $1.6 billion of Federal funds towards a $2.3 billion infrastructure package for WA including the top three by proposed dollar investment;

1. Kwinana Freeway – Armadale & North Lake Roads
2. Leach Highway – upgrade to High Street
3. Access to Fiona Stanley Hospital

• $8.4 billion funding has been announced for an inland rail freight project linking Melbourne and Brisbane offering transit time of less than 24 hours, which will save an estimated 10 hours on the existing route.
• The Budget includes funding for a second airport in Sydney at Badgerys Creek, which will cost approx $5.3 billion and will likely open in 2026. Further investment of $3.6 billion for infrastructure in Western Sydney to support population growth in the region by a further $1 million by 2030.

  

Please welcome Matt Lyons to Element Finance Joondalup!

Matt has recently joined Element Finance Joondalup bringing with him 9 years of experience garnered from two large banks and a small Perth broker. More recently, Matt has built several houses and knows first hand the hurdles a home buyer or investor can experience, and he has the ability to break down this process into simple concepts that make the whole process easy to understand.

After migrating here from England with his parents back in 1993, Matt has adapted to the Australian way of life and enjoys finance, property and investment. It was during his time at The Banks he realised he enjoyed discussing property and creating relationships to deliver a product for the Client that they both understand and meets their needs.

We are really excited Matt has chosen to join us. If you or any of your friends or family would like to chat with Matt to see how he can help improve your situation, you can contact him directly on matt@elementfinance.com.au or 0401 089 524

Did you know: the City of Joondalup has one of the hottest suburbs in the state right now – Heathridge.

Currently Heathridge properties are selling faster than almost all other metro suburbs, second only to Shenton Park and Leederville. Properties in the suburb are currently on the market for 40 days before selling.

If you are thinking about buying in the area, email leandro@elementfinance.com.au first for your insiders report.

With winter setting in and no sign of our property markets slowing, the Reserve Bank of Australia (RBA) met today for its June meeting and elected to keep the official cash rate on hold at 1.75 per cent.
The official cash rate is currently at all-time lows following a rate cut last month. Forecasters are predicting that low inflation figures may prompt the RBA to drop rates again this year, with speculation that another cut may be coming as early as August.
This is great news for property owners and buyers, with interest rates falling across the board following the RBA’s announcement last month. With plenty of housing stock available on the market, auction numbers high in most capital cities during May and conditions looking good for the remainder of the year, now is a great time to talk to us about your property goals.
If you’ve had your home loan for a while or are considering making the switch to a fixed rate product, now is also a good time to talk to us. We’ll take a look at your current home loan and do all the legwork to find you a more suitable product for your circumstances and goals, so please call us today.

Strata title is a method of facilitating individual ownership of part of a property – generally an apartment, unit or townhouse. Uniquely, strata title allows for individual ownership of an actual lot or unit whilst sharing ownership of the common grounds on which it is built. The concept only came into being 50 years ago, however there are now more than 270,000 strata title properties providing more than two million homes across Australia.

Investing in a strata title property can be a smart move – it’s often an affordable way to enter the property market, and can be beneficial in managing repairs and renovations down the track. But whether you’re buying a unit or a townhouse, you should look into the history of the property and its strata scheme before you sign the contract. Here’s a few things you should know if you’re looking at buying a strata title property.

What is a strata scheme?

A strata scheme is another name for a strata title development. Basically, it’s a building or group of buildings divided into ‘lots’, which can either be individual units, apartments or townhouses. When you buy a lot, you own the individual lot as well as share the ownership of common property with people who own the other lots. Common property usually includes things such as gardens, roofs, external walls, staircases and driveways.

Strata living offers a friendly community-style environment, but it’s different from when you live in a freestanding house. There may be some activities that are more restricted, like where to park your car or how to renovate your lot. It’s very important that you’re aware of your responsibilities and obligations.

Why invest in a strata title property?

Are strata titled properties better than houses? To help you decide whether you should buy a strata title property, here are the pros and cons:

Pros

• The cost of the property compared to the land is cheaper than buying a freestanding house.
• Maintenance of the property is taken care of via the strata levies, which are paid every three months.
• The price of strata titled properties is usually cheaper than free-standing houses, so demand for them is higher, which in turn could push up their price in the future.
• It’s easy to get finance as lending policies for strata titled properties are favourable. Depending on which suburb the property is located in, you can get an LVR (loan-to-value ratio) of up to 95%.

Cons

• Strata levies can be expensive, particularly in larger blocks with lifts, gyms and pools.
• It can be very noisy to live in a strata title apartment since you’ll have neighbours living above and below you.
• Your unit/apartment could lose significant value, particularly in large blocks, if your neighbour has to sell quickly as a result of divorce or other financial difficulty.

The owner’s corporation

The owner’s corporation is one of the major differences between buying a house and a strata title property. The lot or unit owners in the strata scheme make up the owner’s corporation. However, the owner’s corporation also has an executive committee that makes certain decisions on its behalf, including the day-to-day management of the property. Large strata schemes can also appoint a professional strata management firm for the purpose of assisting and overseeing the functions of the owner’s corporation.

It is a good idea to have your solicitor look at any strata title contract before you sign on the dotted line, as they can be somewhat more complicated than purchasing a freestanding house. If you need a referral, or would like to get pre-approval on your financing before proceeding with your purchase, then give us a call. We’ll be happy to help.

This article originally published here.

The State Government has again pledged its commitment to the exciting and visionary Ocean Reef Marina project, agreeing to sign a new joint Memorandum of Understanding with the City of Joondalup.

Joondalup Mayor Troy Pickard was told of the news on Friday (20 May) during a visit to the marina site with local members Ocean Reef MLA Albert Jacob and Joondalup MLA Jan Norberger.

The MOU announcement coincided with news that the State Government has also allocated $500,000 to the project as part of its 2016-17 Budget.

The MOU is a formal agreement that acknowledges a strategic alliance and the shared commitment of the City and the State Government as joint landowners of the site in bringing the Ocean Reef Marina project to fruition.

Joondalup Mayor Troy Pickard said the MOU was a vital step in a long process as the City could not deliver a project of this size and complexity on its own.

“This document will set out the roles of the City and the State Government and how we will work together to resolve ongoing issues, recognising that a collaborative approach is needed to develop the marina,” he said.

The Mayor said the extra funding would enable the City to continue the planning phase of this complex and multi-faceted project.

The City is currently progressing the environmental and planning approvals for the Ocean Reef Marina via an amendment to the Metropolitan Region Scheme (MRS) boundary and a Public Environmental Review of the marine based components.

Mayor Pickard said the State Government’s financial contribution would enable the City to complete the outstanding tasks required for these processes, as well as finalise the Ocean Reef Marina Structure Plan.

“It will also allow the City to undertake any additional environmental work as required by the relevant agencies, respond to submissions arising from the public advertising of the PER, MRS Amendment and Structure Plan, and continue our extensive liaison with key stakeholders,” he said.

“The City has been custodian of the Ocean Reef Marina and championed this project for a considerable amount of time and committed significant resources.

“The environmental and planning approvals process currently underway is complex and challenging, with some 35 different environmental and planning studies or investigations being undertaken in recent times.

“This considerable body of work represents a financial investment of approximately $2.6 million, and whilst there is still some way to go, the funding from the State Government is timely.

“It is anticipated that the MRS Amendment, the PER and the Structure Plan will be advertised for public comment in the latter half of 2016, subject to agreement by the relevant State Government approval agencies.”

In October 2015 the City requested the State Government to take over as proponent of the project, mindful that it does not have the capacity and resources to build the Ocean Reef Marina on its own and would need the State Government or a public/private partnership to develop the facility.

“The City is preparing a structure plan in collaboration with the Department of Planning in its pursuit to obtain the necessary planning approvals that would ensure the desired urban outcomes of the Ocean Reef Marina concept plan,” Mayor Pickard said.

“Moving forward the City aims to work with the State Government to determine how the project is best progressed to construction stage.

“As land owners, the City would still like to be actively involved in the decision making process and work collaboratively with all stakeholders to produce an approved, financially viable, and publicly supported project that is delivered in accordance with community expectations.

“I can assure all of our residents and ratepayers that the City remains extremely determined to see the Ocean Reef Marina come to fruition.”

The Ocean Reef Marina project includes approximately 750 boat pens/stackers, boat ramps and boat trailer parking, hotel/short stay accommodation, residential apartments and single lots, food and beverage outlets, retail and service commercial, public open space and community amenities, an Internal beach, sea sports club and sea rescue facilities.

FAST FACTS

2016 – City receives funding from State Government in 2016-17 Budget to continue approval processes. State Government agrees to sign another Memorandum of Understanding with the City.

2015 – City calls on State Government to become the proponent of Ocean Reef Marina project.

2014 – Initiation of the Metropolitan Region Scheme boundary amendment by the Western Australian Planning Commission.

Environmental Protection Authority determined to assess the marine based components (under section 38 of the Environmental Protection Act 1986) via a Public Environmental Review.

2013 – Submission to the Western Australian Planning Commission of a request to amend the Metropolitan Region Scheme boundary.

2012- Signing of the Ocean Reef Marina Memorandum of Understanding with the State Government.

2011 – An amended concept plan was endorsed by Council as the basis for the preparation of the Local Structure Plan for the development.

2009 – Concept plan seven endorsed by Council for community consultation. Received 95.6% support from the almost 12,000 respondents who made submissions.

2007- Ocean Reef Marina Committee, Government Steering Committee and Community Reference Group established.

When it’s done right, investing in property can help you to build wealth for your future. In Australia, property is currently a very popular investment and many people are enthusiastically jumping into the market to make the most of the low interest rates currently available. But it takes careful planning for your property investment to be a success. Here are ten key factors to consider before investing in property.

1. What you want to achieve
First, determine what your end goal is – it might be financial freedom, to tie up some extra funds, or to live in the property yourself in years to come – and then make a plan that’ll help you reach that goal in a suitable timeframe. Review your plan on a regular basis to make sure you’re on track.

2. Your preferred investment strategy
If you’re looking to maximise returns, wise investors focus on buying a property below its intrinsic value in an area with a long history of strong capital growth. Also look for a property that’s unique, special or different, and one that you can renovate or redevelop in order to produce better capital growth.

3. The type of property
A good investment is a property that’ll be in continuous strong demand from both tenants and owner-occupiers. This is because tenants help pay off your mortgage, whereas owner-occupiers push up house prices. More people nowadays trade their backyards for balconies, so think about going for an apartment-style property in the inner suburbs.

4. Buying old or new
Remember, you’ll often miss out on capital growth for the first few years if you buy a new or ‘off-the-plan’ apartment. This is because you’ll have to pay a premium to the developer.

Another thing to consider in purchasing a new unit as an investment property, is that many owners in the building will most likely be investors also. It’s best to buy an apartment in a building predominated by owner-occupiers, as they typically look after the building more effectively than investors. The established apartment should also be in a character-filled block that can be cosmetically refurbished, as this can help you increase your rental income and produce some capital growth.

5. Where to buy
Location is very important when it comes to your investment’s long-term performance, so look for a property in a suburb that has always outperformed the averages or one that’s being renovated or redeveloped. You’ll usually find it in a lifestyle suburb in a major capital city near the CBD, amenities or water. Then narrow your choices further by choosing the best spots in the suburb.

6. What you can afford
You should know how much you can afford to spend and repay before you look for a property. You can do this by talking to us about getting a pre-approved loan and setting aside some funds for acquisition and holding costs, as well as a financial buffer for an emergency or a rise in interest rates.

7. Who to ask for help
In addition to us – your professional finance broker – you’ll need expert input and advice from the following people: qualified accountant, independent property strategist, smart solicitor, and if at all possible, an experienced property investor as a mentor. They can all help you ensure that your investment is a success.

8. The importance of research
Successful property investors never stop researching the market to capitalise on the best opportunities. You should familiarise yourself with all Australia’s various property markets and not just your local market, in order to find the best potential for profit.

If you’re looking to invest for the first time or expand your existing property portfolio, or to venture into investment for the first time, contact us today. We’ll help you with your finance and give you referrals to professionals who can help you with the purchasing process.

This article was originally published here and although a couple of years old, most information is still valid.

Northern Perth’s Joondalup region is adjusting to the moderating market of the city.

The northern beaches Joondalup region includes Burns Beach, Edgewater, Joondalup, Connolly, Heathridge, Kinross, Currambine, Iluka and Ocean Reef. The suburb of Joondalup itself acts as a hub to Perth’s outer northern suburbs.

The push to establish Joondalup as an urban centre extends back to 1970, with the Corridor Plan for Perth. A number of retail and transport infrastructure initiatives have been implemented around the area in the past 40 years to facilitate urban development and direct activity to Joondalup. Joondalup was highlighted in the West Australian state government’s Directions 2031 strategy as one of two primary centres in the Perth metropolitan area, along with Rockingham.

The area’s CBD has a strong retail focus and has seen considerable residential development in recent years, with a relatively high density of townhouses and apartments. With the presence of Edith Cowan University, a healthy retail and entertainment district, established parks and in close proximity to the beach and Lake Joondalup, the area has attracted demand from the middle class lifestyle market.

The greater region of Joondalup had a median house price of $588,750 in March, while units in the area sold for a median price of $415,000. A two bedroom Joondalup apartment in the block pictured below sold for $408,000 in February.

According to Australian Property Monitors senior economist Andrew Wilson, Joondalup’s appeal to middle income earners has lent the area some resilience against the changes seen in Perth’s market.

“Joondalup is in the middle price range area,” said Wilson.

“There’s a bit of a lifestyle market there. With all the new developments that have been established in that area, we’re seeing middle price bracket, executive type buyers.

“Because of that nature of the market, it tends to be quite resilient. The big picture is that Perth is moderating. The latest data shows that Perth’s market has plateaued.

“We’re seeing quite a significant upward shift in unemployment in Perth, which has moderated lately.”

According to data from the Real Estate Institute of Western Australia, listings in Joondalup and the neighbouring Wanneroo jumped earlier this year, up 28% in the March quarter from December.

Despite Joondalup’s relative strength, its property market must still deal with exposure to Perth’s labour market, said Wilson.

“The Perth labour market has seen some difficulties with absorbing eastern state migration, which saw rents get pushed up quite sharply in some suburbs of Perth. Perth prices rose 10% last year, and with rising unemployment, we’re starting to see some affordability issues.

“And the lifestyle market can certainly be affected by job security and affordability issues. But as the economy does pick up and absorb that unemployment, incomes will grow.”

The slowing mining sector in Western Australia has seen a shift in focus for the region, with the city of Joondalup launching new initiatives to market the region as Perth’s “knowledge capital”. How well the region responds to the state’s shifting economy remains to be seen, but strong infrastructure investment in the area in the past and extending into the future ensures that it will remain a significant urban centre for Perth’s northern corridor.

Photo courtesy of Wikipedia/Creative Commons.

It’s generally a good idea to protect and improve the sale value of your property, even if you’re not intending on selling in the immediate future. Continuing to invest in and develop the property so that it remains modern and well-maintained will help to grow its value consistently over time. There are, of course, plenty of different ways to enhance its value, but at the minimum, there are a handful of key strategies that are proven to be effective.

1) Develop the facade
The first thing that visitors see of a home is its front facade, and a great deal of value can be added to the property simply by making sure that those first impressions are positive. Consider the look of the building itself, the landscaping and the overall condition of the property. For example, make sure the roof is in good repair and looks great – filthy tiles or rusting metal is simply not a good look!

2) Keep the flooring modern
Fashions in flooring change frequently, for example carpeted or even lino floors were in fashion not long ago, but these days polished floors or stone is a much more attractive look. You don’t need to tear the floors up every time the fashion changes, but consider making a refresh to the flooring a high priority.

3) Make sure everything matches inside
Even if the house is not being sold with the furniture, the furniture that fills a space makes a statement and can help to inspire the creative thoughts in a prospective buyer. Mismatching furniture within a room can make it look busy, small, and unattractive to the eye. Consistency and style will create an open, calm atmosphere, which will inspire far more confidence in a buyer.

4) Raise the roof
The desire to have space is a timeless one, and the height of the ceiling can actually have a big impact on the perception of space in a room. If your property has low ceilings and it’s possible to lift them, do so in order to maintain that open, airy atmosphere that is so in vogue at the moment.

5) Focus in on the kitchen
It’s very likely that a prospective buyer now is a fan of shows like My Kitchen Rules and MasterChef! That means they are going to want a sizable and well-resourced kitchen to host their dinner parties. What are people looking for in their kitchens? Energy-efficient appliances (taps, ovens, fridges), plenty of storage space and cabinets, and plenty of countertop space.

6) Is there the ability to add more rooms?
Properties escalate in price rapidly as more rooms – especially bedrooms – are added onto the building. So, if there is the ability to renovate and add a bedroom or two, an extra bathroom, or additional living space, be sure to consider it. Renovations might have an upfront cost, but the return from that investment generally justifies it come sale time.

7) Sustainability is so hot right now
Increasingly, people want to live sustainably, and are willing to pay a premium in order to be able to do so. In addition, savvy home buyers are realising that the more sustainable a building, the cheaper it’s going to be for them in the longer term.

Ideas to consider include: solar panels, water tanks, thermal warming systems, and great insulation is a must.

Most of these investments can be made over the medium and long term, which is why it’s worth considering well before you’ve even started to think about selling your home. That way, when you do decide to sell, you’re not going to miss any opportunities by simply running out of time to “do up” the place.

If you need assistance financing your property renovations, remember we’re here to help. There are a variety of different ways to organise finance for your projects and we can help you to access the right option for your needs, so give us a call today.

If you are considering buying an investment property in the Joondalup area, research should be very important to you. We have a lot of home loan and property tools available for our clients looking for their next property purchase. Some of these tools are not available to the general public. Just one small way mortgage brokers beat bank branches for investors 100% of the time.

There is still also some great data readily available to everyone via REIWA and the property websites, like the link below. Keep in touch with Element Finance Joondalup via our Facebook page where we will release some of our private tools soon.

http://www.realestate.com.au/invest/house-in-joondalup,+wa+6027

After a long wait the residents of Girrawheen, Koondoola and Wanneroo have finally had their rezoning formally approved and can now start submissions for subdivision STCA (Subject to Council Approval). Quinns Rocks, Yanchep & Two Rocks are currently still in the consultation stage.

You can find more information on the City of Wanneroo website or by calling your Element Finance Joondalup home loan expert.

http://www.wanneroo.wa.gov.au/info/20017/planning_and_building/50/residential_recoding

The autumn property market is proving to be very busy and full of opportunities for home buyers and investors. We expect lower interest rates will stimulate the market even further, so talk to us about getting your finance in place now!

The Reserve Bank of Australia (RBA) met for its May meeting last week and decided to cut the official cash rate by 25 basis points, bringing it to just 1.75%. The move took many forecasters by surprise and brings the official cash rate to an all-time low!

The RBA decided to make the move in response to low inflation figures and a strengthening Aussie dollar. Forecasters do not anticipate another cut in the immediate future, however the RBA is likely to reserve this option in case it feels the economy requires further stimulation moving forward.

This is great news for property owners and buyers across the country. Property markets have been performing well, with plenty of housing stock available to buyers. Auction numbers have been quite high across all states, however clearance rates are not as high as last year for most markets, except for Sydney and Melbourne where they reached 74% for the last weekend in April.

Growth in home values has been good across all cities during April, except for Hobart where home values declined by 5.33%. Sydney home values increased by 2.40%, Melbourne 1.07%, Brisbane/Gold Coast 1.81%, Adelaide 2.03%, Perth 0.47%, Darwin 2.53% and Canberra 1.21%.

Following the RBA cash rate cut last week, lenders have already started to reduce interest rates, particularly on variable interest rate products for owner-occupier purposes. However, we are also seeing rate cuts across other loan product classes, so if you are looking to refinance, fix your interest rate or invest, talk to us and we’ll shop around to find the most competitive rate for your needs.

If you already have a home loan, please remember that when rates are on the move, it’s wise to check with your mortgage broker to ensure you’re still getting the best deal available for your needs. We don’t charge for a home loan health check, so please give us a call today!

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au

Sincerely , Element Finance

One of the most exciting sporting events ever seen in Perth is returning and we have your tickets! International Ice Hockey Australian Tour are bringing their heart stopping, adrenaline pumping action to our Perth Arena this June and Element Finance have two GOLD STANDARD tickets worth almost $350 to giveaway.
For your chance to get close to the Ice, enter our competition in 2 simple steps:
1. LIKE the Element Finance Facebook page
2. Visit the Element Finance page and comment on this image with the name of the friend you would like to have cheering next to you at the match on 18 June.
But hurry, competition closes on 24 May. Winner announced 26 May. Don’t forget to get your mate to enter you in the competition too! For full T&Cs, please email mike@elementfinance.com.au

People tend to live at home with Mum and Dad for much longer these days. But getting out of home into your own place can be a bit of a challenge – both for yourself and your budget. Here’s a few things you need to know before you can make your big move!

Step 1. Make a realistic budget

When you step out on your own for the first time, you’ll be shocked by how much everything costs – from the price of avocados, to the monthly gas bills. Your parents will be very experienced in this area, so get them to help you make a realistic list of all the expenses you’ll have when you’re living on your own, and work out a budget for how you’ll manage your finances to cover them.

Your list should include a weekly or monthly amount for rent, utility bills like gas, electricity, phone and internet, food, clothes, travel expenses to and from work, dental visits, health insurance and ambulance services – in fact, everything that you’ll have to cover off financially to live by yourself.

Step 2. Save up for the move

Before you move out, it is wise to get into the habit of living on a budget and saving as much as you can. You’ll also need to have plenty of funds in the bank when you make your move as there are quite a few costs involved with getting into a place of your own.

First, you’ll need a month’s rent as a bond deposit and a month’s rent in advance on your place. Next you may need money for your utilities – utility companies often require a deposit when setting up an account for the first time. Then there’s the cost of furniture, kitchenware, and the things you’ll need to set up house – like a cupboard full of food!

Last but not least is the actual cost of moving. You can save money by moving yourself, but bear in mind that if you have to use a removal company, it can be quite expensive and you’ll want to compare quotes from companies to get a good price.

Step 3. Find the right place

You may be dreaming of a slick city apartment, but in reality most people can only afford modest accommodations for their first home. It does pay to be very careful about the kind of place you rent – older homes and apartments can be costly to run in terms of heating, cooling and electricity. You can ask the utility companies for advice on this score – they may actually be able to provide you with information on the average costs of running the house you’re looking at.

You’ll also want to consider whether you want to live on your own or in share accommodation. Sharing is great fun if you shack up with friends or like-minded people your own age, but it can be a nightmare if you find yourself living with strangers who don’t understand your housekeeping habits!

You can look for share accommodation, apartments, units and houses online on most real estate search sites. Remember to stick to your budget – renting a place you really can’t afford is a sure way to cause yourself financial hardship and end up back at Mum and Dad’s place in short order.

Consider staying put until you’re ready to buy

This is the part where we recommend you stay with Mum and Dad until you save up enough money to get a mortgage and buy a place of your own. Saving money when you have to pay rent and cover all of your own living expenses can be very difficult. And paying rent is simply paying off someone else’s investment property when you could be spending that money on buying a place of your own.

If you need advice about whether to rent now or stay put and buy later, then don’t hesitate to give us a call. A place that’s really your own may be closer than you think. Would it really be that hard to stay with Mum and Dad for a little while longer?

