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Secure Loans Pty Ltd, 42 montia Street, Melbourne (2026)

29/11/2022

Should you buy or build your next home?

Many buyers struggling to find the right home are going back to the drawing board and building rather than buying an existing home.

There are obvious benefits to a brand new home: you can build exactly what you want and enjoy shiny new surrounds, with no wear and tear costs for years to come. But there can be downsides to creating your castle.

Let's look at some of the pros and cons of building versus buying.

THE PROS OF BUILDING

You get what you want

The great pleasure of building your own home is choosing what you want for today's lifestyle. If building, you have two options: a project home or a custom-built one.

Project homes offer a suite of designs, usually with options to mix and match or upgrade some features. They are cheaper than custom-built homes because the builder works on an economy of scale for the building materials and products and knows exactly how much money will be made on each design.

The other benefit is that you can tour display villages and see exactly what you will get.

A custom, or architect-designed, home will cost more but allows you to create your dream home. Just remember, the higher the quality of your materials and fittings, or the harder they are to source, the higher the cost. Size also matters, with builders working on square meterage.

You can go green

The Nationwide House Energy Rating Scheme requires all new homes to have a minimum energy rating of six stars (one being the lowest and 10 being the highest), which means lower energy and water bills for your household, plus the feel-good factor of helping the environment.

Green design includes the home's aspect to make the most of natural cooling and warming, water tanks, energy efficient lighting and better-insulated windows.

You can be part of a new community

In a world where increasingly few of us know our neighbours, a new home in a new estate can help knit you into a community.

New estates are generally located in high-growth areas that attract young families, a plus for those with kids who want to feel part of a neighbourhood.

These estates are also carefully planned, often with new parks and purpose-built shopping centres. Some are even large enough to have their own schools, heightening the sense of community for residents.

THE CONS OF BUILDING

Time and stress

Building a new home, even if you opt for a project design, requires your input and time. Even the simplest projects can take their toll, especially if couples disagree about certain fixtures, bad weather impacts timelines or the builder gets something wrong.

Busy people might struggle to find enough time to make decisions, liaise with the builder and other contractors and visit the building site. If that's the case, buying an existing home might be a less stressful option.

Locating land

While new homes are generally part of new communities, the trade-off is that the land is often located in outer suburbs, with fewer public transport options and longer commutes.

Finding vacant land in established areas is nigh impossible in some cities, so older homes in poor condition are being snapped up and knocked down. For many, the cost of buying and demolishing a home and building a replacement is prohibitive.

If you are looking to settle in an established suburb with ample infrastructure and amenities, buying a home and renovating it to suit your needs may be more affordable and convenient.

29/11/2022

BUYER BEWARE THE BARGAINS

Limited cash flow and equity mean many first-time property investors feel the need to chase down a bargain to enter the market. But, like most things in life, you usually get what you pay for, which � in the case of property � can mean unrealised returns or even losses.

While there�s nothing wrong with paying less in the hope of making more, investors need to understand when a cheap property is truly a bargain and when they could be selling (or rather buying) themselves short.

Here�s our guide to help investors actually get what they bargain for.

Always ask �why�:

There�s always a reason a property is selling cheap. Your job is to find out why.

Some reasons are obvious � the property is on a main road or backs onto a railway line � but others may be less overt. There could be termite damage, rising damp or shifting foundations, which perhaps only a property inspection will reveal. While not irreparable, these can be big-ticket fixes and probably beyond your reach if you have limited funds.

Other factors may be even more concealed. For example, a very small property with poorly placed sewer pipes that prevent extensions, a new flight path planned for overhead or a property in a high-risk flood zone. These are variables you can�t control and should probably be avoided.

The best way to avoid being sold a lemon is to do your research, not just on the property for sale but on others in the vicinity. What�s the average price for similar properties in the same suburb? And what do they have that yours doesn�t, or vice versa (as in the case of aircraft noise).