We here at Element Finance are super excited to introduce to you the most recent Mortgage Broking expert to join our team, Leandro de Jesus.

If ever there was someone that made discussing finance and home loans truly an enjoyable experience, that someone is Leandro. His genuine enthusiasm to help each and every one of his clients succeed with their property goals is clear in every instance.

Himself an active property investor, Leandro understands what it can take when it comes to starting or growing your investment portfolio. His first hand experience in the WA property market continues to prove invaluable for his clients. 

Focus: Leandro is the guy you want on your side for all things property investment. Living in the City of Joondalup, he has an intimate knowledge of the surrounding suburbs. If its discussing home loan structure, negotiating a personalised deal with your lender or connecting you with other property professionals, he has you covered.

If you’re self-employed or a small business owner, growing your business can be a challenge. You may find your expansion plans are frustrated by irregular cash-flow, insufficient or out-dated equipment, or business premises that are just too small. Sometimes you may even find yourself missing out on opportunities because you simply don’t have the money to hire the additional staff you need.

That’s where credit advice from a professional mortgage and finance broker can make a huge difference to your success. Clever financing options can really open up opportunities for small business owners and the self-employed. Here are just a few alternative financing options that you could use creatively to help your business grow.

Cash-Flow Financing

Did you know that over 400,000 small to medium sized businesses use cash-flow financing every year? This is a common form of small business loan that is backed by your company’s expected cash flow, instead of using collateral that is based on your company’s assets.

If your company is going strong and you need an injection of cash to fund growth or capitalise on your opportunities, cash-flow financing may be able to give you access to up to $250,000 based on your business performance alone. You can use the money for any worthwhile purpose – financing for tax purposes, purchasing inventory, managing cash flow, bridging receivables gaps, staffing on new contracts – whatever your business needs.

Equipment Finance/Leasing

If you want to be competitive in your business, the right equipment at the right time can be vital to your success. Outdated equipment can really limit your business activities and can cause you to miss out on new opportunities or larger projects.

There are several different ways you can go about financing the all-important equipment your business requires. For example, an equipment loan – also known as a chattel mortgage – can give you access to finance for just about any kind of equipment from a small truck for your plumbing business to major earthmoving equipment, or even cookers and fryers for your new restaurant.

Alternatively, you may want to consider a Finance Lease to obtain the equipment you need. Leases and Hire Purchase agreements often carry additional tax benefits* for small businesses and the self-employed, such as input tax credits for rental and other charges that are subject to GST.

Commercial Property Loans

Unless your business is totally online or home-based, the right business premises can also be vitally important to your success. For example, being able to afford premises in the right location can really boost the success of a restaurant or retail outlet. With some types of businesses leasing may always be the better option, but actually purchasing premises can provide your business with a valuable asset and significantly increase its resale value if you ever want to sell it as a going concern.

If you want to purchase premises for your business, we can access a wide variety of suitable loans from lenders who are willing to provide mortgages for commercial property. Like most residential home loans or even property investment loans, it will be necessary to assess the financial situation and circumstances of you and your business to determine how much you can borrow.

If you require more information about financing options for your business, give us a call and we’ll point you in the right direction. We’ve only mentioned a few of the financing options available and we can help you find out more so you can choose one that’s right for you. Call us today.

*This article does not constitute taxation advice and you should consult a qualified tax professional to see what tax benefits you can access in your particular business with regard to financing. Your personal and business financial circumstances will need to be reviewed prior to the acceptance of any finance product or offer. Lender terms, conditions and fees may also apply.

When it comes to financing your investment property, there are several different options that you can use. Choosing the right one will depend on your investment structure and strategy, but there’s no need to spend days or even weeks researching the options. Here are the most popular loan types used by property investors in Australia today.

Variable Rate Loans

With an investment loan, interest is generally tax deductible*, so even though it may be subject to interest rate rises, choosing a Variable Rate Loan for your investment property may be a good option, as it will give you flexibility and the ability to maximise your property’s profitability.For example, Variable Rate Loans frequently come with features like the ability to make extra repayments, and redraw facilities. This could help you grow the equity in your property more quickly, which you could redraw at a later date to do renovations and improve the value of your investment, or to use as a deposit to invest in another property.

Fixed Rate Loans

If you are investing on a tight budget, a Fixed Interest Rate Loan may be the better option for you. You will know in advance exactly what your outgoing finance costs will be and these will remain the same throughout the fixed interest period of your loan. This might be particularly useful for you if you are ‘negative gearing’ your investment. Whilst the interest on the loan may be tax deductible, the rental income may not initially cover all your costs and fixing the finance costs will ensure you can budget to meet your ongoing financial obligations.

Split Fixed/Variable

Using a combination of a split Fixed and Variable Rate Loan could give you the best of both worlds. You can limit increases in your outgoing expenses whilst still retaining the ability to make extra repayments and redraw them when needed. This could be a big help with saving for ongoing costs like renovations and maintenance.

Interest Only Loans

Many property investors favour Interest Only Loans as they allow you to minimise mortgage repayments and outgoing costs in the short term. They require you to pay just the interest on the loan – which is usually tax deductible, and this can cost significantly less compared to repayments on a principal and interest loan. This could be a good idea if you are investing on a tight budget and require the rental income from the property to cover all of your finance costs.

However, with an Interest Only Loan the loan repayments will not pay down the principal of the loan and increase your equity. Instead, you will be relying on rental income and the value of the property increasing over time to make a profit. If the value of the property you choose goes down, or it does not increase very much during the period of time you own it, you could find yourself making a loss on your investment.

Remember that we’re here to help you find the right loan to meet your personal financial circumstances and investment goals. No matter what kind of investment strategy you are planning on using, we can help you to structure your loans and choose the right loan products to maximise your opportunities. Why not give us a call for a chat today?

*This article does not constitute taxation advice and you should consult a qualified tax professional to see what tax benefits you can access in your particular case with regard to financing. Your personal and business financial circumstances will need to be reviewed prior to the acceptance of any finance product or offer. Lender terms, conditions and fees may also apply.

The autumn property season is in full swing, get pre-approval on your loan now so you can move fast and secure the property you want. With clearance rates down, you may even get a bargain!

Despite a rising Aussie dollar, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 2.0% during its April meeting last week and it looks as though rates will remain on hold for the foreseeable future.

Most markets around the country have been seeing steady auction activity over the past month, however both auction numbers and clearance rates are down compared to this time last year, with Melbourne and Sydney scheduling half the number of auctions compared to the end of March 2015.

Home values only showed slight movements last month, however for the first quarter of this year Hobart proved to be the best performing capital city with home value growth of 6.5%. Most other cities showed home value growth of around 2% for the quarter. Brisbane and Perth were the only cities showing a decline, with Brisbane home values falling 0.1% and Perth 0.9%. Perth’s property market is particularly slow, providing some great opportunities for home buyers and investors.

Market conditions seem to be swinging back in favour of property buyers in 2016, so now is a good time to talk to us about your property purchasing plans. We’ll help you to get pre-approval on your loan so you’re in a great position to buy, whether you’re a first home buyer, next home buyer or property investor. There are also some excellent deals around if you’re looking to refinance, so please give us a call.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. . Information sources: Auction results:www.realestate.com.au. Home values: www.corelogic.com.au
Sincerely , Element Finance

Did you know that we also offer cost-effective insurance options in addition to finance? We consider it part of our responsibility to you to do whatever we can to ensure you and your family never suffer any financial hardship, or experience any difficulty in meeting your financial obligations. We genuinely care about the welfare of you and your family and are here to support you with insurance options that will meet your specific needs and keep you covered in any eventuality.

Why do you need life insurance?

Australians seem to live in the belief that we are all bullet-proof, but the truth is we are just as vulnerable to events beyond our control as the next person. Take Karen for example.

Karen was a 38-year old office manager working for a manufacturing company. After her divorce, she was left with a mortgage and a 14 year old son to support. Karen was very worried about what would happen to her son if she should pass away unexpectedly, he always worked hard and did well at school and she wanted to make sure he would be able to go on to university.

Karen took out a life insurance policy for $500,000 – enough to cover her mortgage and support her son if necessary. She also took out an income protection policy in case she ever became temporarily unable to work.

Less than two years later, Karen went home from work early one afternoon with a bad headache and the feeling she was coming down with the flu. Unfortunately, it was worse than that. Karen lost consciousness later that day and was rushed to hospital. She had suffered a brain haemorrhage and died that evening.

Under her life insurance policy, Karen nominated her son as her sole beneficiary. He received the $500,000 benefit through a trust fund set up by the trust’s solicitors. Whilst the money may not make up for the loss of his mother, Karen’s son will be able to live securely and complete his university studies without financial hardship*.

Is your current insurance enough?

Most people have some form of insurance in their super – but is it enough? The good thing about a life insurance policy is that it pays out a lump sum in the event of your death that your beneficiaries can use as they see fit. Other forms of insurance cover for specific events such as loss of employment, illness or permanent disability can also be arranged to cover your obligations.

Karen’s example tells us that planning your insurance requirements carefully can make all the difference, not only to you but to the life and future of your loved ones. If you’d like to find out more or get some advice on which insurance options would be suitable for you and your particular situation, then please give us a call. We’re happy to discuss your requirements without any obligation and when you’ve made your decision, help you to find the most cost-effective insurance solution for you.

*This example is based on a real insurance claim, however names have been changed. Grounds for making a claim and the level of benefit can vary from one insurance policy to another depending on the terms of the policy. We can help you arrange insurance that is right for your needs. The information contained in this article is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should seek the appropriate financial advice and read the relevant Product Disclosure Statement or other offer document prior to acquiring any financial product.

Many people don’t think twice about paying interest on everything they purchase. For a lot of people, it’s just the price they have to pay for convenience and getting the things they want in life. And when you’re borrowing money to make money, as with your home loan, your interest repayments may be considered a necessary evil if you want to get ahead.

But does paying interest always make sense? If you’re not very careful, the interest you pay can end up costing you more than you can afford. Here’s three simple ways to help you keep your interest liabilities under control.

1. Don’t use a credit card

Many people think they just couldn’t live without their credit card. But in terms of interest payments, this is the most expensive form of debt there is. If you really think about it, if your credit card interest is 20% per annum, you’re paying 20% more for everything you buy if you take a year to pay it off. Do you really want to be doing that?

We recommend that wherever possible, you make your everyday purchases using cash and only use your credit card in the event of an emergency. This may mean saving up for larger purchases rather than buying them immediately with your credit card. When you do have to make a purchase with your credit card, you should try to pay it off as soon as you can – within the interest free period if at all possible. Some credit cards offer 55 days interest free on purchases, so choose one of these if you can.

2. Pay less interest on your home loan

There are several ways to reduce the amount of interest you pay on your home loan. You can make repayments more often – say weekly or fortnightly instead of monthly, you can use a mortgage offset account, or you can make extra repayments on your home loan to reduce the interest payable. All these measures together can accumulate to cut years off your home loan and save you tens of thousands of dollars on interest over the life of your loan.

Another way to reduce the interest you pay on your home loan is to keep it up to date – so you don’t pay the lender more interest than is strictly necessary. We recommend that you contact us for a free home loan health check every year, or at least every two years. That way you can always make sure your home loan has the lowest interest rate available to you.

3. Consolidate your debts

You see advertisements for debt consolidation on TV all the time – they are usually aimed at people who are in trouble with debt. However, there’s no need to wait until you’re in trouble to consolidate your debts, you can do it now to reduce the amount of interest you have to pay.

Consolidating your debts means rolling all your debts into one, usually using a loan that has a lower interest rate. If you have a home loan, for example, you could refinance in order to use some of the equity in your home to pay off all your other debts and access the lowest interest rate available.

If you don’t have a home loan and have quite a few expensive debts like credit cards, car loans, or store credit, it may be possible to roll these into a personal loan that carries a lower interest rate overall. It also allows you to spread your repayments over time, making them more affordable. If you want to eventually end up debt free, consolidating your debts is a good place to start.

As your finance and mortgage broker, we’re not just here to help you find the right solution for your home loan. We can help you with all your financing needs including budgeting, debt management and debt consolidation. We consider it a vital part of our service to save you money on interest – so you can use your money to enjoy a better lifestyle or invest it to build wealth for your future.

For assistance or more information about reducing your interest obligations, please give us a call*. We’ll be happy to help.

*Your full financial situation will need to be reviewed prior to acceptance of any offer or product.

Have you given any thought to what will happen to your assets when you pass away? Recent statistics have shown that approximately 45%* of us do not have a valid will. Most people don’t know that if you die without one, the government in the state in which you live will determine how your estate is divided up.

Dying ‘intestate’ – the legal term for dying without a valid will – could mean that you don’t get to choose which people inherit your estate, particularly if they are not directly related to you. But most importantly, it could mean that large assets like your home and other property do not go to the people you want to take care of the most after you’ve gone.

What is a valid will?

A will is a legal document that clearly sets out your wishes for the distribution of your assets after your death. In order for it to be valid, your will needs to comply with certain legal criteria. For example, you must be over the age of 18 and of sound mind to make a will, it must be in writing, it must be signed by you and witnessed by two people who are not beneficiaries of the will and you must have ‘testamentary capacity’.

Testamentary capacity means that you must be fully aware of the extent of your debts and assets and the will must take into consideration all the people who would normally be expected to benefit from your estate. Because of these requirements, it is advisable to seek legal advice when preparing your will, as you may require professional guidance on everything that must be included.

For your will to remain valid, it needs to be kept fully up to date with your current circumstances, so you should update your will every five years and every time your family or financial situation changes. For example, your family situation may change if you get divorced, remarry or your children get married, or if you have a new grandchild. Your financial situation may change if you become unemployed or retire, purchase a new property, change your investments, incur additional debts or the value of your estate increases or decreases for any reason.

What happens to your home loan if you die?

Unfortunately, your debts do not disappear when you pass away. The person who inherits your property will also inherit your mortgage repayments. What’s more, in the event of your death, the lender has the right to demand repayment of the loan in full from this beneficiary, which may mean the property will have to be sold off quickly to repay the debt.

In order to ensure that your beneficiaries are not left struggling to pay off your home loan or other debts, we recommend that you consider Life Insurance or perhaps, Mortgage Protection Insurance. (We can provide you with cost-effective insurance options, so talk to us if you need help).

How do you prepare your will?

You can prepare your own will by obtaining a legal will kit from any Australia Post Office. However unless your family and financial situation is very straight forward, we recommend that you seek professional legal advice to ensure your will is legally sound and cannot be contested in court. (If your will is not legally sound, the court can overturn it and divide your assets as they see fit).

If you do not currently have a valid will, we can help by giving you a referral to a reliable legal adviser. As mentioned earlier, we can also help you to arrange suitable insurance options so that your loved ones are not left struggling to repay your home loan or other debts after you go. We’re here to help you make the future secure, both for yourself and your loved ones, so please don’t hesitate to give us a call today if you require assistance.

*Source: http://www.tag.nsw.gov.au/wills-faqs.html

Saving up your deposit is the first step in buying a home and when your bank account balance starts to look good it’s easy to get excited. But it pays to be realistic. Exactly how much money is enough? In this article we take a look at some of the upfront costs involved with buying a home to help you set a proper savings goal before you make your move.

The deposit you contribute towards your mortgage is only part of the funds you need to purchase a property. Many first-time buyers assume that 10% of the purchase price will be enough to cover everything, but unfortunately that isn’t necessarily the case. There are many costs involved in purchasing a property, let’s take a look at other things you need to think about as part of your purchase.

1. Deposit on your mortgage

It used to be possible to borrow nearly 100% of the purchase price of the property, and use your savings to cover the other expenses, but these days that’s usually no longer the case. Most lenders require you to have at least 5% of the purchase price to put towards your mortgage. Depending on the home you want to purchase, the lender may even require you to put 10 – 20% of the purchase price towards your mortgage. Have a chat to us about different lender’s criteria to ensure you know what you can afford.

2. Stamp duty

Stamp duty is a cost that varies from state to state and it is calculated against the price of the property you wish to buy. We can help you calculate approximately what your stamp duty costs will be on the price range of home you’re looking at, so talk to us when you’re planning your budget.

3. Lenders mortgage insurance

Unless you have a deposit of 20% or more to contribute towards your mortgage, the lender who is providing your loan will require you to pay lender’s mortgage insurance (LMI). Unfortunately, the cost of this will also vary. LMI is calculated according to how much deposit you have, how much you intend to borrow and how much the home costs to purchase.

4. Borrowing costs

There are a range of different fees that apply to getting a mortgage. These differ from lender to lender and loan to loan, but generally speaking, you will need to allow for things such as application fees, lender valuation fees and a settlement fee. Some lenders also charge for legal supervision at settlement and document processing. Again, ask us what these costs could be with your chosen lender, and we’ll help you to fit them into your budget.

5. Pest and building inspections

Getting a building and pest inspection usually costs around $400, but this will vary depending on the size of the property. It really is worth the expense because it could cost you a lot of money to fix any problems the property may have after you purchase it. By getting a building and pest inspection before you buy, you’ll know exactly what you’re up against and have the opportunity to choose a different property if it looks like you can’t afford the repairs.

6. Conveyancing

You will need to employ a solicitor or conveyancer to legally transfer ownership of the property you are buying. They will also perform all the property and title searches necessary and take care of the documentation. Conveyancers can also explain sales contracts, take a look at your section 32, auction terms and any other legal elements of purchasing a property so that you fully understand what you’re getting into.

7. Insurance

Your lender may require you to take out building insurance on any property you wish to purchase. This is not only an upfront cost, it is ongoing and you’ll need to maintain this cost annually. You have the freedom to shop around amongst the various insurance carriers to get yourself a good price. Once you move in, it is also a good idea to get contents insurance as well. Usually the two can be bundled together so you can save on purchasing them individually.

8. Moving-in costs

Many people get so excited about getting their first home they forget to calculate their moving in costs and include them in their budget. Remember that you may need to hire the services of a removalist to move in your stuff, and that can be expensive! There’s also likely to be items of furniture you’ll need to buy and most people want curtains and blinds at the windows.

You’ll also need to pay to have your utilities connected. These may include telephone, internet, gas and electricity.

9. Contingency funds

Last but not least, it’s important that you have some funds put aside for any unexpected expenses. Of course, it’s difficult for us to predict what these may be, but you never know when you might encounter a problem. Perhaps you’ll have a blocked drain that requires a plumber, or light sockets that don’t work and require an electrician. It’s all part of the fun of owning a home!

Although this may sound daunting, remember, we’re here to help you budget to purchase your property and help to make sure there are no hidden surprises. If you’re getting ready to purchase a home, please don’t hesitate to give us a call for a chat. We’ll help you determine whether you’ve saved enough money to cover your deposit and all your expenses. We can also help you get pre-approval for your home loan so you can get started on searching for your dream home! Please call us today.

Summer is over and now that we’re entering the busy autumn selling season, our property markets are picking up and resuming the hectic pace we saw last year!

Last week, the Reserve Bank of Australia (RBA) met for its March meeting and as widely expected by analysts, decided to keep the official cash rate on hold at 2.0%. Whilst the RBA is not ruling out a further cut in rates this year, it looks as though the cash rate will remain at this level for some time.

Property markets are going strong, with auction clearance rates picking up around the country. For the week ending February 29, there were 1,327 auctions recorded in Victoria with a good clearance rate of 75%. In NSW, there were 872 auctions with a clearance rate of 73%, Queensland 175 auctions with a clearance rate of 58%, South Australia saw 118 auctions with a clearance rate of 73%, ACT had 72 auctions with a clearance rate of 70%, Tasmania had just 9 auctions with a clearance rate of 60%, NT had 10 auctions with a clearance rate of 63% and Western Australia held 47 auctions with a clearance rate of 44%.

Whilst last year saw some very rapid rises in home values, this month growth has been slower. Sydney home values increased by just 0.47%, Melbourne 0.30%, Brisbane & Gold Coast 1.30%, Adelaide 1.88% Darwin 0.40% and Hobart 2.85%. Perth and Canberra showed small declines in home values over the last month, with Perth showing a 1.13% decrease and Canberra 0.16%.

Many lenders have been making changes to their interest rates outside of the RBA cash rate movements. Recently we’ve seen small increases in interest rates on commercial property loans and investment property loans. However, interest rates remain very low overall and buying conditions look particularly good for owner-occupiers – great news if you’re a first home buyer or looking for your next home.

Remember, we’re here to support you with all your finance needs. If you’re thinking about getting into the market this autumn, then give us a call and we’ll help you to get pre-approval on a loan so you’re in a great position to buy. If you’re an investor, don’t be put off by any small rises in rates – we’re here to help you find the most suitable loan for your needs, so call us today.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au

Sincerely , Element Finance

Are you in the market for a new car? If you are, you’ve probably been shopping for the make and model you want already! But what about your car financing? There are quite a few car finance options available that most people don’t know about. Talking to us could help you find a new way to finance your car purchase that saves you money. One thing is for sure, you don’t want to jump straight in with the finance a car dealership offers without checking out your other options first! This article tells you more about the car finance options we can provide. Why you should check out all your options first When you buy a home, your home loan is considered a ‘good’ form of debt because you are purchasing an asset that is most likely appreciating and making you wealthier. But when you purchase a car, you are purchasing an asset that is depreciating and this is considered ‘bad’ because it is costing you money – so it is really important to minimise your borrowing and the amount of interest you have pay. Here’s some car financing options that could help you to do just that! Option 1 – get a car loan A car loan is a straight forward option that’s great for most people. With a car loan, the funds are secured against the car and you can usually pay it down at about the same rate that the car depreciates at. You can get flexible contract terms ranging from two to seven years, and a choice of fixed or variable interest rates. You may also get to trade-in your old car or use a deposit, which can considerably reduce your monthly repayment amount. Because the loan is secured against the car itself, you can usually get a lower interest rate compared to other borrowing options like a personal loan for example. We don’t usually recommend a personal loan to buy a car, because next to credit cards, they carry the highest interest rates of any type of loan available in Australia because they are unsecured debt. Option 2 – take out a lease A lease differs to a car loan in that the lender retains actual ownership of the car. They purchase the car on your behalf and you lease it back from them, paying a fixed monthly rental for the term of the lease. At the end of the lease, you can pay a ‘residual value’ final payment and take ownership of the car, trade it in, or if the residual is larger than a payment, refinance the residual and continue leasing. The benefit of this method of buying a car is that you can reduce the size of your payments by increasing the residual amount you have to pay at the end. Plus, you know what your payments will be in advance. Leasing may also allow you to get a better car than you may otherwise be able to afford. Additionally, the GST that is usually contained in the car’s purchase price is claimed back by the lender, which reduces the purchase price for you, and could further reduce your payments. A lease also has some tax benefits if you are self-employed or a business owner, particularly if you usually use the car for business purposes. You can even make advance lease payments for tax deduction or cash-flow purposes. (Check with your accountant to ensure this applies to you). If you are a salaried employee of a company, you can also enjoy some tax relief by using a novated lease. In this kind of lease, your employer pays the lease payments from your pre-tax income. You can take the vehicle and lease with you if you switch employers and you always retain the equity you build up in the vehicle, not the employer. (Again, you should check with your accountant to ensure a novated lease will give you a tax benefit.) Option 3 – use the equity in your home If you own your home, you could consider refinancing your home loan to use some of your equity to pay cash for a car. Having cash in your hand when you go out to purchase a car could help you to negotiate a better price, which could save a great deal of money. You may think that using the equity in your home to buy a car is a good idea if your home has substantially increased in value since you purchased it. However, you need to be aware that if you take some equity out of your home loan, your home loan repayments will increase. Whilst this is unlikely to increase the cost of your home loan repayments more than covering the monthly repayments on a car loan in addition to your home loan, you need to consider that you will be paying the home loan for an extended period of time. It could be as much as 30 years, which may end up costing you a lot more in interest and repayments than a regular car loan over five years, for example. Option 4 – a chattel mortgage Many people have never heard of a chattel mortgage and that’s probably because it’s usually used by businesses. If you have a company, business partnership or are a sole trader, you can use a chattel mortgage to buy a vehicle provided it is primarily used for business purposes. A chattel mortgage is great if you use the cash method of accounting in your business, as it allows you to claim the GST in the vehicle’s price up-front. That means you can claim some or all of the GST charged in the purchase price of the car as soon as you lodge your next BAS, rather than over the term of the loan. You may also be able to claim the interest charges on your chattel mortgage as a tax deduction and also depreciation on the car. (Of course, you’ll need to check with your accountant first.) With a chattel mortgage, the lender advances funds to purchase a car and you take ownership. Then the lender takes out a ‘mortgage’ using the car as security for the loan. This mortgage is registered with ASIC and once the contract is completed, it is removed giving you ownership of the car. You can finance the chattel mortgage over two to five years, arrange for a residual value to reduce the cost of your payments, and use a trade-in or cash as a deposit to further reduce your payments. If you’re planning on buying a car, it pays to talk with us about which option will be most beneficial to you. Car dealerships can only provide one kind of finance and they don’t have an obligation to take your personal financial circumstances into consideration and recommend what’s right for you. If you’ve been shopping for a new car of late, just give us a call. We’ll be happy to talk you through all of the car financing options available for you.

 

Are you thinking about investing in property this year? One of the reasons why investing in property helps you to build wealth is that it offers you various tax deductions. But many first time investors are unaware of all the tax deductions that may be available. One of the tax deductions you can claim on your investment property that is frequently overlooked, particularly by first time investors, is depreciation. For this you need to organise a depreciation schedule when you purchase the property, so you can start claiming the tax break as soon as possible. In this article we explain what a depreciation schedule is and how to obtain one. What is depreciation? Depreciation occurs as an item’s worth becomes less over time as it is used and it wears out. When you’re talking about a tax deduction, depreciation is a method of allocating the cost of an item over its useful life. For example, if your property has an oven that is valued at $1,000 and has a ten year life, you can claim $100 against your taxable income for 10 years on that individual item. With an investment property, you are only allowed to claim depreciation on certain items against your taxable income. There are two types of depreciation tax deductions that you can claim: Depreciation on plant & equipment: this refers to items within the building like ovens, hot water heaters, air conditioners, carpets, blinds and so on. Depreciation on buildings or ‘building allowance’: this refers to the construction costs of the building itself, such as concrete and brickwork. What is a depreciation schedule? In order to make a tax claim for depreciation, you need a report that identifies all the things that may be claimed against your tax and the current value of each item. The report must separate all the different items into the two categories mentioned above, and each item depreciates at a different rate. Each property will be different from the next and will contain a wide variety of different items that fall into these categories. The amount of tax benefit you receive will depend entirely on the property you purchase. Many experienced property investors will deliberately choose properties that will give them the most depreciation benefits. When should I get a depreciation schedule? You should create a depreciation schedule as soon as possible after settlement, preferably before tenants move in. This will allow you to maximise your tax benefits and will help you to avoid causing disruption to your tenants. If you didn’t get a depreciation schedule when you first purchased your investment property, you can still get one now and start claiming your deductions moving forward. How do I create a depreciation schedule? When you purchase a property, all the assets within the property are not itemised by value. What’s more, the government will not take your word for the value of the items. That means you can’t create a depreciation schedule yourself. In order to claim any tax deductions, you will need to employ a qualified Quantity Surveyor to do a thorough inspection to identify what can be claimed and to make valuations in order to create a depreciation schedule for you. This is the only way you can legitimately claim tax deductions for depreciation. If you purchase a brand new property, preparing a depreciation schedule is much easier as the value of the items can be easily determined. If you have an older property though, things become more complicated and that’s another reason why it is important to use a reliable professional. A Quantity Surveyor will prepare your depreciation schedule report with a view to maximising your financial position in relation to your property assets. And their fees are fully tax deductible. If you need help locating a professional Quantity Surveyor, then please give us a call and ask us for a referral. This article looked at just one way you could benefit financially from purchasing an investment property, but there are many reasons you may want to invest! If you’re thinking about getting into the investment property market this year, then give us a call. We’re here to help you get your financing in place, but we can also help you put together the team of professionals you need to invest profitably. Now is a good time to get started on your plans for the year, so get in touch

Now the school year has started and we’re all back at work, it’s time to get ready for a great year ahead in our property markets. It looks as though market conditions will be more favourable for buyers this year, and we’re excited about helping you make your next move in 2016!

Last week, the Reserve Bank of Australia (RBA) met for its first meeting for 2016 and decided to keep the official cash rate on hold at 2.0%. According to RBA Governor Glenn Stevens in his statement after the meeting, the RBA Board is waiting for more economic data to come in before deciding if further cuts to the cash rate are necessary.

The RBA cut the official cash rate in February and May last year, bringing it to historical lows. However many economists and market analysts are predicting that another cut is on the horizon in 2016 and is most likely to occur mid-year.

As expected, property markets around the country have not been seeing much activity during January. Summer is traditionally a slower time of year for property sales and this has been reflected in low auction numbers, with only 336 auctions reported nationwide for the final week of January.

After a very fast and furious year in 2015, NSW only saw 59 auctions in the last week of January, with a clearance rate of just 45%. It is interesting to note that 22 of these properties were passed in, indicating that sellers may be struggling to achieve their expected price.

Victoria held 151 auctions with a clearance rate of 71%, Queensland held 60 auctions with a clearance rate of 50%, South Australia held 97 auctions with a clearance rate of 68%, Western Australia just 29 auctions with a clearance rate of 56%, Canberra had 27 auctions with a clearance rate of 78% and Tasmania held 12 auctions with a clearance rate of 13%.

Clearance rates are significantly lower than we were seeing last year, indicating that the rapid rises in home values we saw in 2015 are slowing considerably, which is good news for first home buyers. During January, Sydney’s home values only increased by 0.51%. However they are still up by 10.52% compared to this time last year. By contrast, Melbourne’s home value growth is still strong, showing a 2.47% increase in January and a 10.97% increase over this time last year.

Other property markets showing a strong performance in January were Hobart, with a rise in home values of 4.67% last month, and Canberra with a 2.76% rise. All other cities showed very marginal movements of less than one per cent.

We can expect to see auction numbers rising again towards the end of February and a busy month in March. Real estate search sites are showing a good supply of housing stock with Domain currently listing over 363,300 properties on the market for sale nationwide.

If you’re planning to purchase a property in 2016, whether you’re a first home buyer, next home buyer or a property investor, we look forward to talking with you about your plans. If you’re thinking about refinancing your home, now is also a very good time to talk with us, as the lenders are offering very competitive rates across the board and some interesting incentive deals. Whatever your plans for 2016, remember we’re here to support you and help you reach your goals, so please give us a call today!

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. . Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au

Sincerely , Element Finance

GIVEAWAY TIME! This one is a MASSIVE prize guys. Here is your opportunity to become RALLY CHAMP for a day.

This is an awesome introduction to the adrenaline-fueled world of rally driving in real competition vehicles. Take your choice of rally car from a fleet of Australian Rally Championship spec super cars, including the Subaru WRX STi and the Mitsubishi Lancer Evo.

You are given four rally driving sessions behind the controls of a minimum of two different cars over the rally driving dirt circuit layout, for a minimum of 28 laps of the ‘Rally Practice Stages’. You’ll be taught mind-blowing professional rally driving techniques which, in addition to getting the most out of these high-performance rally driving vehicles on the day, will also make your everyday driving safer and more enjoyable.

Are you in the market for your first home? Perhaps you’ve been dreaming the classic home buyer’s dream of a little house with a garden and a white picket fence? If this sounds like you, then you may have found that your property searches in 2015 were unrewarding – with the property market running hot and stiff competition for every opportunity.

Could it be time to revise your vision and start thinking about buying an apartment instead? A higher level of availability could make a trendy little apartment a great first step onto the property ladder! Whilst it may not be your first choice of property, an apartment could be a good way to get started and it could prove to be much more affordable for many first home buyers in 2016.

Why buy an apartment?

Depending on the size and location, apartments do tend to be less expensive than houses and this often means they make better entry level properties. Because they cost less, you will require a smaller deposit to get onto the property ladder. In the case of a new build apartment, you may be able to purchase off the plan and this could potentially save you money on stamp duty as well.

Generally speaking, maintenance costs are usually less on an apartment than on a house, simply because there is less to maintain. This can be a distinct advantage when buying your first home on a tight budget. This is particularly true if you buy a newly built apartment where all of the appliances, fixtures and fittings are brand new.

Additionally, many analysts believe that there may potentially be an oversupply of newly built apartments in many capital cities both now and over the next two years. This may have the effect of keeping prices down, making apartment and unit properties even more affordable.

A constant supply of new apartments may also restrict price growth on older, more established apartments. This may give you the opportunity to get a bargain buy and add value by renovating.

What to look for in an apartment purchase

Location. If you want to make sure that your apartment will appreciate in value whilst you own it, you should try to buy one in a location that will be popular with everyone and not just yourself. Look for a location that is close to public transport, cafes, restaurants, shopping and lifestyle amenities.

Before you consider buying a property in an outer suburb or a rural location, have a chat with us about the potential for rental and capital growth. An inner city or suburban location is usually more popular with first home buyers, but if you find an opportunity you can afford in an outer lying area, it is a good idea to do some careful research to help you make a wise decision.

Boutique. It is often true that apartments in smaller, boutique developments tend to be more attractive to renters than really large apartment block developments. Unless the apartment is really great – with an excellent facilities, location and local amenities, you may like to choose an apartment in a smaller development if you can. Of course, budget is a major factor but if you have the choice, go for a smaller apartment in a boutique development over a larger apartment in a really big block.

Parking. Off-street parking can be very important to some property buyers, so try to buy an apartment that comes with its own designated parking space if you can. If you can get one with a lock-up garage as well, then that’s even better! If you find an apartment you like that doesn’t have parking, carefully consider the availability of parking in the area and nearby the block.

Size. Apartments come in all shapes and sizes, but many first home buyers will be looking at one-bedroom apartments. If this is the case, look for one that is larger than 50sqm internally as some lenders may not want to finance an apartment that is smaller than this.

If your budget will stretch to a two-bedroom apartment, then go for it. You may be able to rent out the extra space to help pay off your home loan – which could be a bonus.

Easy lift access. Apartment buildings that do not have a lift and require you to walk upstairs to reach your apartment can be very inconvenient. New build apartments usually have lifts, but consider carefully before you buy an upper floor apartment that doesn’t have one!

Balcony. People like to be able to get outside when they’re at home, so look for an apartment with a balcony or private outside area if you can. Even a small outside area will make your apartment more attractive to potential buyers down the track and this may have a positive effect on your resale value.

Views. Apartments with nice views, or at least a sunny outlook tend to be the better buy. If you are buying off the plan, take particular care to consider what the outlook will be. If there are plans to build another apartment block right next door, you may find yourself with limited sunlight or a view of your neighbour’s bathroom if you’re not careful.

Do your research and get pre-approval on your financing

As with any property purchase, it is really important to do your research before you put down your deposit. Try to find out if there are a lot of new apartment developments planned nearby in the future as this will affect the value of the apartment and may limit capital growth. If you are buying off the plan, it is particularly important that you get a professional independent valuation on what the value of the apartment will be when it is finished.

Before you put down your deposit on any property – particularly if you will be buying off the plan, please talk to us about the financing to make sure it will be possible to arrange the amount you need to complete the purchase. Remember, having 10% of the purchase price for a deposit does not necessarily mean that a lender will automatically let you borrow the rest!

We’re here to help you work out your financial position and get pre-approval on your loan so that you can search for your first home with confidence. Even if you’re some time away from having your deposit ready, it could pay to chat with us about your plans – we may even be able to help you get there sooner. Please get in touch on the details below.

Rates on hold – but for how long? If you are thinking about fixing your home loan rate, call us today. Element Finance guarantee to beat any advertised 1-5 year fixed interest rate from ANZ Australia, NAB, Westpac & St.George Bank. Probably most others too! This is a limited opportunity so get in touch now to see just how easy it is to save. Element Finance has em covered.

Are you an experienced accountant that regularly works with property investors? We need to hear from you if you are comfortable discussing and assisting clients with some of the following:
Taxation returns for investment property holders
Debt minimisation strategies
Asset protection via trusts and other vehicles
Tax planning
Assisting with record keeping
Craft beer

Element Finance are keen to establish a reciprocal referral relationship with a reliable and knowledgeable accountant. If you want to hear from a lot more investors and would also like to have confidence your clients’ finance is always done right, get in touch now, we need to talk.

Now that the hot weather is well and truly here, wouldn’t it be marvellous to have your own swimming pool in the back yard? Not only are they a great way to keep cool in summer, they make great entertainment for the kids and can be a stylish addition to your home. However, as a home owner, there’s more to consider than just keeping cool and having fun. Below are some questions to think about before taking the ‘plunge’.

Why do you want a swimming pool?

It’s true that adding a swimming pool to your home may be considered an investment – but is it an investment in your lifestyle or your future? You may consider adding a swimming pool to your home for the benefit of family and friends, to make it more attractive to renters, to increase your home’s value, or to make it easier to sell.

Whatever your primary motivation may be, most home owners will be concerned about adding value to the property, as your home is likely to be one of the biggest investments you’ll ever make. We therefore recommend that you seek professional advice before going ahead with your swimming pool plans, just to make sure you don’t overcapitalise or buy a pool that isn’t right for your property.

Who is the target market for your home?

Many people love swimming pools and homes that have them can be very attractive to families with older children – so if they are your target market you may want to go ahead with your backyard oasis plans. Pools are also a great idea for investment properties that are rented out as holiday homes, as people may look for a pool when making their selection for a place to visit in their time off.

Busy professionals and property investors, however, may prefer a property without a swimming pool. This kind of purchaser tends to look for a property that requires as little maintenance as possible. Tenants have been known to neglect home maintenance and may not be prepared to take the time and trouble to keep a pool sparkling clean – so if tenanting the property will be the eventual goal, a pool may not be a good idea.

Are pools popular in your location?

Another factor to consider is the location of your home. For example, if your property is in an area that is already popular with families – close to good schools, universities, sporting facilities and other amenities that families require – then a pool could make your home even more attractive.

Outer suburban properties that are in a hot weather location and are some distance from the beach may also benefit greatly by the addition of a swimming pool. If adding a pool will also add a measure of convenience, then so much the better!

Another thing to consider about the location is your local climate. A swimming pool in a place that is prone to very hot weather will get a lot of use. But if the property is in a location that has a cooler climate, then adding a swimming pool may not make good sense.

Will it add more value than it costs?

The answer to this question will differ in every case and has much to do with the pool you choose and how well it integrates with your existing property. As with any home improvement or renovation, it is important not to overcapitalise – if you spend too much money, you may not get back the cost of your renovation when you sell.

Pools come in a huge variety of shapes, sizes and price points. The trick is to choose the one that will suit your particular home and budget. To help you to determine how much you should spend, you could do some research to compare the values of homes in your area with and without a swimming pool. This will help you to create a realistic budget and avoid spending too much money.

Local real estate agents may also be a good source of information. You can show them your plans and ask them to give you an opinion on the value of your home before and after the pool is installed so you can see if you’ve got the budget right. They’ll be able to tell you whether adding a swimming pool is a good idea or not, according to what their buyers want and also give you an opinion on the style of pool you should choose to make sure it does not detract from the value of your home.

Would other renovations add more value than a pool?

If your primary concern is adding value to your home, then you may want to consider whether other renovations would add more value than a swimming pool. Does your home need a new kitchen? Have you considered adding another bedroom or a second bathroom for example? Is the home fitted with up-to-date, energy efficient appliances? These kind of improvements may be more important than adding a swimming pool in terms of value.

If you want to add a swimming pool to your home, or would like to make other renovations to facilitate your lifestyle or add value, then we’d love to help. There are several different ways to arrange the finance and we can help you to decide which one is the right option for your particular financial circumstances and goals, then help you to get it all set up. We can also provide you with referrals to other professionals you may need for advice. We’re here to help you with all your property plans and dreams, so please give us a call today.

2015 was a fantastic year for property in Australia. Our major property markets saw some significant capital gains and many property sellers made a good profit. There were also record numbers of auctions around the country – but competition was fierce and if you were looking to buy, securing the property you wanted wasn’t always easy.

2016 promises to be another competitive year for property purchases, so if you want to get in on the action, you’ll need to be on top of your game. If your New Year resolution is to buy a property this year, here are some things you could do to help you succeed.

1. Identify a goal

It’s very easy to make a New Year resolution, but most of us do this every year and very seldom stick to it. That’s because a New Year resolution needs to be very specific if you want to achieve anything.

Having a vague resolution such as “Buy a property” isn’t going to get you over the line. You need a more specific goal like “Buy a 3 bedroom house near X before June 30” or “secure an investment apartment in X before Y”. Adding a sense of urgency to your goal will motivate you to keep on top of what you need to do to make a successful purchase. Below we talk about some of the steps you will need to undertake to reach your goal – you may find that it will help to schedule these activities in your diary so that you don’t put them off.

2. Be ready to act

Procrastination is the enemy of success. There are often thousands of properties on the market and if you don’t know where you want to buy or what type of property you’re searching for, you’ll find yourself procrastinating about which properties to view.

The answer is to sit down, make some decisions and then do your research. If you are buying a property as your own home, you can consider which suburbs will be convenient for you in terms of work, whether you need to be near public transport, whether you need an apartment or a house. If you are looking for a property investment, you’ll need to consider properties that meet your investment strategy, have good capital growth potential and are easy to tenant.

3. Set a realistic savings budget

Good money habits are very important if you’re planning to get a home loan this year. Lenders don’t just look at how much of a deposit you have, they assess your ability to save and make repayments.

Taking on a home loan is a big financial commitment and you will also have the added expense of maintaining your property, paying rates, insurance and other expenses on top of your mortgage so you will need to demonstrate that you have your budget under control and are a good saver.

To set a monthly savings target, you could start by making a list of your expenses. It’s important that you are realistic and make a comprehensive list, so that you understand where your money is going and where you can cut back if necessary when you get a home loan.

4. Get your financing in place

We suggest you talk with us about getting pre-approval on your home loan before you start looking at properties you might like to buy. Establishing a price limit for your purchase is key.

We will help you to fully understand your financial position and help you to determine how much you can borrow and as a result, what kind of property you can afford to buy. Setting a realistic savings budget first (as mentioned in point 2 above) is an important part of this process.

It’s a good idea to make talking to us a priority, as it could make all the difference to your success. If you know exactly what you can afford, you will save yourself hours of time looking at property listings and save days making inspections on homes.

5. Get a professional team on your side

Let’s face it, buying a property isn’t easy. Having a professional team on your side could make all the difference to your success. You’ve started out by getting a professional mortgage broker (well done), but you may also need help from other professionals as well (and in many cases, we can help you by providing a referral).

Buyer’s Agent: If you are short of time, you may want to consider engaging a reputable Buyer’s Agent. They can do a lot of the leg work in locating you suitable properties to view and make a big difference when it comes time to buy.

Real Estate Agents: If you don’t want to go with a Buyer’s Agent, you may like to get in touch with reputable real estate agents in the areas you want to buy.

Conveyancer: When you locate the property you want to buy, it will pay to have a Conveyancer or Property Solicitor lined up so that you can move quickly.

Inspectors: When you locate a property you want to purchase, you’ll need to get building and pest inspections done before the auction date. Line up your inspectors beforehand and you’ll save yourself a lot of time and hassle in locating them when you need them.

Remember, we’re here to help you keep your New Year resolution to buy a property in 2016! It won’t be easy, but we’re sure you’ll find it’s worth the effort. We’re ready to help you assess your financial position, and help you get pre-approval on your home loan so that you can start the process of locating an opportunity and making a purchase. Give us a call today and let us help you get started.

Happy New Year! We hope that you and your family enjoyed a very relaxing holiday break and managed to get into the great outdoors to enjoy this lovely summer weather.

Are you ready for another fantastic year in our property markets? 2015 was a fast and furious year that favoured property owners and sellers in almost every capital city. However, many analysts are predicting that our property markets will improve for buyers this year, with conditions starting to look much more favourable for first home buyers and owner occupiers.

This is largely due to a reduction in property investment activity in response to the tightening of controls on investment lending by the Australian Prudential and Regulatory Authority (APRA) in June last year. Activity from foreign property investors also slowed in the last quarter of 2015.

Both of these factors have contributed to reduced competition for properties. This has caused a slow-down in rapid rises in home values around the country, but particularly in Melbourne and Sydney where markets were running hot all year.

Sydney home values increased by 11.47% during 2015, but they were down by 2.37% for the final quarter. Melbourne values were up by almost 11% for the year, but fell by 1.70% for the final quarter.

Other capital cities saw more modest movements in home values for the year. Brisbane/Gold Coast saw a 4.57% rise in home values and Canberra saw home values increase by 4.09% for the year. In Perth, home values decreased in 2015 by 3.73% and Darwin also saw home values fall by 3.63%. Hobart also showed a marginal decrease in home values for the year of 0.72% and Adelaide showed an overall decrease of 0.13%.

During December, there was still a great deal of activity going on in most states. Auction numbers were surprisingly high for that time of year, however clearance rates were much lower and many more properties sold prior to auction than was usual for the year.

With many people only just returning from holidays, we can expect property market activity to be continue to be quiet for the remainder of January. However, with interest rates remaining at historical lows, and further rate cuts looking likely in 2016, we can expect general property market activity to be busy again this year, with large auction numbers already on the horizon for February and March.

Whether you’re a first home buyer, looking to refinance or are planning to invest in property this year, we’re here to help you formulate your plans and access the right financing for your needs. We look forward to assisting you to achieve your goals in 2016, so please don’t hesitate to give us a call to get started today.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

Sincerely , Element Finance

Happy New Year! We hope that you and your family enjoyed a very relaxing holiday break and managed to get into the great outdoors to enjoy this lovely summer weather.

Are you ready for another fantastic year in our property markets? 2015 was a fast and furious year that favoured property owners and sellers in almost every capital city. However, many analysts are predicting that our property markets will improve for buyers this year, with conditions starting to look much more favourable for first home buyers and owner occupiers.

This is largely due to a reduction in property investment activity in response to the tightening of controls on investment lending by the Australian Prudential and Regulatory Authority (APRA) in June last year. Activity from foreign property investors also slowed in the last quarter of 2015.

Both of these factors have contributed to reduced competition for properties. This has caused a slow-down in rapid rises in home values around the country, but particularly in Melbourne and Sydney where markets were running hot all year.

Sydney home values increased by 11.47% during 2015, but they were down by 2.37% for the final quarter. Melbourne values were up by almost 11% for the year, but fell by 1.70% for the final quarter.