That�s not to say all cheap properties have sinister secrets. Some are under-priced because the owners need a quick sale or the property is part of a deceased estate. Keep in mind, though, these sorts of genuine bargains tend to get snapped up quick, so have your suburb research on hand to be in a position to pounce.

What can and can�t be fixed:

Even in the property market there are lemons that can be turned into lemonade. It�s a matter of knowing which lemons are worth squeezing, which means accepting what can and can�t be fixed.

What you can fix:

- Minor noise (with insulation and double glazing).
- Interior design.
- Configuration of rooms (turning a study into a bedroom or vice versa).
- Storage.
- Natural lighting in a house (add a skylight, windows or glass doors).
- Under-cover parking for a house (add a car port).
- Landscaping.

What you can�t fix:

Location.
- Land zoning and covenants (restrictions on height, building type etc).
- Land size.
- Traffic.
- Infrastructure that imposes on your property (e.g. power poles).
- Flight paths.
- Aspect (which way the property faces).
- Natural lighting in a unit (you won�t be allowed to add windows).
- Unit block exterior (although you can try and influence the body corporate).

Just because a negative, such as traffic, is beyond your control, the property may still be worth pursuing at the right price. You just need to accept it may be harder to rent and harder to sell, and will probably take longer than desired to increase in value.

One of the biggest mistakes investors make when they purchase cheap properties with �unfixables� is to over-capitalise on renovations (see our story in this edition on this very subject).

There can be a temptation to compensate on what can�t be fixed by over-investing in what can. If you decide to invest in a bargain that has some obvious drawbacks, do your homework on which renovations will give you the best return on investment.

Short-term pain, long-term gain:

As with all investments, you need to weigh up your personal finance goals and individual circumstances before settling on a property. For many investors, a bargain buy (even with some of the unfixables) is going to be their best opportunity to gain a foothold in the market.

It�s worth considering, though, whether settling for something cheaper is the best strategy in the longer term.

A slightly more expensive property in a quality suburb with higher growth potential could be worth the extra stretch up front if the capital gain over time far outstrips a bargain buy elsewhere.

Buyers should also be wary of towns or suburbs billed as the �next big thing�. Where there�s a boom, there can also be a bust. Towns built on the back of mining are key examples of property markets that can lure investors with promises of high rental returns. But if the mine dries up or goes belly up due to external factors, you could be left with a property that is worth much less than what you paid with few prospects of tenants.

The key to taking a longer term view is patience, and ensuring you are in a financial position to stick to your plan, especially if it means holding onto a property for 10 or more years to realise its growth potential.

Get expert advice:

Your broker can help you assess your individual circumstances to determine what you can afford. Everyone�s circumstances are unique so it�s important your first investment takes into account your earnings now and into the future, plus any significant lifestyle changes that might affect your ability to service a loan.

Are you planning to start a family or travel? Do you have kids in private education?

It�s important to weigh up all of these factors when considering your financial future.

29/11/2022

How to fix a broken Credit Record.

Do you know what a lender will find when they look at your credit history report?

For many borrowers, it's not until they apply for a loan that they even lay eyes on this document for the first time. Unfortunately, this is also when many people find out that their credit history is less than perfect.

There are lots of little mistakes you can easily stumble into when you're not focussing on maintaining a healthy credit record. Don't despair though - there are also ways to fix them, as long as you're willing to be a little proactive.

Multiple Applications

Some people cast a very wide net when applying for a home loan. They complete applications with a variety of lenders in the hope that one of them will be approved. This tactic might have been a great idea when you were applying to universities, but it's the worst possible way to apply for a home loan.

Unfortunately when you apply for a loan and you aren't successful for any reason, this is noted on your credit record. There may be logical reasons for your application being declined - sometimes it's as simple as not being a customer of that particular bank.

The problem is, when you have a few of these on your record it can start to appear that you aren't a very good risk for a lender - since so many other lenders have already said no.

The best way around this is to engage a mortgage broker, who will investigate on your behalf before lodging and application with the most appropriate lender for your personal circumstances.