Other capital cities saw more modest movements in home values for the year. Brisbane/Gold Coast saw a 4.57% rise in home values and Canberra saw home values increase by 4.09% for the year. In Perth, home values decreased in 2015 by 3.73% and Darwin also saw home values fall by 3.63%. Hobart also showed a marginal decrease in home values for the year of 0.72% and Adelaide showed an overall decrease of 0.13%.

During December, there was still a great deal of activity going on in most states. Auction numbers were surprisingly high for that time of year, however clearance rates were much lower and many more properties sold prior to auction than was usual for the year.

With many people only just returning from holidays, we can expect property market activity to be continue to be quiet for the remainder of January. However, with interest rates remaining at historical lows, and further rate cuts looking likely in 2016, we can expect general property market activity to be busy again this year, with large auction numbers already on the horizon for February and March.

Whether you’re a first home buyer, looking to refinance or are planning to invest in property this year, we’re here to help you formulate your plans and access the right financing for your needs. We look forward to assisting you to achieve your goals in 2016, so please don’t hesitate to give us a call to get started today.

It’s  that time of year when we spend up big – buying presents for our family and friends, eating out, decking the halls with Christmas decorations and even going away on holidays. This can be a very stressful time for those of us on a tight budget. And it can be particularly stressful if you already have debts that you’re struggling to pay down.

If you’ve been worrying about how you’ll manage your debt repayments next year, then help is at hand. Debt consolidation is one of the services we offer and we can look at ways to help you to re-arrange your finances to make things more manageable and eliminate the stress.

Are you stuck in a credit card trap?
Few of us on a responsible budget waste money on unnecessary spending, but credit balances have a horrible way of building up over time. The higher your balance, of course, the more interest you have to pay and that’s where things can start to get stressful.

It’s not difficult to get to a point where reasonable repayments are suddenly just enough to make the interest repayments and do nothing to pay down the balance. Credit card interest can be as high as 20% per annum or even more in some cases, and meeting these interest obligations can cut deeply into your monthly income – which in turn causes you to use your credit cards and run up more debt.

If you have personal loans, car loans or have used store credit as well as your credit cards, then things can really start to become difficult. We call this kind of debt ‘bad’ because it is expensive and does nothing to help you build wealth for your future – as opposed to a home loan which is a ‘good’ form of debt because it helps you build wealth and equity over time.

What can be done to break the vicious cycle?
Once you get into a situation where a large proportion of your income is going on paying your credit card interest, it can be difficult to break the cycle. The answer is to consolidate or collect all your debts into one, giving you a single repayment that carries a much lower interest rate than your existing credit cards and other forms of ‘bad’ debt.

By consolidating your debt and organising a new way to finance it, you can also spread out your repayments over time and that also helps to reduce the amount of money that goes out from your monthly pay packet. This will mean that you can use your income to pay off your debt and support your lifestyle instead of spending it on huge interest repayments. You may even find yourself in a position to save some money!

Two ways we can help you consolidate your debt
The idea of debt consolidation is to take out a new, low-interest loan and use it to pay off all of your old high interest debts – like credit cards, store credit and expensive car loans. There are basically two options for this kind of debt consolidation:

1. Refinance your home loan and use some of the equity to pay off your debts.
2. Take out a personal loan with a lower interest rate to pay off your debts.

Home loan interest rates are currently the lowest interest rates available in Australia. Refinancing your home loan to consolidate your debts means taking out some of your equity and this will increase your home loan repayments. But as they will be spread out over a long period of time, and home loan interest rates are much lower than credit card interest rates, this should work to lower your overall monthly repayments considerably and help you to get ahead.

The other alternative is to take out a personal loan to consolidate your debts. Personal loan interest rates are several percentage points higher than the average home loan, but they are generally less than what most of us are paying on our credit cards.

In addition to lowering the amount of interest you have to pay, a personal loan will allow you to choose your loan term to spread your repayments out and make them more manageable. This kind of debt consolidation gives you the added advantage of seeing your actual debt being eliminated – at the end of the loan term your debt will be completely paid off and you’ll be debt free!

Give us a call – we’ll be glad to help!
If you’d like to talk to us about consolidating your debts, please don’t hesitate to give us a call now. Our aim is to help you to find a way to make your monthly repayments more reasonable and free up more of your income so you can live comfortably and worry-free.

The temperature is UP here in Fremantle and Perth so its time to hit the water – in style! This month,Element Finance are giving you AND a friend the chance to get into the Indian Ocean in the most unique way we can find – on a Jet X-treme jet board! For your chance to dive like a dolphin into the deep blue, enter our competition with these 2 easy steps:

1. LIKE the Element Finance Facebook page
2. Visit the Element Finance page and comment on this image with the name of the person you want to fly across the water with.
But hurry, competition closes on 18 January. Winner announced 19 January. For full T&Cs, please email mike@elementfinance.com.au

We’ve just been through the busiest time of year in the property game. If you’re interested in purchasing property, then spring is when you’re usually flat out researching the market, viewing properties and attending auctions. But now that summer is here and the busy period is slowing, it’s a good time to review your financial position and the financial products you’re already using. Are they still the best options available for you?

A regular home loan health check is an important part of the ongoing service we provide to you and it’s particularly important if you’ve had your loan/s for a while. In this article we look at the reasons why you might want to review your home loan right now and how you could benefit from talking to us.

What is a home loan health check?
The term of your home loan may be as much as 30 years, but that doesn’t mean you have to keep it for that long. A home loan health check is a service that we like to perform for you on a regular basis. It entails a short discussion about how you use your loan and a basic review of your financial circumstances. It gives you the opportunity to ensure that your home loan is still the best product available for you – because let’s face it, things change.

These days its common practice to review your home loan regularly. New financial products come onto the market all the time and it’s a good idea to compare the loan you have with what’s available now. Perhaps you now need a different type of home loan, or you could save money on repayments. Maybe your lender has raised your interest rate and you’d like to see if you could do better. The idea behind a home loan health check is to make sure you have the right product for you and to give you peace of mind that you’re not paying too much or missing out on any benefits.

These are the questions we consider during your home loan health check:

• What are your financial goals and objectives for the year ahead?
• Have your financial circumstances changed?
• Are you paying a higher interest rate than you have to?
• Are your fees too high, is there a way to cut them down?
• Does your home loan give you the features you need?
• Are you paying for features you don’t use?
• Are you interested in accessing your equity?

Why should I get a home loan health check?
Even though the Reserve Bank of Australia (RBA) has kept the official cash rate on hold for most of the year, interest rates have been on the rise due to changes in banking regulations. Things have changed for both home owners and property investors in terms of how much your home loan costs in interest rates and this alone gives you a very good reason to check that you’re still getting the best rate available for you considering your personal financial circumstances and goals.

The fact is, whilst most lenders have raised their interest rates over the last two months, some lenders have raised their rates more than others. If you’ve had your loan for a while and your interest rate went up recently, we can compare your current home loan with other products from a wide variety of lenders to see if you could benefit from refinancing your home loan with a different lender.

Refinancing to a home loan with a lower interest rate could potentially save you thousands of dollars over the life of your loan. And if you’re considering refinancing to a different loan, why not take a look at your other finances at the same time to see if refinancing could help you there as well? For example, if you have credit card debts, you could take out a little equity when you refinance to pay them off and save yourself a lot of money on expensive credit card interest.

What are your property purchasing plans for 2016?
If you have any plans to purchase property in 2016, getting a home loan health check now could help you determine your financial position and help you achieve your goals. This is true if you’re planning on moving to a larger home, or even if you’re just thinking of renovating your existing home.

If you are a property investor or are planning to invest for the first time in 2016, we highly recommend that you get in touch. Recent changes to banking regulations regarding investment lending/borrowing have really changed the game and you may benefit from discussing your options.

You may think that you are now unable to move forward with your property investment ambitions, or perhaps you are uncomfortable with your current financial structure. Don’t worry, we’re here to help! We’ll do our best to help you get past any impediments and help you look at ways to continue to strive for your property investment goals.

Why not call us now to get your home loan health check underway? It will be of great assistance to your property plans in 2016, cost you nothing and may even save you money! We’re here to help you make sure you’ve got the right financial products for your needs, personal financial circumstances and goals, so please give us a call today.

Summer is finally here and it’s the time of year when we all start dreaming of owning our own holiday home and enjoying endless sunny days by the sea. But is buying a holiday home really a good financial decision? Is there a way to make a holiday home purchase work as an investment as well?

We’re all guilty of spending part of every holiday gazing into real estate agent’s windows and wondering if (or when) we’ll be able to afford our own slice of paradise. And if you take out a holiday home rental when you go away on holidays, you’ll be fully aware of how much they cost and the great returns they can bring! However, owning your own holiday home and owning an investment property in a holiday location are two very different propositions.

Buying a holiday home for yourself
If you are buying a holiday home entirely for your own use, your primary considerations will always be about how you and your family will use the property. You’ll be looking at the location to assess whether or not it will facilitate a good holiday for your family members – is there enough accommodation for the whole family, does it provide the sporting options and facilities your kids will want, is it close to your relatives if that is important to you?

Buying a holiday home for your own use could be a good financial decision if you have the funds to pay the mortgage on your second home without the assistance of rental returns, and you buy in the right location. However, the right location is key to ensuring your purchase proves to be an increasingly valuable asset over time.

When choosing a location that will help your property increase in value, here are some points that might help:

• The property is within a two hour drive of a capital city or airport
• The location has lifestyle facilities such as shopping, quality cafes and restaurants
• The location offers attractions such as vineyards, watersports, amusement parks etc.
• The market is not oversupplied with holiday homes that can’t be sold or rented.

Buying a holiday home as an investment
When buying a holiday home for investment purposes, your considerations and objectives will be different than if you were buying a property for your own use. That’s because the primary purpose of an investment property is to earn you money, not provide you with a second residence. When buying any investment property, it is very important not to make an emotional decision – profit should always be your first consideration.

Several things determine whether or not a property may make a good investment:

• Will it be easy to find tenants?
• Will it earn enough rental returns to cover your costs?
• Will it provide you with a capital gain over the period of time you plan to own it?
• Can you cost-effectively improve the property to increase your capital gains?
• Does the property have the access and lifestyle considerations that make a good holiday home? Will these attractions develop further in the future?

When making your property investment, you also need to remember that getting a regular rental return from a holiday investment property may be more difficult than with an ordinary investment property. That’s because demand for holiday homes tends to be seasonal. It may be easy enough to find tenants during the peak summer holiday season, but it might not be so easy to find them year round – especially for seaside purchases.

So, where does that leave you in terms of enjoying your holiday investment home for your own use occasionally? Trying to get the best of both worlds – a holiday home for your family that is also an investment that covers its own costs – may prove to be difficult. However it may be possible to rent out the property some of the time to help cover some of your costs.

Call us to chat about your plans
We’re here to help you decide what option is right for you. We’re always happy to crunch the numbers for you to see if your plans are financially sound. We’re also happy to help you structure your loan and find the right financial products to maximise your investment property buying power. If you’ve been dreaming about a holiday home of your own, or are planning to buy an investment property in 2016, then please give us a call. We’ll be happy to help.

Christmas is just a few weeks away and we’re all looking forward to a summer break after a very fast-paced year in our property markets. Our last newsletter for 2015 focuses on your goals, financial health and getting ready for another busy year in 2016.

The Reserve Bank of Australia (RBA) met for their final meeting for 2015 last week, but there was no rate cut to give mortgage holders an early Christmas present. The official cash rate remains on hold at 2.0 per cent.

The RBA will not meet again until February 2016, so the cash rate will stay at this level at least until then. The question is, can we expect further rate cuts in 2016? Home value growth looks set to slow down next year and this may give the RBA room to make a further cut. Analysts predict that the sluggish performance of our economy over the last year may prompt a move, but according to RBA Governor Glenn Stevens, this will depend on the economic data.

Sanity appears to be returning to the Sydney and Melbourne property markets, with both showing declines in home values and auction clearance rates during November. This is good news for first home buyers, and for property investors trying to enter the market.

In Sydney, home values fell by 1.37 per cent during November, but were still showing growth of 12.82 per cent over this time last year. Melbourne home values declined by 3.45 per cent, but were up by 11.82 per cent year on year. Canberra was down by 0.50 per cent but showed an increase of 4.52 per cent year on year. Hobart was down by 2.38 per cent, but showed an increase year on year of 1.12 per cent. Adelaide home values rose by 0.69 per cent last month and by 3.27 per cent year on year. Perth home values increased by 0.33 per cent last month but declined by 4.13 per cent year on year. Brisbane and the Gold Coast saw a rise of 0.44 per cent and a rise of 4.45 per cent year on year.

Despite the RBA keeping the official cash rate on hold, interest rates have been on the move in October and November. Lenders have increased rates for property investment loans in line with APRA’s regulations and some lenders have also made slight increases to home loan interest rates for owner occupier home loans.

In this issue, we’ve included an article about getting a home loan health check and if you’ve had your loan for a while, we believe this is really important. We can assess whether your home loan is still the right product for your needs, personal circumstances and goals and shop around to compare your loan to what’s available on the market now to see if we could save you money. If you’re a property investor, we’re also very happy to help you formulate your plans for 2016, so please give us a call today.

We’d like to take this opportunity to wish you and your family a very happy holiday season and a safe and prosperous new year. We look forward to another great year of working together to achieve your financial goals in 2016.

The information provided in this newsletter is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter, and you consider whether the information is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

Information sources: Auction results: www.realestate.com.au. Home values:www.corelogic.com.au

Sincerely , Element Finance

A home loan isn’t just a debt, it’s a great financial tool that you can use to build wealth and facilitate your lifestyle. That’s why few people keep their original home loan for the life of the loan – it pays to keep it up to date to meet your needs as circumstances change.

Refinancing your home loan means replacing it with one that better suits your current needs – and it’s something you may consider for a variety of different reasons. Here are the top four reasons why you might consider refinancing your home loan.

1. To save money on your home loan repayments

The top reason why people talk to us about the possibility of refinancing their home loan is because they may now be eligible for a better interest rate. Cutting back on the interest you pay could reduce your repayment amount and save you a considerable amount of money over time.

When you first apply for your home loan, your financial circumstances are one of the factors that influence the home loan interest rate available to you. As your personal situation improves over time, you may be able to refinance to get a better interest rate.

Additionally, you can often get a better interest rate by switching lenders. For example, the big four banks recently made a move to raise interest rates outside of RBA movements. However, not all lenders raised rates at the same time, with many of the smaller lenders keeping their rates between 0.20 and 1 percent lower than the bigger lenders.

If your lender raised your rates recently, now may be a good time to ask us to shop around for a better deal that could save you money.

2. To access your equity

Property investment is currently one of the most popular ways of building wealth for your future. Whilst saving the deposit to purchase a second property may be difficult for many, rapid rises in property values in recent years have provided an opportunity to refinance in order to access some of the equity in their homes to use as a deposit instead.

The equity in your home is calculated by subtracting the amount you owe from the current value of your home. In order to refinance to access your equity, you will need to have your home valued to determine its current value.

Accessing your equity will increase the amount you owe on your original property and increase your mortgage payments. However, if you use the equity to make a property investment, you will have the opportunity to capitalise on home loan value increases on two properties over time and this has the potential to help you increase your wealth in the long run.

Other uses for a lump sum in cash are literally endless – you could use your equity to buy your family a boat, a caravan, the overseas holiday you’ve always wanted or even use it to invest in a business or stocks and shares. However, we encourage you to act responsibly and only access your equity for lifestyle reasons if you can genuinely afford it. That means talking to us to help you discover your real financial position and if accessing your equity is a good idea for you.

3. To renovate or extend your home

Renovating or extending your current home to meet the needs of your growing family or changing lifestyle is often a better option than purchasing an entirely new home. By renovating or extending, you will be able to create the home that exactly meets your needs and if you’re careful about the improvements you make, perhaps even increase its value at the same time. Even though you will need to access your equity, you may be able to improve the value of your home to offset this cost.

Maintaining the value of your largest asset is important. So even if you don’t want to extend your home, keeping it up to date and in good repair is something you should consider periodically. If your home could do with an update, don’t hesitate to talk with us about refinancing to renovate.

4. To consolidate debts

Your home loan interest rate is probably the lowest form of interest you will need to pay on any loan in Australia. Credit card interest rates can be as much as four times higher than your home loan interest rate and this can make credit card debts difficult to pay off. Other expensive debts like car loans or personal loans can also prove to be a drain on your finances.

If the value of your home has increased over the last couple of years, it may be worth considering accessing some of the equity in your home to pay off your more expensive debts. This could dramatically reduce the amount of interest you have to pay on your overall debts each month, offering you some financial relief and helping you to enjoy a more comfortable lifestyle.

It’s a far better idea to be in a position to save money each month rather than waste it on expensive credit card interest repayments. By refinancing to consolidate your debts, you could possibly find yourself in a position to save money to make other investments or even pay off your home loan sooner. Ask us to help you crunch the numbers to see if using your home loan to consolidate your debts will be a good idea for you.

Ask us if refinancing is the right move

If you have plans or goals for your future then remember, your home loan can be used as a financial tool to help you reach them. We’re here to help you make the most out of your home loan, so please don’t hesitate to give us a call for a chat about what you want to achieve and how refinancing your home loan could help to get you where you want to be. We’re always happy to spend the time with you to help you make the right decisions to reach your financial goals, so please call us today.

Christmas is in the AIR and so that means our BIGGEST giveaway ever is happening. We have a brand new iPad Air 2 64GB with wifi and cellular valued at $1,000 PLUS a $100 iTunes voucher here in the office ready to wrap for you. For your chance to get your name on the Christmas label, enter our competition with these 2 easy steps:

1. LIKE the Element Finance Facebook page right here
2. Visit the Element Finance page and comment on iPad image with the name of your favourite (or least favourite!) Christmas carol.

But hurry, competition closes on 18 December. Winner announced 19 December. For full T&Cs, please email mike@elementfinance.com.au

Many Australians may not have adequate income or mortgage protection insurance cover in place to service their home loan repayments and living expenses in the event they lose their job, or suffer a serious illness or injury that would make them unable to work. In fact, while most of us have car insurance, it’s been estimated that only 6% of us have our own income adequately covered! 

As your mortgage broker, we adhere to certain ethical lending practices that are required by law. One of these requirements is to do our best to ensure you suffer no hardship when it comes to repaying your home loan. That’s why we always discuss your insurance arrangements with you when you apply for a home loan through us.

What is income protection insurance?

There are several different types of insurance that you could use to cover yourhome loan repayments in the event you were unable to earn an income. One option that our home loan customers take out is income protection insurance. We can help you to choose a policy that’s tailored to your particular needs and protects you in a variety of different ways, including:

• Extended illness
• Involuntary unemployment
• Kids injuries
• Holiday injuries
• Permanent disability

There are several different types of insurance that you could use to cover yourhome loan repayments in the event you were unable to earn an income. The cost of income protection insurance is usually tax deductible for most people (you’ll need to check with a qualified tax adviser to see if this is the case for you). However, not all insurance policies are tax deductible.

Other types of insurance policies that you could use include:

• Loan or mortgage protection insurance
• Life insurance/total and permanent disability insurance

Why should you get insurance cover?

Taking out a home loan can be an expensive exercise, there’s the deposit, application fees, inspections, conveyancer – the list goes on. Income or mortgage protection insurance can just seem like an additional expense that you can choose to avoid. But what you need to consider is: can you afford not to have it?

If you couldn’t work for six months, how would you support yourself and yourfamily? Would your savings be enough to cover your home loan repayments for an extended period of time, or would you be at risk of losing your home?

You may think that nothing will happen to you that may cause a significant interruption to your capacity to earn an income, but consider these facts:

• More than 50,000 people are hospitalised every year due to transport accidents. 81% of these people are working age and need to spend more than 5 days in hospital. ii
• 126,800 new cases of cancer will be diagnosed in Australia this year. iii
• At the end of 2014, more than 150,000 Australians were unemployed for six months or more. iv

As you can see, there are plenty of events in life that could affect your capacity to earn a regular income. Planning for the unexpected could be very important to your well-being, your family and your financial future!

Getting your protection organised

We can help you find an income protection policy that provides the level of cover you need according to your personal situation and financial circumstances. Getting it organised could be as easy as giving us a call.

So don’t spend another moment worrying about what the future may bring – if you need to arrange insurance cover or want to check if your cover is adequate, please give us a call today. We’re here to help you decide exactly what insurance you need and help you find the cover to suit.

Home loans are changing with the times. You can now get home loans in a variety of different forms, all with different facilities and features. Deciding which home loan suits your needs can be quite daunting and that’s where sound advice from your professional credit adviser can be invaluable. We’re here to help you sort through all the different home loan options and help you choose the one that’s right for you. But where do you start? What features do you need to consider?

Choosing the right home loan

Before you start shopping for a home loan, why not sit down and discuss your personal circumstances, financial situation and goals with us? Once we identify what’s important to you, it will be easier to decide what features and facilities you might need from your home loan

While the first question some clients ask us is ‘what is the best interest rate I can get?’, choosing your home loan isn’t just a matter of picking the one that has the lowest interest rate. The home loan with the lowest interest rate isn’t always the least expensive option when you take into consideration fees, charges and some of the advantages you might get from a loan with features that better suit your needs. These may include:

• The ability to make additional repayments
• Interest only options
• Lump sum repayments
• Offset account
• Transaction account/credit card facilities
• Redraw option
• Split loan option.

Two common facilities that could help you save money on your home loan include transaction or savings offset accounts and redraw facilities. We get quite a few questions about these features, so let’s have a look at these in a bit more detail below.

Transaction or savings offset accounts

One of the newer and increasingly popular financial products on the home loan market is a transaction or savings offset account and most lenders have one on offer. Whilst they may not come with the lowest interest rate on the market compared to your basic home loan product, they may help you to save money on how much interest you have to pay and may also help you to save on bank fees you would usually pay for your transaction account and credit card.

A transaction or savings offset account can be used like an everyday bank account, but it is linked to your home loan so that the money you have in it reduces the amount of interest you have to pay on your home loan. In other words, the money in your offset account counts against the amount you owe on your home loan – so the more money you have in there, the less interest you have to pay on your home loan!

You use the account like you would your ordinary transaction account – your salary is paid into the account and your spending comes out of it. With good budgeting, you can really make it work to reduce your interest obligation and help you pay off your home loan sooner. This kind of account can also help you save money on overall banking fees as they usually offer fee free use of ATMs, credit cards and more.

Redraw facilities

A home loan with redraw facilities is a popular choice for many home buyers. It allows you to make extra repayments and gives you the option of withdrawing those extra repayments at a later date if you need the funds.

Usually redraw facilities are only available with variable interest rate loans, as other types of home loans like fixed interest rate home loans or basic home loans do not give you the option of making extra repayments.

Every extra repayment you make to your home loan goes toward reducing your term and therefore the amount of interest you will need to repay over the entire life of the loan. If you make extra repayments diligently every month or even every fortnight, you could save years on your mortgage term and thousands of dollars in interest over time. Even an extra $50 a fortnight could have a dramatic affect!

However, redraw facilities give you a safety net in the event that you should ever need to access the funds quickly. A home loan with redraw facilities can give you almost instant access to your money when you need it – say your fridge goes on the blink or your car needs some major repairs, you’ll know you can get at your money right away.

What type of home loan is right for me?

There’s a home loan type available for just about any property purchase. If you want a home loan with a low interest rate and no redraw or offset facilities, credit card or transaction account then a basic variable rate home loan may be the right choice for you.

However, if you need to make sure that your home loan repayments will stay the same every month for the foreseeable future then a fixed rate home loan may be your best option.

Variable rate home loans usually come with the best range of features and although your interest rate may go up or down, you can make savings on your home loan by using the features wisely. It’s also possible in many cases to arrange a split home loan, which allows you to hedge your bets on interest rate rises by having part of the loan at a fixed interest rate and part on a variable interest rate.

As mentioned earlier, the first step in choosing a home loan is to talk with us about your personal circumstances, financial situation and goals. Getting to know you and how you will use your home loan will help us to guide you through the maze of choices when it comes to selecting your home loan. If you’d like to find out more, or just chat about your plans, please do not hesitate to give us a call. We’re here to help you get started.

We hope you are enjoying the beautiful spring weather and backed the winner on the Melbourne Cup last week! It’s hard to get down to business with so many festivities going on – but spring is traditionally the busiest time of year in property markets around the country and this year is no exception! Many analysts were predicting a rate cut in November, however the Reserve Bank of Australia (RBA) have elected to keep the official cash rate on hold at 2.0 per cent for another month. This is the sixth month in a row that the RBA has kept rates on hold after cutting rates to historically low levels in February and May this year. This extended period of stability on interest rates is having a positive effect on our economy, with the Australian dollar mostly holding at a more acceptable level and boosting our tourism and export markets. Employment is also growing and consumer spending is improving. Home loan interest rates have been on the move during October, despite the RBA keeping the cash rate on hold. These interest rate movements were initiated by the big four banks largely to protect their shareholder’s interests, with rate rises following from many other lenders. The rapid rises in home values that we have been seeing in Melbourne and Sydney are finally starting to slow in response to the upward movement in rates and the changes in investor lending regulations by APRA coming into effect over the last six months. This is good news if you’ve been struggling to get your deposit together for your first home or a property investment. Home values in Sydney only increased by 0.28 per cent during October. Melbourne home values increased by 0.64 per cent and Brisbane/Gold Coast improved by 0.16 per cent. In Adelaide home values rose by 1.47 per cent, in Canberra they rose by 1.48 per cent and in Hobart 1.44 per cent. Only Perth and Darwin showed declines. Home values in Perth fell by 2.76 per cent in October and by a marginal 0.13 per cent in Darwin. The number of properties on the market is currently quite high – as is to be expected for this time of year. Auction numbers were up in most states last month, however it should be noted that private sales are now becoming more popular than auctions in Western Australia and the Northern Territory. Auction clearance rates were down across the board, indicating that there may be less competition and buyers may be more discerning about property prices. The table below shows the relevant auction numbers for each state and corresponding clearance rates, for the week ending Sunday 1 November: STATE No. of AUCTIONS CLEARANCE Victoria 611 65% New South Wales 1361 64% Queensland 186 58% South Australia 146 58% Western Australia 49 56% Northern Territory 5 67% ACT 130 69% Tasmania 10 33% If your bank increased your home loan interest rate last month, then it may be a good time to give us a call to get a home loan health check. Not all lenders have increased their rates, and some have increased them less than others, so we can shop around to get the right deal for you. We can also access some great rates for property investors and first home buyers, so if you’d like to check what home loan options are available for you then please don’t hesitate to give us a call today. The information provided in this newsletter is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. Information sources: Auction results: www.realestate.com.au Home values: www.corelogic.com.au Sincerely , Element Finance

There are around 21,000 new businesses founded each year in Australia. And with a little over 2 million actively trading businesses country-wide in June 2014, there are plenty of good reasons to run your own small business. We often get approached by self-employed clients and prospects enquiring about their home loan opportunities. And whilst many banks have tightened their credit policies when it comes to the self-employed, with the right help, there are still plenty of options available. What are some things you need to consider as a self-employed borrower? Know your numbers Your self-employed status does not have to impact negatively on your borrowing potential, although the amount of information you can supply will ultimately decide which products are available to you. Lenders calculate how much they are willing to lend using a combination of your credit score, salary (income) records, and their affordability calculations. If you are self-employed, your overall income and financial situation may be more complicated, so it is important to establish a solid track record of low expenses and high income. Build a good record Requirements vary depending on the lender but, generally, self-employed borrowers will need both to have been in business and to have held an ABN for at least two years. On top of the usual loan application documentation, lenders may also require you to produce BAS statements, tax returns, bank accounts and perhaps a declaration from your accountant. Being concise and providing correct and accurate information to the lender will increase your chances of a positive outcome. Do your taxes and reduce debt Keep your taxes up to date so you can always show your most recent income history. And make sure the tax assessments are paid. Self-employed applicants are more likely to have their tax portals checked for anything outstanding. It’s also a good idea to eliminate or reduce your other (personal) debt. Lenders don’t just look at the balance, even if its zero – they count the limits on your credit cards and assess them as risk or funds you owe! Understand your options The good news is that lenders do have loans for self-employed people, contractors and business owners. In theory, self-employed borrowers have access to exactly the same range of mortgage products as everyone else, so long as you are able to put down the necessary deposit and substantiate your income you have a good chance of getting an advantageous rate. One option to consider is a Low Documentation (Low Doc) Home Loan. These are designed for self-employed customers and small business owners who may not have access to the financial statements and tax returns usually required when applying for a home loan. ‘’Low doc’’ simply means alternative forms of income confirmation (bank statements, financial statements etc) as opposed to PAYG slips and tax returns. With tax returns, we can also help you pursue a full documentation loan at standard rates. Have a strategy We recommend you consult with us, your mortgage broker, to formulate a plan for securing your loan well before buying your property. This allows you to build your serviceability based on expert advice and years of experience. If you are self-employed, or know someone who is, and would like to learn more about your options, please get in touch with us on the details below.

One thing we love most about our profession as mortgage brokers is assisting our clients in achieving their financial dreams. We know that for many of you, buying your first home may be the biggest financial decision and commitment you ever make. However, for some First Home Buyers, the whispers and stories they hear about buying a property encourage them to stay at home, or continue to rent, rather than get their feet on the property ladder. So, the purpose of this article is to dispel some of the “stories” we hear from those of you who are new to the property game. Let’s take a look at some of our frequently asked questions from first time purchasers: I need to pay off all my other expenses before I can apply for a home loan. Not true! You can still secure a home loan if you have an existing student study debt, or a car loan. When a lender is assessing your ability to service a loan, they certainly look at your current expenses such as any outstanding loans or credit card limits – but just because you might have one or both of these expenses, does not mean you won’t get your loan approved. Lenders look at your whole financial situation – your income, your expenses and other debts, the valuation of the property you are wishing to buy, and the percentage of that value you are hoping to borrow from them – before they determine your suitability to pay off the loan. The parental guarantee scheme no longer exists False. Security Guarantees are still an option for first home buyers, but not with all lending institutions in Australia. A lender’s Security Guarantee is essentially a parent or family member acting as a guarantor to your mortgage, giving you the extra financial support needed to maximise your chances of meeting the requirements of the bank. The parental guarantee scheme can give you a head start by making it easier for you to get into your home with help from others, and can be used to buy a home or invest. You need a 20% deposit to buy your first home Whilst this true in some cases, the size of the deposit you need to put down is actually dependent on various factors, including: what you are looking to buy, where you are purchasing, your current income and expenses, and which lender and product suite you choose to go with. There are loads of lenders out there who will lend up to 90% of the purchase price, or even 95%. However, if you borrow over 80% of the total price of the property, you may be required to take out Lender’s Mortgage Insurance, or your interest rate might be slightly higher. It’s cheaper to rent It can be line ball, and again, there are many variables to this equation – such as where you buy, where you are renting, and which loan option you choose to go with. We really can’t dispel this myth in a short newsletter article as there is a lot to take into consideration: rental price, bills, purchase price, stamp duty and other transaction costs, the expected mortgage interest rate, how much it costs to run and renovate the property, expected capital gains – and so on. If this is one question you have asked yourself, we recommend you get in touch with us to talk about your specific situation. With interest rates at record 50-year lows, and some great pockets of purchasing opportunities, it might be a good time to take the plunge, or at least do a little research to inform your decision! We hope that this article answers some of your questions. And we’re sure you have more! Get in contact with our expert team on the details below and we will be happy to assist you with any questions you may have. Good luck and we hope to help you secure your first home soon!

Spring is here! The sun is shining, the weather keeps improving, and with it often comes that urge for a thorough spring clean. With a more stable climate, and Christmas holidays looming in the not too distant future, October is a very popular time of year for home improvements and renovations. And let’s be honest, we’ve all watched a few episodes of The Block and to produce a whole room in just one week looks easy, right? Wrong. Before you get in your car and race down to your local Bunnings or Masters, before you call in the chippy to add that second level, or the bulldozer to dig the family pool you’ve been promising since summer 2010 – here are some quick pointers to make sure your spring spruce up runs on time, and most importantly, to budget. Determine what work needs to be done Take the time to walk around your home or investment property and decide what “needs to be done now” in terms of property maintenance and security, and what would be a “nice to do”. If you have big plans that will require council permission, make sure you ask the experts for input and advice. Use this time to plan what schedule you would like the work to follow, and if you are using multiple tradespeople, what order you need them to work to so that the process is as efficient as possible. Remember, little things can make a big difference. It’s important to decide early if you are after a full blown renovation, or just a simple tidy up. Sometimes doing something quick and easy like changing a light fixture or painting the walls can breathe a big burst of fresh air into your home. Set a budget, then add a little buffer If you’ve never renovated before, it can be difficult to know where to start with estimating your budget. Step one – ask a lots of questions. Use tradie’s expertise to anticipate costs for all facets of the renovation or landscaping. If you’re just doing something small like a paint job, or some planting, think about the costs of materials, and time investment. Write all this down in a clear budget – there are loads of free templates online. Once you agree to your expenditure, it will provide clarity and ensure things don’t spiral out of control. It’s also wise to allow a 10-15% buffer either side of your total projected costs – as a ‘just in case’. With unpredictable weather, or other commitments, it pays to cover yourself should things push out. Secure financing, if you need to Once you set your budget, you will know how much money you need to spend to get set for spring. There are loads of ways you can finance your renovations: dip into your savings (or the bank of mum and dad), take out a home equity loan, redraw from or refinance your current mortgage, use your credit card or take out a personal loan. Which option is right for you will depend on your individual circumstances, and what you want to achieve. That’s where we come in. Please get in touch with us on the details below and we will help you determine which option best suits your needs and serviceability. Once this is done, you are one step closer to calling in the builders and making your renovation dream a reality. Track your spending So you have made a budget, and you have organised the funds. Now, you need to stick to it. We suggest you use a simple spreadsheet to track your expenditure. Remember, your budget needs constant attention. Make sure you continually assess what has been spent on all aspects of the project. Using the spreadsheet will allow you to easily and quickly see when and where costs are starting to blow out – so you can jump on the front foot. Enjoy it The sun is out, you’re investing in your home or investment property, it’s an exciting time and we wish you well! Remember, good planning and sticking to your budget will help to make this an enjoyable and successful experience. If you’re planning to renovate or spruce up your home this spring, we can help with finance options! For more information, contact us today.

We hope you are out and about looking at properties in the fantastic spring weather! Yes, the busy spring property season is well underway – and there’s plenty of great housing stock available. If you’re in the market to buy right now, the good news is that APRA’s recent tightening of controls on investment lending seems to be having a positive effect on home price rises! At its October meeting, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at the record low rate of 2.0 per cent for the fifth month in a row. Market analysts are undecided about the RBA’s next rate move, with some predicting a further rate cut in 2015 and others speculating that there will be no more rate changes until late 2016 – both of which mean, of course, that buying conditions will remain good for quite some time for first home buyers, refinancers and property investors alike! APRA’s new controls have had some effect on interest rates, both for Owner Occupier loans and Property Investment loans. If you’re in the market to buy your first home, upgrade or refinance, you can now access some of the lowest interest rates ever on record as lenders continue to adjust rates downwards to encourage business growth in this area. For property investors, some home loan interest rates have risen slightly, but still remain excellent value and easily accessible to those with an adequate deposit and good financials. Auction numbers were down recently, because of various public holidays and major sporting events. Additionally, with market conditions starting to favour buyers a bit more, private treaty sales are becoming more popular and are reducing auction numbers in some states. Buyers are definitely out and about, however competition at auctions is not as fierce as it was during the autumn selling season – which was unusually busy because of very high interest from investors, particularly Chinese investors. The table below shows the relevant auction numbers for each state and corresponding clearance rates, for the week ending Sunday 4 October 2015: State Number of auctions Clearance rate Victoria 90 68% New South Wales 567 71% Queensland 118 64% South Australia 32 71% Western Australia 10 75% Northern Territory 4 33% ACT 20 54% Tasmania 4 50% As mentioned earlier, there has recently been indications that home value growth is starting to slow down – which will come as a big relief if you are in the market to buy a property, particularly in Sydney. In most markets, home value price movements were very marginal this month, with only Melbourne showing a significant increase of 2.42% over last month and 14.22% over the last year. Sydney showed a marked change in home value price growth, only increasing by a very marginal 0.06% this month, but still showing a rise of 16.72% over last year. Brisbane/Gold Coast home values rose by 0.83% last month and 4.88% over the previous year. Adelaide home values went down by 1.17% last month and 0.30% over last year. Perth was up by 0.50% last month but is still showing a fall in home values of 0.90% over the same time last year. Darwin is also showing declines in home values – down by 0.31% this month and 3.92% since last year. Hobart’s home values fell by 1.93% last month and 0.59% since last year. On the bright side, the Canberra market is starting to pick up again, showing a 1.00% increase over last month and a 0.59% increase since this time last year. With interest rates on the move and becoming more competitive, now is a great time to talk with us about a home loan health check to ensure you’re getting a competitive rate in today’s environment. We’re also very pleased to offer our assistance to those of you looking to build wealth for the future by investing in property. Remember, we’re here to help you with your financing needs according to your personal financial circumstances and goals, so please don’t hesitate to give us a call for a chat today. The information provided in this newsletter is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. Information sources: Auction results: www.realestate.com.au. Home values:www.corelogic.com.au Sincerely , Element Finance

Spring is here and we’re all looking forward to the busiest time of year in property markets around the country! If you’re planning on getting in on the action, we’re ready to find you a great deal on your financing – so whether you’re looking at refinancing your existing mortgage, buying a new home or planning to invest give us a call!

There has been a lot happening in our financial markets this month, with volatility in our share markets and interest rates on the move even though the Reserve Bank of Australia decided to keep the official cash rate on hold at 2.0 per cent during its September meeting.

APRA’s increased supervision on investment lending has caused a general rate adjustment for both owner-occupier home loans and property investment loans. While some lenders are raising the interest rates on their property investment loans by 20 – 50 basis points in line with APRA’s restrictions, they are simultaneously reducing their interest rates on owner-occupier loans by a similar margin.

This is great news if you’re a first home-buyer looking to get into the market this spring. It’s also great news if you’ve been considering refinancing an existing loan – you can now access some of the lowest rates on record and you could potentially save a lot of money on repayments. If you’re looking to invest, or refinance a property investment, we have identified lenders who are offering some great rates, so please give us a call.
Melbourne and Sydney property markets have remained hot throughout winter, whilst most other markets succumbed to the usual winter slow period. Things are now starting to pick up again with auction numbers starting to increase for the week ending August 30.

In Victoria there were 1185 scheduled auctions with a 78% clearance rate, while in NSW there were 1083 scheduled auctions with a 78% clearance rate. These auction figures really outstrip activity in other states. (However it should be noted that in areas outside our two major capital cities, many vendors prefer private sale over auctions).

In Queensland there was 159 auctions with a 58% clearance rate, South Australia offered 100 auctions with a 65% clearance rate, Western Australia 34 auctions with a 67% clearance rate, and Canberra had 47 auctions with a 68% clearance rate. Tasmania scheduled only 8 auctions and recorded a clearance rate of 75% and Northern Territory held just six auctions with no results.

Since last month, changes in home values have been marginal around the country. Sydney showed an increase in home values of 1.14% over last month and 17.55% over this time last year. Melbourne showed a marginal decrease over last month of 0.03% but was still up by 10.59% over this time last year. Brisbane and Gold Coast was up by 0.34% this month and 4.29% over this time last year.

Adelaide was up by 0.67% this month and 1.79% since last year, Perth is showing declines – 1.26% since last month and 1.79% over this time last year. Darwin was up marginally by 0.34% this month but is down by 4.57% over this time last year. Canberra seems to be trending downwards with a 1.69% decrease in home values this month and a decrease of 0.86% year on year. Hobart showed a fall in home prices of 1.13% this month, but was up 1.5% over this time last year.

If you’re excited about the property opportunities coming up this spring, and you should be, then we’d love to chat about your plans. We’re here to help you organise the most beneficial financing arrangements for your property purchasing needs according to your personal financial situation and goals. So please don’t hesitate to give us a call today.

Information sources: Auction results: www.realestate.com.au/auction-results
Home values: www.corelogic.com.au/research/monthly-indices.html

Sincerely, Element Finance

Over the past few months, there has been a lot of chatter in the media about APRA tightening controls on lending for investment property purchases. And as property investment is one of Australia’s most popular ways to build wealth for the future, it has understandably raised a lot of questions from our clients about how this will change the game for those currently looking to invest. But what is APRA actually doing and why? How will it affect your capacity to get an investment property loan if you’re looking to buy this spring?

What is APRA? 
First of all, we should explain APRA and the role it plays in the finance industry. APRA is the Australian Prudential Regulatory Authority and it acts as Australia’s finance industry watchdog. Their role is to regulate the behaviour of lenders, banks, credit unions, building societies, general insurance companies, private health insurance agencies and the superannuation industry. Their mission is to establish and enforce standards and practices to ensure that our financial industry remains stable, efficient and competitive.

APRA is concerned that the property market is becoming overheated, particularly in Sydney. This follows home price growth of over 18% in the Sydney market over the past year. APRA is concerned that an overheated market may be subject to rapid price adjustments and this could not only destabilize our entire financial industry, but prove to be extremely risky for the average residential property owner or investor.

What restrictions has APRA imposed?
APRA is primarily concerned about the rate at which the big four banks have been issuing property investment loans. In order to cut it back, they have done two things:

• Increased the capital reserves the big banks are required to hold for their exposure to residential property mortgages; and
• Enforced their requirement that the bank’s investment lending does not grow by more than 10% annually.

The result is that the big four banks have raised interest rates on property investment loans. They have also tightened their lending criteria, so that property investors may now require a larger deposit and must be in a financial position to meet their repayments in the event of significant interest rate rises in future. They are also discouraging interest only property investment loans as these are considered more risky in a property market that may be subject to rapid declines in home values.

How will this affect you if you’re looking to invest now?
First of all, let’s look at interest rates on property investment loans. While it’s true that some banks have raised interest rates on property investment loans, these rate rises only represent a 20 – 50 basis point rise, meaning that the increased interest rate on property investment loans is only a half a percent or so higher on average than most owner-occupier loans. When you take into consideration that interest rates were down to all-time historical lows anyway, this will not prove to be much of a deterrent to those of you looking to invest in property this spring.

Additionally, not all of the lenders are at risk of exceeding APRA’s requirement that investment lending does not grow by more than 10% annually. This means that many of the smaller lenders have not raised their interest rates on property investment loans very much – in fact, some of them have not raised their rates at all.

This is where it really pays to have a good mortgage broker on your team. If you are planning to purchase an investment property this spring then talk to us and we will shop around to find you the most advantageous rate!

What about the tighter lending criteria – how will this affect you?
If you are about to purchase an investment property, then the bank’s tightening of lending criteria may have some effect. It is likely that the amount you can borrow has recently been reduced by 10-15% for the same level of income. Additionally, the big four banks will most likely require a 20% deposit, whereas in the past they would have accepted 10%. (Some smaller lenders are still approving investment property loans with a 10% deposit, so if necessary ask us to shop around.)

The result is that your purchasing power may be reduced and if you want to invest this spring, you may have to look at purchasing a less expensive property. For most property investors, this will prove to be only a minor stumbling block – after all a 15% reduction in your buying power isn’t very much. You may have to work a little bit harder to find a suitable investment, but at the end of the day you will most likely be able to find something that suits your budget.

Good advice is now more valuable than ever
The fact is, it’s more important than ever to be able to get good advice about your loan structuring and a mortgage broker who is able to shop around amongst a wider variety of lenders to get you the best rate the market has to offer.

We’re happy to say that’s our job! Since the APRA restrictions have come into play, we have been able to help several clients find great financing options for their investment property purchases and lower rates for those looking to refinance. We’re confident that we can help you too. If you’re in the market to purchase a property this spring, then give us a call. We’re here to help.

Spring is finally here. But if you’re anything like us, you can’t wait for summer to arrive so that you can hit the beaches with family and friends for some swimming, surfing, boating and even sailing! To give you a taste of what’s in store, we’ll refresh your memory about some of Australia’s favourite beaches so you can start planning your escape!

Byron Bay, NSW
One of the most truly amazing beach destinations in NSW would have to be Byron Bay. It was once an undiscovered hippy community but these days, has blossomed into a hot tourist destination. Byron sports a series of beautiful, long stretches of typically uncrowded beach where you can surf, lie in the sand, snorkel or swim in absolute peace. There’s the nearby picturesque Byron Bay lighthouse to enjoy, plus some great eateries and cafés in the town itself. It makes a great get-away year round.

Noosa, QLD
There are literally so many gorgeous beaches in Queensland that it’s hard to choose just one or two. Noosa is the obvious choice, giving us a showcase of everything the spectacular Sunshine Coast has to offer. Nestled in a fantastic beachside resort, Noosa Main Beach is a patrolled beach that makes it perfect for families, swimming, sailing, and more. Right off the beach you can often see pods of dolphins and whales migrating up and down the coast. And on the shores, you can see Koalas and other wildlife easily accessible to passers by. Just a short walk away, Noosa Park headland is home to the Noosa Festival of Surfing every March.

Cottesloe Beach, WA
Located between the Perth central business district and the port of Fremantle in Perth’s western suburbs, this fantastic city beach is only 15 minutes from the city center and has to rival Bondi as one of our most popular city beaches. Offering clear sparkling waters and amazingly bright white sands, Cottesloe is the perfect place to watch the sun set over the Indian Ocean. It also has a reputation for some of the best seafood in the country… yum!

Wineglass Bay, TAS
One of Australia’s most beautiful beaches is the spectacular Wineglass Bay, which is located in Tassie’s amazing Freycinet National Park about three hour’s drive from Hobart. Considered one of the top ten beaches in the world, Wineglass Bay is a simply gorgeous curving stretch of sand that is contrasted against pink granite cliffs and sparkling turquoise waters. Fishing, sailing, sea kayaking and rock-climbing are all popular past times in Wineglass Bay, but we want to go there to just soak up the sun and spectacular scenery.

Casuarina Beach, NT
Darwin offers a host of lovely beachside destinations to choose from – which is a good thing in place with such hot and humid weather. Casuarina Beach is a popular choice, located on the doorstep of the northern suburbs, it’s just a short stroll to your choice of nature reserve and mangroves, or the City Mall where you can find ice cream, coffee shops and the wave pool. Another popular beachside destination is the Mindil Beach Market which kicks into life every year between May and October.

Apollo Bay, VIC
Surprisingly enough, Victoria has quite a few gorgeous beaches to choose from, but we’re picking Apollo Bay because it’s at located along the Great Ocean Road, a truly spectacular 90 minute drive from Melbourne. Apollo Bay beach itself is a lovely stretch of sand, but other attractions in the area will have you up and about, rather than lazing in the sun. Just up the road is the Twelve Apostles, a set of spectacular limestone pillars that rise up out of the Southern Ocean against the backdrop of the Port Campbell National Park – a sight not to be missed!

Glenelg Beach, SA
Glenelg is not just one of Australia’s best city beaches, it’s also a spectacular tourist destination offering fantastic shops, restaurants and bars at its gorgeous marina and jetty precinct. In fact, there’s an amazing choice of beaches just minutes from Adelaide’s city centre including Brighton Beach, West Beach, Henley Beach and more. Walk just 20 minutes north from Henley jetty and you’ll discover the Grange, complete with romantic coastal dunes and an historic jetty.

Getting ready to enjoy the spring and summer months may include an investment in a sailboat, speed boat or even a caravan to get you and the family out and about enjoying the spectacular lifestyle our fantastic country has to offer. Don’t forget that we’re here to help if you require financing for any personal assets – we do more than just home loans. It you want to make a purchase to help you make the most of our upcoming summer months, just give us a call!

What is pre-approval and what is subject to finance? Many first home buyers believe you don’t need pre-approval if you intend to use a subject to finance clause in the sales contract when you find a property to buy. But that’s not the case! In this article we explain why it’s a wise move to get pre-approval on your home loan and use a subject to finance clause as well if you can.

What does ‘pre-approval’ mean?
When you’ve saved your deposit and you’re ready to purchase your home, it’s a wise move to talk to us about getting pre-approval on your home loan. Pre-approval is where a lender confirms how much money they may be prepared to lend to you to purchase a home, based on the deposit you have saved, your income, expenses and your personal financial situation.

Getting pre-approval on your home loan is intended to give you clear guidance on how much money you can spend, so that it makes it easier for you to shop for a suitable home in your price bracket. It is important to remember that the amount you are pre-approved for is the maximum amount a lender believes that you can currently afford to borrow according to your personal circumstances.

If you intend to purchase a property at auction, it is important to get pre-approval on your home loan before you attend the auction so that you can be reasonably comfortable that you can borrow the required funds. Getting pre-approval will give you a bidding limit and help you to be reasonably sure that everything will go smoothly with the transaction.

It is important to note that even with pre-approval, a lender can still decline a loan application if they do not like the property you are looking to purchase. If they feel it is over-priced or something is wrong with the property, they will not approve your final loan application. However, getting pre-approval significantly reduces the risk of this occurring.

Additionally, some real estate agents and vendors will not take you seriously if you do not get pre-approval on your home loan before you approach them, particularly when you are buying off the plan or are considering building a new home. Remember, they are frequently approached by time-wasters and ‘tire-kickers’ – getting pre-approval will help them to realize you are a serious buyer.

Benefits

• Getting pre-approval is free and gives you considerable peace of mind, especially when bidding at an auction.
• Your pre-approved home loan is usually valid for up to three months.
• It helps you set your maximum spending limit – particularly important at an auction.
• It shows real estate agents and vendors that you are serious about purchasing a home.

What does ‘subject to finance’ mean?
When purchasing a property outside of an auction, the bank will always perform an independent valuation of the property to find out its current market value before agreeing to lend you the money you need to purchase it.

When you make an offer on a home, you will be required to make the offer in writing and this is called a sales contract. In this contract, you have the option to include a clause that says your offer is ‘subject to finance’. This means that your offer is conditional upon the lender approving the amount of finance you will need to purchase that particular property. If the lender does not approve the amount of financing required, you can withdraw your offer without losing your deposit or being any worse off.

You need to remember that property sellers and real estate agents are naturally out to get the maximum amount of money for a property that they possibly can. This can often mean that the asking price of a property exceeds its market value and also the amount of money a lender will allow you to borrow for that particular property.

It is important to note that a lender will only allow you to borrow what the valuation says the property is worth – even if you have been pre-approved to borrow more. That’s why it’s important to get pre-approval and use the subject to finance clause in your sales contract as well if you can! If the lender’s valuation turns out to be less than the asking price, you can always go back to the vendor and use the valuation to get a better deal.

Benefits

• You may think a property is a good price, but using a subject to finance clause in the sales contract gives you additional peace of mind that you’re not paying too much.
• Using the subject to finance clause gives you room to withdraw your offer if the asking price exceeds the lender’s valuation on the property.
• It can often help you to negotiate a better price if the lender’s valuation is lower than the asking price.

Things to consider

• Sometimes a real estate agent will look less favourably upon your offer if you use the subject to finance clause in the sales contract. Always remember to mention that your financing is pre-approved to help mitigate any negative view. 

Remember, if you have any questions about the property purchasing process, we’re here to help. We understand that getting you pre-approval on your home loan is important as it can save you a lot of time and hassle when searching for your new home. If you’re currently in the market for a new home, then please give us a call and we’ll help you get your pre-approval organised.

In March last year, an amendment was made to the Privacy Act 1988, which allowed regulation reforms to be applied to the way credit-related personal information can be collected about you by lenders. The new system is known as ‘Comprehensive Credit Reporting’ and has brought Australia in line with the rest of the world regarding the way consumers are assessed by lenders when applying for credit and home loans.

The new rules have now been in effect for over a year, and most lenders are using Comprehensive Credit Reporting as part of their day to day operations when assessing you for a loan. This article looks at how Comprehensive Credit Reporting affects you and your capacity to borrow.

How have things changed?
Previously, lenders were only allowed to access negative information about your credit history. By ‘negative’ we mean that they were only able to access information that indicated if you had any major credit infringements, credit payment defaults, bankruptcy situations and declined applications for credit. This information did not give lenders a very good picture about your current financial situation and was only of limited use when making assessments on major credit applications like home loans.

Comprehensive Credit Reporting is designed to give lenders enough information about you to assess if you can afford to take on more debt and how much you can afford to repay. Lenders now have access to more data about you more often, which gives them a better picture of your current personal financial situation.

Information that credit providers can collect about you now includes account information including when an account was opened and closed, your credit limits on credit cards and loans, the type of credit accounts you hold (such as credit card or personal loan), as well as 24 months repayment history on any credit accounts you hold. They can also check on your overdue debts and payment defaults, the number of recent credit applications you have made recently and any publicly available information such as personal insolvency information, court writs, court judgements and directorship information.

What does this mean for you?
The new Comprehensive Credit Reporting system gives you more power to demonstrate your creditworthiness to mortgage lenders and other credit providers. It allows your recent good credit behavior to be taken into consideration and any adverse financial events to be overcome more quickly. It is also faster and easier for you to establish a credit history and compile a Credit Report.

On the downside, it is more important than ever before that you pay your bills on time. It is also important that you avoid making multiple credit applications before you decide on your credit provider as these will show up as minor defaults. If you’re not careful, you could accumulate a lot of minor defaults that could add up to make it appear as though you are under financial stress – and that may make it more difficult for you to get a home loan approved or make you ineligible for the lowest interest rates.

Make sure your Credit Report is accurate
Your Credit Report is compiled by a credit agency and is made available to lenders when you apply for a loan. Understanding your Credit Report and making sure it is correct can help to ensure your loan application goes smoothly.

Lenders will use your Credit Report to assess risk before they decide to give you a loan. We recommend that you obtain a copy of your Credit Report and make sure that is completely accurate. You can download a copy of your Credit Report once every 12 months for free from a variety of different credit reporting agencies – we recommend Veda or Dun & Bradstreet.

Once you have your Credit Report, you can address any negative information that should not be on there and take action to have it removed. Occasionally, your Credit Report can contain information that is very old, untrue or contain fraudulent entries that simply belong to someone else – so it pays to give it careful attention before you apply for any loans.

If you obtain your Credit Report and discover you have a low credit score, you can improve the situation over time with the right behavior:

• Take action to remove any incorrect entries.
• Always pay your bills on time or before the due date.
• Pay down your existing debts.
• Keep unused bank accounts open.
• Reduce your credit limits – cancel any credit cards you don’t need.
• Don’t make multiple applications when you are shopping for credit – talk to us about choosing the correct provider before you submit any loan applications.

Comprehensive Credit Reporting is good for Australian consumers as it helps lenders to be fair when assessing you for a loan. If you would like to discuss your Credit Report with us, we’re happy to help. Remember, we’re here to help you get the best deal available for your personal financial situation and goals for your mortgage and other financing requirements, and your Credit Report is an important part of the application process. Please give us a call today for a chat.

As we head into spring and Australian share markets experience some volatility following falls on the Chinese stock market last week, the Reserve Bank of Australia has decided to keep the official cash rate on hold at 2.0 per cent during its September meeting today.
Most analysts were expecting rates to stay on hold due to the RBA’s comments after its August meeting, indicating that it would look to maintain the status quo. However there is considerable speculation that further rate cuts may be on the cards this year, possibly in October or November.
Rate cuts in February and May this year have already brought interest rates to all-time lows. This has stimulated rapid price growth in property markets, particularly in Sydney and Melbourne, causing the RBA to be reluctant to cut rates further right now.
However, global market activity is causing an upward effect on the Australian dollar, further compromising our export markets. And despite encouraging improvements to employment figures, economic growth has been slower than expected and analysts agree that if these trends continue the RBA will have no choice other than to cut rates again.
Since the recent APRA tightening of lending rules surrounding property investment loans, there has been a great deal of activity on interest rates, both for owner-occupier and investment loans. This has stimulated lenders to come out with some very competitive rates, with great deals available across the board. To find out more, please get in touch. When interest rates are changing, it’s a great time for a home loan health check, so do give us a call today.
Source: www.rba.gov.au

Element Finance has had a long and involved history with Kiva – loans that change lives.

Kiva are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.

So far to date, Element Finance Fremantle have had the privilege of helping over 500 hundred individual entrepreneurs build their own businesses and their way out of poverty. We really want to increase our involvement over the coming months and so we have made a pledge – for every new loan Element Finance settles, we will fund a brand new Kiva loan in that borrower’s honor. As an Element Finance client, YOU will be a borrower and a lender!

By joining us in our pledge, you will be helping us give as many as 250 deserving entrepreneur the leg-up they need every single year. This is truly exciting for us and we are looking forward to keeping you updated as we continue our journey with Kiva.

You may want to get involved with Kiva individually and we would encourage you to do that. You can find out additional information at http://www.kiva.org/team/element_finance

Buying a home is a very exciting time – particularly if you’re climbing on to the property ladder for the first time! When you finally get your deposit together, it’s really easy to get caught up in the moment and forget to budget for the other costs associated with buying your home, so here’s a quick checklist of things to include when planning your finances for your big move.

The cost of taking out your home loan
When you take out a home loan, you’ll need to budget for the extra costs involved with getting it set up with the lender. These costs will vary from loan to loan and lender to lender, depending on your personal financial situation and the type of loan you take out. As your mortgage experts, we will advise you on these costs and help you to plan your budget. Generally speaking, these extra costs may include:

Home loan application fees: most lenders charge a home loan application fee to cover the costs of legal contracts, property title checks and credit checks.

Mortgage establishment fees: in addition to the application fees, most lenders also usually charge an extra fee to cover the costs of setting up the mortgage in their banking systems.

Property valuation: before they can grant you a mortgage, your lender will need to get an independent valuation of your property – both the land and the buildings and improvements. It is important to note that the lender will not accept your valuation – even if you have paid an independent valuations expert to produce it for you.

Mortgage registration fees: all mortgages must be registered with the government and a registration fee will apply. Ask us to help you calculate how much this will cost for your particular property.

Lenders Mortgage Insurance: if your deposit amounts to less than 20% of the purchase price of your property, you will be required to take out Lenders Mortgage Insurance by law. It is important to note that this insurance is for the lender in case you default on your loan – it does not cover you in the event you cannot make your repayments.

Costs involved with purchasing a property
Purchasing a property can be quite a complicated process and it is easy to forget to budget for the costs of covering all the details involved. If you’ve located the property of your dreams, here’s what you need to cover off to make it yours:

Building inspection fees: if you decide a particular property might be the right one for you, it pays to do proper research on it by obtaining a building inspection report and a pest inspection report. These will give you an accurate picture of the condition of the property and help you assess the likely costs of maintaining it moving forward. These reports are very important to your purchasing decision, so get them organized early on in the buying process.

Government fees: before a property can become yours, you’ll have some government fees to pay like Stamp Duty and Registration of Title/Land Transfer Fee. Depending on where you live, and your personal eligibility for any concessions, the amount you may have to pay will vary. Talk to us and we will help you work out your costs in this area.

Legal fees: each property purchase requires the legal transfer of ownership of the property to you and for this you will need to employ the services of a Solicitor or Conveyancer. If you don’t have one lined up, let us know and we will give you a referral to a reputable legal adviser.

Home & Contents Insurance: your new home will be your most valuable asset and it’s very important that you organise the appropriate insurance cover to protect you against disasters like fires, floods and theft. The building insurance section of your cover needs to be taken out when you put down your deposit to make sure you are covered while the transaction is going through.

Mortgage/Income Protection Insurance: we recommend that you also budget for an insurance product that will cover your mortgage repayments in the event you are unable to work due to sickness, injury or some other unforeseeable event that causes you to lose your income. We can help you plan for your insurance needs and obtain cost-effective cover that’s right for you.

The costs of moving in
When the big day arrives and it’s time to move in and start enjoying your new home, things will run much more smoothly if you plan ahead for the associated costs. Of course, these will vary widely from person to person and home to home, so planning will very much depend on the property you buy. Here’s some things you’ll need to budget for:

Utility costs: setting up your gas, water and electricity supply may require you to pay a deposit. Plan ahead and talk to your suppliers about the costs and getting things operational on the day you move in. Remember, you can talk to several different suppliers to get a more competitive rate.

Body corporate fees:  if you are buying an apartment or a strata title property, it is likely that you will have to pay monthly body corporate fees. We recommend that you check out these fees when you are planning to buy your property as they can be quite significant, particularly if the property is in need of a lot of maintenance or repair. The first month’s fees will be due as soon as you have settled on the property.

Council rates: these rates cover the costs of your garbage collection and other services provided by your local council. The cost involved will vary depending on the value of your property so you should check with the council to determine these costs and budget accordingly.

Ongoing maintenance: all homes require ongoing maintenance and you should remember to budget for any eventuality. When you rent, your landlord pays for anything that goes wrong, so if the hot water stops working they replace it. If something goes wrong in your own home, you have to fix it yourself so it’s wise to set aside a little money for emergencies.

Moving costs: depending on where you live it could be quite expensive to organise a mover to get your things to your new home. We recommend that you get quotes from three reputable carriers and be sure to ask them to include insurance costs in their quotes.

Getting your home set up: this is the fun part! Remember that when you move in, you’ll need furniture and a full pantry. Make an allowance in your budget for the things you’ll need to get set up in your new home and really enjoy the fact that it is now yours!

Remember, as your mortgage experts, we’re here to help you with organizing the finances for your new home. We’re happy to help you with every aspect of buying your new home, from confirming the costs and helping you work out your budget, to planning your insurance needs and we’ll even give you referrals to other reliable professionals you may need to consult. And of course, it is our job to shop around to find you exactly the right loan for your personal financial situation and goals, so please give us a call today.

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If you’ve only taken out your home loan in the last few years, refinancing is probably the last thing on your mind. But having a set-and-forget attitude to your home loan is not ideal! Leaving your home loan unchanged for its entire term could mean you miss out on substantial savings, or opportunities to make your money work harder for you to build wealth for your future. In this article, we look at the top 5 reasons why you might want to consider refinancing your home loan.

1. To pay less on your mortgage repayments
Refinancing can often reduce the amount of your mortgage repayments – and this is probably the number one reason why people consider refinancing. Everyone would like to save money on their home loan repayments – since they usually account for around 30% of our income every month.

If you’ve had your home loan for a while and interest rates have fallen, you could access a better rate and this will reduce the amount you have to pay for each mortgage repayment. Even if interest rates have not fallen since you first took out your loan, you can sometimes access a better rate if your personal financial situation has improved in that time.

Accessing a better rate can not only reduce your home loan repayments, just a slight drop in interest rates could potentially save you thousands of dollars over the life of your loan.

Refinancing could also help you to reduce your mortgage repayments if you extend the life of your home loan. For example: Say you have been paying off your home loan for ten or fifteen years. You could potentially refinance the outstanding amount over a 30 year term, thereby substantially reducing your monthly repayment amount.

2. To extend or remodel your home
If your family is growing and you need a few more bedrooms or a bit of extra space, buying a bigger house is not always the ideal solution. Many people refinance their home loan to access funds to extend and remodel their existing home, rather than go through all the upheaval of moving.

Renovating, remodeling and extending is a great way to get the home you want. What’s more, it can potentially increase your home’s value at the same time. So even though you may be taking out some of the equity you have in your home to do the extensions, the resulting increase in value of the home could potentially increase your equity again and help you to recoup some of the costs.

3. To consolidate debts
We often talk about the difference between types of debt. A home loan is a ‘good’ type of debt because it carries a relatively low interest rate and can be used to build wealth. Other types of debt can be ‘bad’ because very high interest rates can trap you into continually paying interest instead of paying off your debt. These debts are usually things like credit cards – which can often carry an interest rate of 20% pa or more, car loans, store credit and so on.

Refinancing could allow you to access funds to pay off these expensive debts once and for all. By rolling all your debts into your home loan, you will be paying them off at a lower interest rate. You could also save yourself money every month on interest payments, simplify your situation by only having one payment to make, and beat the interest trap of credit cards and other expensive forms of credit.

4. To access the equity for other purposes
The equity you build up in your property is a valuable asset. We mentioned earlier that a mortgage is a ‘good’ form of debt because it can be used to help build wealth for your future. That’s because your equity increases as you pay down your mortgage and property values go up – and this can potentially give you access to funds you would not have had if you did not have a mortgage.

That means your mortgage really can be used to facilitate your lifestyle and build wealth for your future. By refinancing, you could access your equity and use the funds for a deposit on a property investment, to invest in stocks and shares, education costs, to support your children in purchasing their own home or for a wide variety of other reasons.

5. To fix your interest rate or switch to a different mortgage product
Switching to a fixed interest rate loan, (or a different type of loan that offers additional benefits) is another popular reason for refinancing a mortgage.  As time goes by, your needs change and it could be that another mortgage product like a fixed interest rate loan would be more beneficial for you.

The number one benefit of a fixed interest rate mortgage is that your mortgage repayments will remain the same for the length of the fixed term – usually 1, 3 or 5 years. This gives you more peace of mind because it makes it much easier to plan your budget.

Many people think that switching to a fixed interest rate mortgage will save them from future interest rate rises. And whilst this is true to a certain extent, fixed interest rate mortgages are often a bit more expensive to start with than your standard variable rate home loan, so interest rates would probably need to rise considerably before you came out in front.

There are also many other mortgage products on the market that may have more beneficial features than the home loan you have now. For example, redraw facilities or a mortgage offset account. If your current home loan simply doesn’t offer you the flexibility you need, then by all means talk to us about some alternatives.

Talk to us now about your annual home-loan-health-check
About this time every year, we like to encourage you to talk to us about a home-loan-health check.

A frequent home-loan-health-check is necessary to ensure that your current home loan is still the best home loan product available for you. We recommend that you have a chat with us at least once a year to see if the lending environment has changed or refinancing may be beneficial for you in some other way.

If you’d like to organise your home-loan-health-check, just give us a call. We’re here to help you assess your home loan’s performance and ensure that it is still the right mortgage product for your personal financial circumstances and goals now and into the future.

Winter is usually the quiet period for property market news, but with the recent tightening of controls on investment lending by the Australian Prudential Regulatory Authority (APRA), there has been a lot happening, particularly with interest rates.

Even though the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 2.0 per cent during its August meeting, interest rates have been on the move. Due to APRA’s increased supervision on investment lending, the big 4 banks have all raised their interest rates on investment loans. We expect that many other lenders will also be raising rates on investment lending in the coming weeks, with rises varying between 25 and 50 basis points, depending on the lender.

Whilst property investment interest rates have been going up, many lenders have also moved to shave a few basis points from interest rates on owner-occupier loans, so interest rates on many of these loan products are coming down! And that means we’re still looking at some of the lowest interest rates in history overall.

This news does not seem to have had much effect on our property markets. Activity is still quite high for this time of year. For the week ending August 2, there were 787 auctions recorded in Victoria with a clearance rate of 78%. In NSW there were 825 auctions with a clearance rate of 76%. Queensland held 144 auctions with a clearance rate of 58%, and South Australia 75 auctions with a clearance rate of 68%.

Other states showed less activity, with Western Australia holding 23 auctions with a clearance rate of 40%, Northern Territory 13 auctions with a clearance rate of just 17%, Canberra 41 auctions with a clearance rate of 72% and Tasmania only 8 auctions with a 43% clearance rate.

Home values showed increases for most of our capital cities. Sydney home values were up by 3.30 % over last month and up by 18.35 % over this time last year. Melbourne is also doing very well, with home values rising by 4.91 % over the last month and 11.48 % over this time last year. Brisbane/Gold Coast also showed increases, with home values rising by 0.43% over last month and 4.36% over this time last year. Canberra showed an increase of 0.29 % month on month and 1.21% over this time last year and Hobart was also up by 1.06% this month and 2.51% over this time last year.

In other states home value movement was not as strong. Adelaide’s home values decreased by 1.13% this month, but they are still up by 3.40% over this time last year. Perth’s home values didn’t show much movement – they rose by 0.09% this month but are down by 0.27% over this time last year. Darwin showed an increase of 0.39% this month but are down by 5.25% over this time last year.

With lenders moving to adjust interest rates on both investment and owner-occupier loans, you may want to talk to us to find out how these changes may affect you. If you already have a home loan or property investment portfolio, we can work together to give your loans a health-check to see if they are still the best financial products available for you. We’re here to help you organise the most beneficial financing arrangements for your property purchasing needs according to your personal financial situation and goals. So please don’t hesitate to give us a call – we’re always happy to help.

The information provided in this newsletter is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs. Information sources: Auction results: www.realestate.com.au. Home values:www.corelogic.com.au

With interest rates at all-time record lows, property has recently become very attractive to a wider range of investors. The media is full of articles and commentaries talking about using property to help fund retirement, with many even talking about it as a means to completely replace an employment income so they can quit work early.

Whilst property investment has a proven track record as being a comparatively safe way to build wealth for the future, is it really possible to use property as a means of finding financial freedom and funding your retirement? And if so, how do you go about it?

Here’s an outline of two commonly used property investment plans:

Plan A – Living off the rental income
Many people create an investment property portfolio with the notion that one day, the properties will be all paid off and they will be able to live on the rental income. But if you are planning to fund your retirement this way, you’ll need to take into consideration that this rental income will be subject to income tax and some of it will also be required for property management, maintenance, insurance and rates. In other words, a sizeable chunk of the income your properties produce – around 50 – 60% – will be used up before you can allow for your living expenses.

In theory, it ought to be possible to create a property investment portfolio large enough to cover all these expenses if you start soon enough and plan carefully from the outset. How much income you will need is up to you. Considering you will lose at least 50% of the income to tax and expenses, then if you want an after tax income of $100,000 you will need to plan to have a portfolio of properties that is generating at least $200,000 a year.

Plan B – Living off the equity
Many property investors take the approach that paying off the loan completely is not ideal. Instead, they simply reduce the loan to value ratio as far as they can and then fund their retirement living expenses by borrowing against the equity if and when they need it.

Acquiring funds this way does not attract income tax*, which is one of the main benefits of this plan. However it should be noted that every time you withdraw some of your equity, the repayment amount and interest due on your loans will rise.

As long as your properties continue to experience capital growth and the rental income keeps pace with the rises in your repayments, this plan may seem like an endless cash machine. But if market conditions create a situation where both rents and property values fall dramatically, you may find yourself in a position where your equity declines so much that you can’t borrow any more money, or you may need to start selling off your properties in order to meet your repayment commitments – which may not be ideal.

Of course, selling off your properties to fund your retirement is also a possibility. However, you will need to take into consideration capital gains tax and carefully plan ahead to ensure you have generated sufficient potential funds to meet your needs.

Get professional advice before you start
The truth is that using property to fund your retirement is not as simple as it sounds – there are many variables involved. But one thing is for sure, if you want to use property to gain financial freedom in the future, then you need to have a plan. And the sooner you start to implement your plan, the more likely it is that you will achieve your goal of funding your retirement with property.

Before you take the plunge and start buying up investment properties, it is very important that you get some expert advice to help you formulate an investment plan that is right for you. If you want to be a successful property investor, then it pays to have a team of professionals who can advise you along the way and help you to avoid making costly errors. This team might include a financial planner, tax specialist, property manager and certainly us – a reliable team of mortgage experts.

If you’re thinking of using investment properties to build wealth and perhaps, fund an early retirement, then give us a call now. We can not only help you with the right financing, we can also refer you to some of the experts you will need to create your team of professionals and formulate a firm plan for success. So please give us a call today!

*This article does not constitute tax advice. The information contained in this article is general in nature and does not take into account your personal situation. Tax issues relating to property investment can be complicated and you should always consult an accountant or qualified tax adviser. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.

Some of you may have heard that APRA has cracked down on investment lending, influencing many lending institutions to review their investment lending policies.

But we imagine for the majority of you, it’s a case of “APRA, who?”.

In short, APRA are making some changes to investment loans, and we thought you would like to know if and how these changes impact you. In this article, we take a look at APRA and what they’re doing to keep borrowing conditions stable for you as an investor.

What is APRA?
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the Australian financial services industry. Their role is to regulate the behaviour of lenders, banks, credit unions, building societies, general insurance companies, private health insurance agencies, and the superannuation industry.

APRA plays a critical role in protecting you, and the financial well-being of the Australian community, by upholding standards of trade in the financial industry. Their mission is to establish and enforce standards and practices designed to ensure that under all reasonable circumstances, financial promises made by institutions are met and that our financial industry remains stable, efficient and competitive. As a consumer, APRA’s activities ensure that you have a reliable, fair financial industry and you can go about your day to day transactions and investments with confidence.

What are APRA’s new measures regarding property investment lending?
In December 2014, APRA wrote to all deposit-taking institutions (such as banks and other lenders) setting out sound lending standards, particularly for investment lending, that included a benchmark for the 10% maximum growth of residential investment mortgages. This occurred because of concerns over the number of people entering the property investment market and the stability of lending for this market considering current economic conditions.

Their particular focus is on restricting high loan-to-value and high loan-to-income lending, which may be risky for consumers if there should be a rapid or sudden decline in housing values or the property market in general. They also perceive the rapid growth in property investment lending as risky insofar as Australian consumers may be ‘placing all their eggs in one basket’ and they would prefer to encourage investment diversity amongst consumers.

By taking these measures, APRA is looking to make property market conditions safer for you as a consumer. By slowing down investment lending, APRA is also looking to slow down the rapid growth in property prices, particularly in Melbourne and Sydney where property prices are considered to be overheated by many property market analysts.

What does this mean for property investment borrowing?
Many lenders and financial institutions are changing their criteria for property investment lending in order to meet APRA’s requirements. Most major banks have announced that they will be cutting the discounts available on investment loans, which means that interest rates on new investment loans could be slightly higher than interest rates on owner-occupied home loans.

Additionally, most lenders have tightened up their criteria for investment borrowing. Many are focusing on loan-to-value ratios, meaning you may require a larger deposit than previously and may find it more difficult to leverage properties or access equity to invest further if you are already an investor.

Can I still get a property investment loan?
As your professional mortgage broker, your financial well-being has always been our number one concern. One of our primary responsibilities has always been to assess your personal financial situation and goals, and ensure that any loan we offer to you suits you, your financial goals, and your expenses.

Before applying for a loan for you, we always take into consideration whether or not you would be able to service your loan in the event that interest rates should rise and recommend insurance products such as mortgage protection insurance and income protection insurance to mitigate the risk of you not being able to meet your loan repayments if faced with a hardship situation.

Plenty of lenders are still offering property investment loans to borrowers who qualify under their new property investment lending criteria. It is likely that you will still be eligible for a loan and if you are looking to use property investment as a means to build wealth for your future, you should talk to us about your plans and investment goals sooner rather than later.

We’re here to help you work out if property investment is right for you. We have access to a wide variety of lenders and we’ll shop around amongst them to find you the most favourable loan considering your personal financial circumstances and investment goals. Call us today.

For more information on APRA, please visit their website, or speak to us.

Property investment has always been popular in Australia. However, like all forms of investment, there are loads of variables involved and it’s easy to make expensive mistakes. Building wealth through property investment can be a lot of work – particularly if you’re new to property investment and are not aware of exactly what’s required. In this article, we outline some of the common mistakes made by first time property investors so you can plan ahead to avoid them.

Not doing your homework
Many people make the mistake of buying a property simply because they like it, or think it is a bargain. But not every property makes a good investment. When you find a property that you might like to purchase, it is very important that you do your research to ensure it will give you the return on your investment that you will need. Ask yourself these questions, and importantly, take the time to research the answers carefully:

• Will it be easy to find tenants/will the property be in high demand?
• What rental income can I expect?
• Does the property have strong capital growth potential? Is it in a growth suburb?
• Am I paying the right price? How long will I have to hold the property before I can make a profit by selling it?

Not factoring in all of the costs
Cash-flow is a very important factor when you plan to invest in property – and it’s the area where many first-time investors come undone. It’s not only important to factor in all the costs of buying the property, you must also factor in all the costs of running the investment and maintaining it from the outset.

When you research the rental income you can expect from a property, you will first need to know exactly how much rental income you will need to cover the costs of holding it. The actual costs will vary from property to property – if you purchase a new home, for example, you will not need to factor in much by way of maintenance costs at first. But if you purchase an older property, you will need to make an estimate of what work is going to be needed and when, and how much this will cost and factor that into the budget.

Ask yourself these questions:
• Will the rental income be enough to cover the costs of a property manager, advertising for tenants, regular general maintenance, council rates, building insurance and landlord’s insurance?
• How will I cover the costs of large repairs – say if the hot water system needs replacing quickly?
• How will I cover the costs when the property is untenanted and there is no rental income? How long is the average vacancy time in this area? How long will I have to budget for?

Not getting the property management right
A property manager is the liaison between you as the landlord, and your tenant. First time investors often believe that managing their own property will save them money. However, it should be remembered that your property management costs are usually tax deductible and few people have the skills to not only find tenants quickly, but choose the right ones.

Property managers find your tenants, vet them by performing credit checks and then collect the rent every month. They deal with tenant requests, organise regular maintenance and pursue action when disputes arise. They keep track of rents in your area and make sure your rent keeps pace with the market.

In short, a good property manager will help you maximise the return on your investment and save you from many sleepless nights. However, some property managers are better than others, and fees vary. You should carefully research your property manager before engaging them – ask around, check references and make sure they have the resources to do a good job. If you need help with this, ask us for a referral.

Not talking to a tax professional
Did you know that you should obtain a depreciation schedule as soon as you purchase the investment property, preferably at settlement? Not many people do. It’s a document that helps your accountant determine how much you can claim back on tax each year.

One of the major mistakes people make with investment property is not planning ahead to make the most of their tax deductions. In order to ensure you understand what you can and cannot claim, you need to talk to a tax professional and/or accountant early on in the process. Getting it right will help to ensure you come out ahead and enjoy substantial savings. Getting it wrong will cost you money you may never get back. We have many expert contacts in this area so if you need a quality referral to an accountant, please get in touch.

Getting the finance wrong
Before you commence your property investment journey, it is wise to make a plan about what you want to achieve – your financial goals for the future. We recommend you sit down and talk to us about getting the right financing to achieve these goals. Taking a haphazard approach to financing your first, and then subsequent investments, could cost you more money, limit the amount of investment properties you can acquire and even be a recipe for disaster if something goes wrong.

We can’t stress enough how important it is to formulate a plan before you begin, and talk to us about your financing before you even consider making a property purchase. We will help you set up the financing arrangement that is most advantageous to you – considering your goals and your personal financial circumstances.

If you’re thinking about making a property investment, why not talk to us? We are happy to take the time to discuss your plans, get you pre-approval for your financing and introduce you to a team of other professionals who can help you to avoid these expensive mistakes above! Give us a call – we’re here to help.

Happy New Financial Year! We hope that tax time is not proving to be too tedious for you and you’re looking forward to getting a great tax refund this year. We’ve had loads of refinance and investment related queries lately, so this month’s newsletter is focused on property investment.

First, let’s start with the interest rate situation. At its July meeting, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 2.0 per cent. This decision was widely expected by analysts and we should be able to look forward to stable interest rates for the remainder of the year. However, the situation in Greece is affecting global markets and we will have to wait and see how this influences the RBA with regard to our monetary policy moving forward.

Winter is here and property markets around the country have slowed as a result. Even the Melbourne and Sydney markets are showing significantly reduced auction numbers. However, the combined capital city clearance rate was still 78.1 per cent, which was the strongest result since the beginning of June, showing us that property buyers are still in the market and activity is still quite high for this time of year.

Around the country, there were only 1,273 reported auctions last week, mostly due to the winter weather in southern/eastern states and school holidays. This compares to 2,249 auctions the week prior, so you can see how much market activity has slowed.

Sydney held the highest number of auctions at 566 recorded results, with a clearance rate of 84.5 per cent which is very high. Melbourne followed with 527 auctions with a clearance rate of 76.7 per cent. The next highest number of auctions was Brisbane which held 74 auctions with a clearance rate of 68.9 per cent, then Adelaide with 57 auctions and a clearance rate of 75.4 per cent. Perth held just 20 auctions with a clearance rate of 20 per cent. Canberra held 57 auctions with a clearance rate of 75 per cent.

Home values are up across the board for all capital cities, except for Perth and Darwin. Sydney home values were up by 2.75 per cent over last month and up by 16.23 per cent over this time last year. Melbourne is also doing very well, with home values rising by 2.92 per cent over the last month and 10.24 per cent over this time last year.

As expected, growth in other markets has been slower, but quite steady in most cases. Brisbane/Gold Coast home values were up by 1.76 per cent for the month and 3.51 per cent for the year. Adelaide was up by 0.39 per cent for the month and 4.46 per cent for the year. Canberra home values were up by 0.58 per cent for the month and 2.44 per cent for the year and Hobart home values were up by 1.79 per cent for the month and 0.85 per cent for the year.

Perth’s home values were down by 0.35 per cent for the month and 0.86 per cent for the year and Darwin showed a decline in home values of 3.93 per cent for the month and 2.93 per cent for the year. Reference CoreLogic.

Auction number projections are showing that property market activity should increase again after the school holiday period has ended. So if you’re in the market to purchase a property, now is a good time to talk to us. The start of the new financial year is also a great time to get your annual home-loan-health-check, so please give us a call today.

Your home loan is the biggest financial commitment you’ll ever make and taking the time to ensure you can always meet your repayments – no matter what – is very important to your future financial security, your lifestyle and your family too! In this article we take a look at mortgage protection insurance to see if it could be the right option for you.

What is mortgage protection insurance?
Your mortgage is a commitment that won’t wait for anything – you always need to make those repayments no matter what happens. The consequences of not being able to meet your repayments can be quite severe, including the bank foreclosing on your home loan and selling your property to recoup the debt.

Mortgage protection insurance – sometimes called loan protection insurance – is a policy that you can take out in order to protect your capacity to make your mortgage repayments. Policies can usually be arranged to cover your mortgage repayments in the event you lose your job, or suffer a serious illness, injury or even death.

How is mortgage protection insurance different to LMI?
Mortgage protection insurance is very different from Lenders Mortgage Insurance (LMI). LMI is designed to cover your lender (the institute providing your loan) – not you. In the event that you cannot make your repayments and the lender needs to foreclose on your loan, LMI covers the lender for any losses they may make when the property is eventually sold. Even though your lender may require you to take out LMI as a condition of granting your loan, it is important to note that LMI does not cover you if you cannot make your home loan repayments for any reason.

Do I really need mortgage protection insurance? Is it just another expense?
It is important that you think about how you would meet your loan repayments if something should go wrong. Some people have income protection insurance that covers their income in the event they cannot work for a while or lose their job.  This is fine as long as it will be enough to cover both your living expenses as well as your loan repayments – but it doesn’t necessarily cover serious illnesses, permanent disability or death.

Others may have a life insurance policy which could pay out a lump sum in the event of death or permanent injury or disability. However, life insurance policies do not cover you for eventualities like unemployment or less serious illnesses.

It is important that you have insurance cover for every eventuality. And it’s also important to make sure that you’re not under-insured. We recommend that you give yourself an insurance health check to be sure that any insurance you have will be enough to cover your loan repayments and other expenses, no matter what happens.

We can help you to assess whether or not your existing insurance is enough to cover your loan repayments as well as your living expenses. This is not only important in terms of making your home loan repayments, it could be very important to the well-being of your family as well.

It is also important to note that in some instances, mortgage protection insurance may be tax deductible, particularly if you’re taking it out for an investment property. You should check with your accountant to see if you can claim mortgage protection insurance as a tax deductible expense.

How do I organise cover?
Talking about your financial situation and commitments is part of the process we undertake when helping you to apply for a home loan, so going one step further to help you assess your insurance requirements at the same time is easy. We have a reliable, cost-effective insurance partner, so we can also help you to organise an affordable mortgage protection insurance policy if you need one.

Simply discuss your situation with us and we will organise a free quote that is tailored to your requirements, or refer you to one of our partners.

Remember, as your local Fremantle mortgage broker, we’re here to help you get the home loan that’s right for your requirements and suited to your personal financial situation. Making sure you have adequate insurance cover for your needs at the same time you take out your home loan is part of our service. We genuinely care about your financial future and your well-being, so please don’t hesitate to talk to us about your insurance requirements today.

Our ongoing growth has created an exciting opportunity for the right person. Element Finance are on the look out for a gun Admin and Personal Assistant for our Fremantle office. If you know someone with experience and interest in property and finance who would enjoy a fun, challenging and high-energy role then point them this way now! http://www.seek.com.au/Job/28905728

With interest rates at historical lows, property investment is rapidly becoming one of the most popular ways to build wealth to secure your financial future. But how do you find a property in a location that will give you good capital growth and help to ensure the investment is a success? In this article, we take a look at what makes a good investment location – both for residential and commercial properties – and how to find one.

Location, location, location!
Choosing the right location is one of the most important factors in the success of a property investment. The right location can differ according to the kind of property investment you choose – commercial or residential. However, in both cases, the principal is to find a property that will be popular with tenants both now and into the future, as this will support your requirement both for a steady rental income and future capital growth.

What to look for in a commercial property location
With commercial property, you will need to assess the purpose of the property and if the location will be good for that particular business. Retail commercial property should be in a location that provides a steady stream of passing trade and is easy to reach via public transport or car. There should be plenty of car parking available and if possible, the location should already be enjoying good trade. Locations that are busy will create competition amongst potential tenants and this will always be good for capital growth.

For more industrial commercial properties, good road links and parking, ample space and excellent facilities are more important than passing foot traffic. You’ll need to ensure that the purpose or possible uses of the building are acceptable under local council zoning laws so that there is no restrictions on the type of tenants who may use it. Importantly, you’ll want to make sure the property is not too far away from a city or port – particularly if it is a warehouse or manufacturing building.

What to look for in a residential property location
You may think that it will be easier to find a suitable location for a residential property investment, however competition for good locations is on the rise. With residential property, you’ll also need to find a location that provides all the attributes a tenant will be looking for – just like with commercial properties, however their requirements will differ.

Apartment living is rising in popularity, particularly for working people with no families. If you’re choosing an apartment, make sure it has good public transport facilities, is close to amenities such as restaurants, shopping and entertainment.

Houses are more popular with families, and for an investment like this facilities such as parks, schools, and easy access to public transport are important. Suburbs that are already popular with tenants because of the quality and easy access to such facilities may be in short supply and therefore expensive, so look at adjoining locations that may be up and coming.

For both apartments and houses, the availability of work nearby for tenants will help to ensure its popularity with tenants and this adds up to capital growth potential. Properties that are a long way from employment may be less expensive and easier to secure, however rental returns may be much lower and the potential for capital growth reduced.

How to find the right location
All property investment requires careful research to find the best locations with optimal capital growth potential. Most people start with online research and by making contacts within reliable real estate agencies so they are alerted when investments with potential become available.

The first step is to look for areas where income levels are high and occupancy rates are good. Real estate agents and reputable buyer’s agents are a reliable source of this information, but it’s also a good idea to subscribe to a property market data service that will give you the information you need at your fingertips. (We can put you in touch with a reliable service, so just ask us.)

Try to avoid areas where future oversupply of properties may become an issue. This is particularly important when considering investment in an apartment – to avoid mistakes, check with the local council to find out how many developments are in the pipeline for the area as this may have a significant effect on values.

Houses appeal more to families and may carry better capital growth potential. Look for areas where infrastructure development is either good or planned for the near future.

Popular schools always attract competition for houses, so you may want to research which are the best schools in the areas you are considering and look for property nearby. University locations also create a reliable source of tenants and income, and often offer good entry level investment opportunities.

Remember, before you consider any property investment, it’s a good idea to set your budget and get your financing pre-approved. We’re here to help you get on the right track with your property investment plans, so give us a call today.

Over the last 18 months, our hot property markets have been driving rapid increases in home values, particularly in larger markets. This has placed established properties beyond the reach of many home buyers and as a result, we have been seeing a corresponding boom in new housing construction across the country.

For the year from March 2014 to March 2015, there were 210,484 new dwelling approvals which is a healthy 11.2% increase over the previous year. And whilst the most recent figures for April this year show a slight decline in apartment approvals, there were 10,130 new house approvals which was an increase of 4.7% over the previous month.

Thinking of building a new home? Talk to us.
From these figures, it’s clear that more and more people are finding it attractive to build a new home rather than compete in today’s hot property market for an established house or apartment.

And why not? Building your own home not only has the potential to save you money, it gives you the opportunity to get the home you’ve always wanted – one that’s tailored to your personal needs and requirements with all the bells and whistles you may not be able to afford in an established home at today’s prices. New homes also help you plan your finances with confidence, with low maintenance costs and no major repair expenses in the foreseeable future.

Obviously there are some drawbacks to building a new home, compared to buying an established property. The construction process takes time and you may have to wait a while before you can move in. Additionally, if you’re building in a new housing estate, it may be some time before features like schools and shopping amenities catch up with the measure of convenience you’re currently enjoying in an established suburb.

Financing a new build is also a bit different to financing for an established home. Instead of a straight forward mortgage, you may wish to consider a Construction Loan product that can help take the hassle out of the building process.

Construction Loans – how do they work?
With a regular mortgage, you pay a deposit and the lender pays the remainder at settlement in a lump sum – it’s fairly simple and straight forward. Construction Loans differ from regular mortgage products as they pay for the project in stages, paying your builder as construction progresses through each stage – slab, roof, lock-up and completion. Additionally, Construction Loans usually last for the period of construction only.

The major benefit to a Construction Loan is that you only draw down on funds as you need them. This can mean big savings on interest as you only pay interest on the money you use at each stage. And once construction has been completed, you can often nominate which home loan product the Construction Loan will revert to, moving forward – ie. A standard variable rate loan or a fixed interest rate loan.

Another thing to take into consideration when building your own home is purchasing the land. If you purchase the land first, you will usually require a regular mortgage for the land portion of the purchase and then apply a Construction Loan to the build only. The loans can be arranged separately, but are usually bundled together, particularly with a house and land package deal you may purchase from a developer.

There are quite a few different Construction Loans on the market and each of them can be structured differently. We’re here to help you obtain the best loan product/s for your individual needs, so before you commence the process of building your own home, it’s wise to spend a little time with us to get the right financing lined up for your needs.

What else do you need to think about?
Just as with a regular home loan, you will require a deposit before you can commence building your dream home. The amount of deposit you need will vary according to the cost of the project and the lender’s requirements, so you should talk to us about how much of a deposit you will need.

Before you commence your build, you should also be very careful to establish exactly what is covered for the price, as there could be other expenses that you need to budget for. We recommend that you also have some contingency funds set by, just in case of unforeseen expenses that may not be covered by your Construction Loan.

Talk to us for more information
Building a new home may be a great idea for you and your family, depending on your personal financial situation and circumstances. If you’d like to find out more, or explore your loan options and establish your budget for a new build, why not give us a call? We’re here to help you discover if building a new home is a viable option for you and to help you get pre-approval on a suitable financing package before you begin. A short chat could help to take a lot of the hassle and uncertainty out of the process, so why not give us a call today?

In a hot property market like we’re experiencing at the moment, it can be difficult to beat the competition at auction. And with auction clearance rates running at around 80% in most capital cities, it’s clear that the majority of bidders miss out on the property they’ve chosen when the auction gavel comes down. So, how can you avoid going to auction? What can you do to secure a property when you don’t have deep enough pockets to outbid the competition on the day?

A good strategy is to try and secure the property by making an offer prior to auction day. Whilst many vendors will prefer to allow the market to dictate the best price for their property, many are open to offers before auction day.  Here are a few tips to help you make an offer that’s accepted and avoid the hassle and inflated prices that auctions can create.

1. Do your homework
Before you make an offer, you need to decide on an offer price. Start by researching recent sale prices of comparable properties in the area. This will give you a starting point for setting a fair offer price on the property you wish to purchase and give you a good idea of the vendor’s price expectations. It will also tell you if the property is in your budget and worth more of your time.

Next, research the property itself by obtaining building and pest inspection reports. If there are any problems with the property you can cite these as reasons why you are offering a bit less.

Another factor that you may need to research is demand for properties of this type in this particular area. Demand sets the price of a property and it may be high for a variety of reasons – schools may be particularly good in the area, the area may be about to undergo attractive infrastructure development projects like better public transport links or a new shopping center and so on. If demand for the property is likely to be high, you may need to make a higher offer to succeed.

If your research does not help you come up with a reliable offer amount, don’t be afraid to ask for professional help. A valuations expert can help you assess what the property is worth in today’s market. If you need a professional valuation, ask us for a referral and we’ll be happy to help.

2. Get to know the real estate agent
Negotiation is a two way street – so it is important to have a good working relationship with the real estate agent who is in charge of negotiations on behalf of the vendor. Make sure they see you as a serious buyer and they will be more respectful of your requirements and negotiations.

Remember that the real estate agent has the knowledge that can help you work out how best to play your hand. Here are some questions you can ask to help you formulate your offer strategy.

• Why is the vendor selling?
• What price is the vendor expecting?
• What are the vendor’s requirements regarding settlement? Do they want a long or short settlement, do they need to extend their stay in the property?
• Is this an investment property or the vendor’s home?
• Have they already bought elsewhere?

The answers to these questions will help you decide how to proceed – or even if you will proceed to make an offer at all.

3. Formulate an offer strategy
Once you are fully informed, you will need to think carefully about how to present your offer. By now, you should have an upper price limit firmly fixed in your mind based on your estimate of the property’s value and your budget. No matter what happens during the negotiations, never go above your upper price limit. It’s easy to be influenced by your emotions and the clever negotiating tactics of the real estate agent, so this is a hard and fast rule you should always stick to.

If you are hunting for a bargain, it may be tempting to make a ridiculously low offer for the property. However, this could be a mistake because the real estate agent could dismiss you as a serious buyer. If you have a legitimate reason for making a low offer, be sure to tell the real estate agent why you are offering a reduced price so that they continue to take you seriously.

If you really want to obtain the property, you will need to make a genuine offer.  A good idea is to offer a bit below your estimate of the value of the property. This will mean your offer is taken seriously and give you some room to negotiate upwards if the vendor does not accept your first offer.

Do whatever you can to make your offer more attractive to the vendor. To do this you could offer to meet the same terms they would receive at auction, offer a larger deposit, meet their settlement terms or offer to extend their stay in the property after sale.

4. Be ready for the negotiation process
The negotiation process will begin once you submit your offer in writing to the real estate agent. Verbal offers are not acceptable – your offer must be in writing and signed by you before they can present it to the vendor.

Once this is done, the vendor will either accept your offer, reject it completely or come back with a counter offer. If they reject your initial offer or come back with a counter offer, then you can raise your offer price – or walk away. The choice is yours.

Sometimes the real estate agent will tell you they have already had a better offer and use it to get you to raise your offer price. Do not allow this commonly used tactic to influence you to offer above the limit you have set for the property. Make sure your subsequent offers are reasonable and fair.

Remember, auctions cost money so it can often be in the vendor’s best interests to avoid going to auction too. Once the vendor accepts your offer, you will be asked to sign a contract agreeing to the purchase and the negotiations are done!

5. Be confident
Negotiating can be a nerve-wracking experience, so it is important that you are confident about the offer you make. Doing your homework will certainly put you in a position to negotiate confidently – or walk away if the situation just isn’t going to beneficial to you.

Be sure of your budget and never exceed it. Putting yourself in a difficult financial situation simply to secure a particular property is not worth the ongoing financial pain. To help yourself negotiate from a confident place, talk to us about your budget and we’ll help you to get pre-approval on your financing to give you more negotiating power.

Remember, we’re here to assist you in any way we can. Come in and talk to us about your plans and we’ll help you to secure your financing ahead of time. It’s a great time to be in the market for a property, so call us today.

With interest rates at record lows and property values experiencing steady growth, property investment is now one of the most popular ways to build wealth for your future and retirement. But getting the financing in place to fund your wealth building plans can be a hurdle. So how can you increase your borrowing power to help you take advantage of current opportunities? In this article we take a look at some of the things that banks and lending organisations take into consideration before approving your investment loan.

1. Minimise your existing debts
One of the first things that lenders look at when assessing you for an investment loan is the level of debt that you are already maintaining. In addition to your existing home loan, they also take into consideration any other debts you may have including personal loans, car loans, student loans, credit cards, store credit financing, outstanding bills and so on.  The more of these you have on the go, the more impact it will have on your credit score with a lender.

By minimising your debts and the number of repayments you have to make, you can help to increase your borrowing capacity when the lender makes an assessment.  If possible, it’s a good idea to pay off as many of these debts as you can before you submit an application for your investment loan. Another strategy might be to roll all of your smaller debts into just one personal loan or a loan with lower interest rate than credit or store cards, for example.

If you have an existing home loan, you might already be happy with the interest rate – so it’s worth finding out if you can roll your debts into your existing home loan to free up your borrowing capacity in the future. Talk to us and we will help you to determine if this is an option and if it will have the desired effect on your capacity to borrow for an investment property.

2. Minimise your outgoing expenses
Lenders also take a look at your expenses and use these to make an assessment of your capacity to repay a loan. You may think that this won’t be an issue with an investment property because your tenants will be paying rent to help cover the mortgage expenses, but this is not the case. Lenders take into consideration the worst case scenario – what will happen if your investment property remains vacant for long periods of time? How will you make your loan repayments then?

Take a look at your regular outgoing expenses and do everything you can to minimise them. Do you really need that expensive gym membership? Could you make do without that second car? Could you cut back on your pay TV subscriptions? Most of us are regularly paying for luxury items we don’t really need, so be ruthless with your budgeting strategies.

3. Reduce your excess credit limits
Another thing the lenders take into consideration before approving your investment loan is your capacity to get into more debt. That means that your credit cards could be reducing your borrowing capacity, even if you have a zero balance.

For example, if you have one credit card with a $20,000 limit and two more with $10,000 limits, this will have a considerable impact on the amount of money you can borrow – even if you owe nothing on those cards. In some cases, a lender could take these credit card limits to mean that you have a potential debt of $40,000 against your name. It might not seem fair, but they will often calculate what you would have to repay if you actually used up those limits and add that to your outgoings.

In order to increase your borrowing capacity, it is therefore recommended to cancel the extra credit card and loan facilities that you don’t really need. You’ll also save money on annual fees and this could help to minimise your outgoing expenses, as mentioned earlier.

4. Keep your financial records up to date
One of the most common reasons why property investors find their borrowing capacity is limited is because they don’t have up-to-date financial information to prove their income and financial position to the lender.  Your tax return is the best proof of your financial position and earning capacity that you can provide to a lender, so it is very important to keep them on file.

In many cases, lenders only ask for three or four payslips or bank statements as your proof of income, but this may not provide an accurate view of the bigger picture. If you are self-employed, or have a low base salary but earn commissions or bonuses for example, a few payslips or statements alone will not accurately convey what you actually earn and this may reduce your borrowing capacity or make you ineligible for the best interest rate deals.

You may also have additional income from existing investment properties, stocks and shares, or even a border in your home. To be sure the lender can make an accurate assessment of your income and earning capacity, you need to be able to provide plenty of documentation about these other sources of income as well as your regular job.

5. Access the equity in your existing property to increase your deposit
If you already own a home or some investment properties, accessing the equity can help you secure finance for another property purchase. Your equity is the difference between what the house is worth on today’s market, and how much you owe against it.

Put simply, your property’s equity will increase both as you pay off your mortgage and as the property’s value grows. For example, if your $500,000 property increases in value by 10% over the two years you own it, that’s an extra $50,000 in equity – and you can also add in any reduction you have made to the mortgage from your repayments.

Depending on your financial circumstances, it may be possible to refinance your mortgage to access that money. This will help to increase your deposit amount for your investment property and also help to increase your borrowing capacity. Just ask us and we’ll help you determine if this is the case.

In order to access the equity in your existing property, you will first need to obtain an accurate valuation from a reputable valuations expert. We can help you with this so don’t hesitate to ask us for assistance! The lender will also obtain a proper valuation, so this is an important step when you are considering accessing your equity.

You might also want to consider ways to add to the equity in your existing property by making improvements or renovations. This can be a fast way to increase your borrowing capacity so you can get into your next investment sooner.

Don’t wait to get started with your property investment plans!
If you’re thinking about making a property investment, why not come and talk to us about strategies to increase your borrowing power before you start the buying process? We’re here to support you in your ambition to use property to responsibly build wealth for your future and retirement, so give us a call today.

When you’re buying a property, careful research is the key to success. From making the initial decision about how much you can afford to spend, right down to locating the right property and making your purchase, doing your research to make sure you’re fully informed will help to ensure you make a profitable investment that will be a real financial asset for you now and into the future. But where do you start? In this article we outline the research steps you need to take when climbing on to the property ladder.

Property Research

Step 1 – financial research
The first step in buying a property is setting your budget and organising financial approval for a home loan. Researching how much you can afford to spend is as simple as listing all of your assets – including the cash you may have on hand for a deposit – and working out your expenses. This will show you how much you can afford to spend on a deposit and home loan repayments.

Once you’ve completed this basic research of your financial position and decided your budget, it’s time to talk to us – your local mortgage broker. We’ll sit down with you to discuss your financial position, your goals for the future and then help you choose a mortgage product that’s right for you. We’ll then research the home loan market for you and select the loan options that best suit your objectives and give you the best rate.

Step 2 – What type of property do you want to buy?
Once you have your budget firmly in mind, it’s time to decide what type of property you can purchase. Obviously the amount of money you have to spend will influence what type of property you look at purchasing, but there’s a lengthy list of options and you need to do some research to help you choose the one that’s right for you.

Are you interested in buying an apartment, a unit, a house or perhaps a commercial property? If you are purchasing the property as your own home the decision will be influenced by your personal needs. But if you are purchasing the property as an investment, then you may consider all property types as suitable – as long as they give you the return on your investment that you need for it to be financially viable and profitable.

Step 3 – Where do you want to invest?
If you’re buying a property as your own home, this step will be about researching a suburb that best suits your personal lifestyle and the future needs of your family. But if you’re buying an investment property, it pays to look further afield and consider the locations that have good capital growth potential and will give you the best return on your investment.

Saavy investors spend time researching to find areas with capital growth potential and then focus on finding properties in these areas that are within budget. This requires access to good property market data that gives you figures on the latest trends. If you need help accessing this kind of information, then just ask us.

Research suburbs that are showing steady capital growth, and suburbs adjacent to ones that are already popular. Don’t be afraid to consider properties in other capital cities that may have better capital growth potential than the city in which you live. If you are buying an investment property, consider locations that will be popular with tenants – suburbs with good schools, public transport links, shopping centres, amenities and access to the CBD.

Step 4 – Locate the property and research its viability
Once you have an idea of your budget, the type of property you want to buy and general locations you may want to invest in, you can start researching to find suitable properties to inspect.

If you’re purchasing an investment, you will need to research each property very thoroughly before you decide on one to purchase. First you’ll need to determine the right price for the property so that you don’t pay too much. You can do this by researching the sale prices of comparable homes in the area to see how yours stacks up.

Next you’ll need to do some research with real estate agents to determine what kind of rental return you can expect on the property you have chosen. It’s important to determine whether or not the rental return will cover all the expenses – including the mortgage – so that you can work out if it is a financially viable investment for you and suits your budget and investment goals.

If you’re looking to purchase a property soon, this guide will help you get started on your essential research. Of course, you can get started on the first step of researching your budget and organising pre-approval for your home loan right away, just by talking to us.

We’re here to make sure you get the best home loan product and rate available for you, considering your personal financial situation and goals. There are many competitive home loan products available on the market right now, so it’s a good time to get started. Give us a call today.

At Element Finance Fremantle, we ask 100% of our clients what they think our Mortgage Brokers can do to improve their service for them and for all their clients. It is one of the most important ‘elements’ of the process, ensuring we are always improving our systems and service. We really value constructive feedback although it is enjoyable to receive testimonials as glowing as this from Candice last week:

“Mike was extremely professional and met our every need. Will definitely be recommending element finance to others in the future.”

It lets us know we are on the right path and definitely doing the right thing. If you were ever asked, how would you review YOUR bank or broker’s service?

Excellent Service in Fremantle

CBA have this week released their economic forecast expecting interest rates to rise a full 1%  over the next 18 months. With the lowest rates home loan rates you have probably ever seen, is it time to FIX IT? Call Element Finance Fremantle today to discuss the benefits.

https://www.commbank.com.au/content/dam/commbank/corporate/research/publications/economics/forecasts-economic-financial/2014/270614-Forecasts_EcoFin.pdf

Fix your interest rate?

At its July meeting today, the Reserve Bank of Australia decided to maintain the official cash rate at 2.5 per cent, as predicted by most market analysts. Keeping the cash rate unchanged is in line with the RBA’s intention to create a period of stability on interest rates.
At the start of the new financial year, we can usually expect Australia’s property market to slow down for the winter months ahead. However, the period of stability on interest rates has created a lot of activity in the housing market, with auction numbers in most capital cities remaining high throughout June.
Analysts say that the continuing property market activity is being led by investors who are taking advantage of the low interest rate environment to boost their portfolios. However, the high numbers of properties remaining on the market during this traditionally quiet time of year means there are plenty of opportunities for those looking to make a purchase.
Our loan market remains very competitive, with many lenders still introducing low fixed rates, along with great variable rate options. First home buyers, as well as those looking to refinance and invest, can expect some great deals ahead of the predicted rise in interest rates later this year or early next year. If you’d like to find out how to take advantage of the current low rates to reach your goals this financial year, then talk to us today.

Ready to build or buy now, but haven’t yet sold your old property? Bridging finance could be the answer to keep the ball rolling.

Trying to sell one property and buy another can be quite a daunting and emotional process, especially when the timelines of both projects don’t match up perfectly.

Generally, people can be a bit nervous or anxious, but it’s an education process for them.

One of the services that Element Finance Fremantle have offered clients in the past is assistance in applying for bridging finance, despite the fact that they don’t financially benefit from handling them. A bridging loan is usually just an extension of the loan amount on a regular home loan, and it can cover the purchase price or construction costs of a new property while your old one is selling.

Most lenders offer a period of interest-only repayments on bridging loans, allowing borrowers to get into their new home sooner without having to start paying off a full mortgage before selling the old one.

The team at Element Finance Fremantle are also well accustomed to negotiating rates with banks to get appropriate deals for their clients so they don’t necessarily need to refinance to make savings when interest rates fall.

They use their knowledge and other banks’ rates to drive rates lower. So occasionally, clients don’t even have to change their bank. Credit advisers can often just negotiate a better deal to keep the banks honest.

Call or email Mike at Element Finance Fremantle now to help you find you the best deal with the least headaches. (08) 6323 2350 mike@elementfinance.com.au

Well, the tell-tale signs that we are near the end of the financial year are upon us! Advertisements for EOFY sales are everywhere we look, search parties for those mislaid receipts, and the usual tax time property jargon such as “depreciation” and “negative gearing” being bandied around the water cooler.

Real estate at tax time has its own language and terminology which can be very confusing, particularly if you’re new to the investment process. Element Finance Fremantle has put together a guide to the key phrases used at this time of year when we are thinking about your property investments, and what that means for your tax!

Capital Gains Tax (CGT)
A capital gain, or capital loss, is the difference between what it cost you to acquire an asset and what you received when you disposed of it. Selling assets such as real estate is the most common way you make a capital gain or capital loss. In other words, you make a capital gain when you sell a house for more than you paid for it.

You pay tax on your capital gains. So, when you make money from the sale of a property, it forms part of your income tax and is not considered a separate tax.

Most real estate is subject to CGT. This includes vacant land, business premises, rental properties, holiday houses and hobby farms. Your ‘main residence’ (family home) is generally exempt from CGT unless you rented it out for a time or it’s on more than two hectares of land.

If you are a property owner, capital gains tax may become an issue when you make a profit from selling your property. But there are a couple of standard exemptions which could assist. For more information, we can help you with a referral to an accountant, or visit the Australian Tax Office website.

Negative Gearing
The term ‘negatively geared’ sometimes causes confusion, especially among people new to the intricacies of property investing. Negative gearing occurs when the costs of owning a property – interest on the loan, bank charges, maintenance, repairs and capital depreciation – exceed the income it produces. Simply, at the end of the day, the investment property in question will run at a loss and you need to make up that shortfall from your own pocket.

Negative gearing can be used as an investment strategy in order to reduce your taxable income, maximising available tax benefits. If the property becomes cash flow positive (see below), this profit is added to your taxable income and you may have to pay more tax depending on the structure of your investments.

Depreciation
Like the name suggests, depreciation is the decrease in value of an item over time. An example of a depreciating asset is your car, which is said to reduce in value a great deal from the time you drive it out of the dealership.

When it comes to investment properties, depreciation can certainly work in your favour. If your investment property depreciates, you can claim against the decreased value of your investment. Negative gearing and depreciation allowances are popular ways to reduce your tax liability. There are various rules around this in all States, so please speak to a professional, or we can get you in touch with the experts!

Cash flow positive
The reverse of negative gearing, your investment property is considered to be cashflow positive if your income generated from the property is greater than your outgoings – after you’ve taken into account tax deductions. Tax deductions include things like interest paid on your loan, depreciation, maintenance and service costs.

Equity
Equity is the difference between what your residence or investment property is worth and how much you owe on it.

Put simply, if your property is worth $300,000 and you still owe $100,000, you have $200,000 in equity. Over time, as you reduce the amount you owe on your home or the value of your home grows, your equity increases. Equity is a very good thing to have as it can be used to leverage further property purchases without your having to save a new deposit.

Of course there are lots more real estate and legal terms you will come across at tax time and when investing in property. We recommend you seek professional advice. Contact us to learn more on 6323 2350 or mike@elementfinance.com.au

Tax jargon explained

As a Mortgage Broker, Element Finance Fremantle don’t only help people buy their dream home or investment properties. We also continuously monitor our clients’ loans to ensure they still have a great deal. When their lender has ceased to be the best value, we offer options to improve that, including refinancing their loan to a new lender for a better deal. We also help refinance when our clients need to consolidate debt or need to access equity in their home. We helped Damien and his family into their first home a few years ago and now that their situation has changed, we assisted again by getting an even better suiting loan for them. Here is what Damien has told us about his experience this week:

Mike, once again, listened to our needs and delivered exactly what we were looking for. His follow up, attention to detail and enthusiasm made the refinancing process extremely easy and smooth. Thanks Mike! Damien Kelly

We truly appreciate all feedback we receive and especially love hearing great testimonials like this one from Damien. Have a look at what some more of our recent clients have had to say http://elementfinance.com.au/testimonials

Fremantle Broker Review

When taking out a home or investment loan, there are many insurance products that are relevant and all have a different purpose. Choosing the right cover or combination of insurance products can be very confusing. This article describes the insurance products that you may need to know about if you’re considering taking out a mortgage.

Lender’s Mortgage Insurance (LMI)
Lender’s Mortgage Insurance (LMI) is in place to protect your lender if you default on your mortgage repayments. It is usual for your lender to charge you a fee for LMI if they are lending you 80% or more of the purchase price of your property. It is a one off payment made to your lender when you set up your loan.

It should be noted that LMI does not cover you if you should have a problem repaying your loan. In the unfortunate event that you cannot make your repayments and your home is repossessed and sold, LMI covers the gap between what the property is sold for and what is still owing to your lender.

With LMI, the fee is added to the total of your loan and paid off as part of your monthly mortgage repayments. Even though LMI may help you secure a lo-doc loan or a loan with a small deposit, you will still have to meet all the statutory credit checks to ensure you can meet your mortgage repayments when you apply for your loan.

Mortgage Protection Insurance
Home buyers often confuse Mortgage Protection Insurance with LMI but it is a completely different product.

Mortgage Protection Insurance is taken out by you to protect your home in the event that you are unable to meet your mortgage repayments due to sickness, injury, unemployment or death. (LMI is designed to protect the lender.) It should be noted that Mortgage Protection Insurance only provides cover for your mortgage and if you require coverage for other expenses in case of sickness, injury, unemployment or death you should consider the other forms of insurance listed below.

Like most personal insurance products, Mortgage Protection Insurance requires you to pay a premium either annually or monthly. The size of your Mortgage Protection Insurance premium will depend on the size of your home loan and how much of it you need to cover. Cover will vary depending on the provider, so be sure to read the PDS carefully so you understand what you are covered for.

Total and permanent disability insurance (TPD) & Life insurance
Total and permanent disability insurance cover is designed to give you a financial safety net if a permanent serious injury or illness makes it impossible for you to continue to work (depending on the the definition of the policy). It usually covers the costs of rehabilitation, debt repayments and the future costs of living, but this varies according to the provider. Life insurance usually only pays an agreed lump sum in the event of your death.

TPD insurance can often be taken out as part of Life insurance cover. You may have this cover with your superannuation, or you can organise it as a separate insurance product if you don’t. Remember that Life insurance only covers you if you die, so TPD insurance should be considered as a separate issue.

Income protection insurance
Income protection insurance is usually only designed to cover you if you are temporarily unable to work. It can usually be arranged so that it covers you for up to 75% of your normal income, until such time as you’re able to return to work or for the prescribed benefit period on your policy. It can be arranged so it covers you for illness and redundancy, depending on the policy and provider.

Income protection insurance is a good idea if you don’t have money saved to act as a safety net in the event you’re out of work. It could be used to cover the costs of day to day living and your mortgage.

Landlord’s insurance 
If you purchase an investment property and want to rent it out, Landlord’s insurance can cover you for accidental or malicious damage to your property and any contents that you may have leased to your tenants for their use. It’s a great way to get peace of mind when you’re placing your most valuable asset in the hands of tenants!

Individual policies for Landlord’s insurance can vary greatly from provider to provider – in some cases it may be considered an add-on to building insurance or home insurance, so be careful to choose the product that’s right for your needs and particular circumstances.

Building insurance/home and content insurance
Building insurance is a product that you can take out if you are constructing or renovating a home, or if you wish to insure the building separately to the contents of your home. Home and contents insurance usually covers both the home and the contents.

This type of insurance product usually covers you for disasters like fire, flood, and damage caused to your home, garage and sheds due to accidents. It is designed to provide you with adequate cover in the event you need to repair or rebuild your home after an insurable event has occurred.

Policies for all these insurance products and what they cover vary a great deal from insurer to insurer. You should always read the product disclosure statement carefully before you take out any insurance product or policy, and ask questions of the provider to make sure you get the cover you need.

The various insurance cover you need will depend on your personal financial situation and the eventualities you need to cover. For more information or a referral, please get in touch today.

Find out why more Aussies are ahead on mortgage repayments and how you can be too http://yhoo.it/1gC1bum

Home loan strategy

…..and Element Finance Fremantle loves our home loan clients! We especially love receiving such great feedback from you after your loan has settled. Thanks very much, Andrew, for your kind words this morning.

“Mike and the team achieved something we could never have done alone. Communication between all parties were constant and extremely helpful. Mike was always a step ahead and had things moving along without being asked. He predicted our needs and provided solutions to our problems. Even with such a complicated situation we had, Mike worked at it until we got the result we needed. We felt looked after and important as a customer. Even more impressive was the level of service during and after settlement,making sure everything has run smoothly throughout. I wouldn’t hesitate recommending Element finance to anyone who is in need of a complete service broker who will do everything to help from offer to settlement and beyond. Thanks again Mike and the team for all your help.” – Andrew Threadgold, Tapping. 2 April 2014

Read more client testimonials here.

Now is a perfect time to compare your home loan with what is available in the market. Phone our Fremantle office on 96323 2350 and our team will let you know how much you could be saving.

Rates on hold for April

Watch out! Element Finance Fremantle have expanded their offerings to more than just home loans and investment loans. We are now able to help with EXTREMELY competitive Chattel Mortgages, Commercial HPs, Finance Leases and Novated Leases, Motor Vehicle & Car Loans and more.

If you or your business plan to purchase a car, truck or trailer, earth-moving or construction equipment, manufacturing or farming plant & equipment call Element Finance first.

Plant & Equipment Finance Available

I can think of dozens of places where a room like this would be ideal to capitalise on Fremantle’s many stunning vistas. What would you rather be overlooking, park, ocean, river, golf course or beach?

Made for Freo

Shipping containers as permanent homes are becoming more popular with a couple being completed right here in Fremantle recently. They don’t have to look like boxes either with elaborate contemporary designs easily achieved. Have you seen any great examples? Would you live in a shipping container?

Is Fremantle the perfect city for this?