Digging your heels in

Let's face it - there are some companies out there who are just shocking to deal with. If you spend a lot of time on the phone arguing over incorrect bills, you're not alone. After lots of phone calls, it might seem like a good idea to ignore that incorrect phone bill and hope that it goes away.

The problem with that approach - the bill might be listed as a default on your permanent record. For your own best interests, it's probably better to pay the bill, and then dispute it afterwards.

Not keeping on top of your bills

If you have moved house a couple of times, or if you don't have the best filing systems in place, it's possible that you might have misplaced or neglected to pay the occasional bill. Sometimes people have defaults listed on their credit history report due to moving house, and not receiving any bills or reminders relating to the debt.

Make sure that you have proper mail redirections in place when you move, and make a list of companies to update your details with as soon as possible.

If you have these sorts of defaults on your credit history report, you might be able to have them removed by communicating directly with the company who reported the default.

Failing this, you might be able to lodge a dispute through a credit reporting body such as Veda.

27/11/2022

Mortgage traps ahead! - Don't fall in.

Do you love a bargain? It can feel like such a victory when you find that special deal on a new TV, or when you save a bundle by doing your Christmas shopping during a toy sale.

Unfortunately, this sort of approach to looking for a mortgage can easily land you in hot water. Whilst it always pays to look around for a good deal on a home loan - there's also an old saying: "If it sounds too good to be true, it probably is".

There are a few fatal traps when it comes to choosing the right loan for you. Unfortunately the excitement of buying your first home can be all too distracting, and it's easy to put your foot in it by failing to research your loan options.

Irresistible Offers

The majority of lenders are very responsible and cautious, and only give out loans to people likely to make their repayments.

These lenders will offer the best deals their desired customer - usually someone who earns a good income, has a clean credit history report, and has a decent deposit to contribute.

If you know that your circumstances don't make you particularly appealing to a lender, but you're being offered a crazy deal - there might be something amiss.

Take some time to read the fine print and make sure that the loan contract doesn't contain any nasty surprises. Remember - there's no such thing as a free lunch!

Fixed rates

You might be tempted to lock in a low interest rate for a couple of years so that you can have the peace of mind that comes with knowing your repayments.

The danger here, though, is that you might be missing out on features that you need, or being charged additional fees. Make sure that you research all aspects of the loan, rather than just focussing on the interest rate.

Fees and Charges

Loan contracts can be very detailed - packed full of confusing words and legal disclaimers. But one section that you should study with a magnifying glass is the schedule of fees and charges.

Do you know whether you can make changes to your repayments? How much will it cost if you default on a repayment? What is the fee associated with ordering a statement ahead of time? And importantly - what establishment fees will you have to pay at settlement?

If you don't know this amount, you might not be able to proceed with your purchase and you could lose your deposit.

Flexibility and Features

It's important to consider what features you need in a loan - do you want to be able to make extra repayments when times are good?

Would you like to be able to take that money back again if something doesn't go according to plan?

What about if you want to change your repayment frequency? The features of your loan are just as important as the interest rate - and not paying attention could mean that you end up paying a lot more in the long term.

25/11/2022

Did you know Mortgage Stamp Duty is no longer charged on refinanced home loans?

When our home or car insurance comes up for renewal each year, most of us (hopefully) invest the time to shop around and investigate the competition to make sure we are getting a good deal.

The average Australian with a mortgage spends 18% of their gross income on housing costs. With such a large investment, why do we not give our home loan the same regular review?

With the recent change that Mortgage Stamp Duty is no longer charged on refinancing your home, it is a lot cheaper and easier than many people think to switch loans.

For more details, read my "Change can be good" article.https://www.mortgageaustralia.com.au/email/files/changecanbegood.pdf

25/11/2022

If you are thinking of buying - start your research with a Free Suburb Profile report.

Australian consumers have grown to be exceptionally educated when it comes to researching the property market.

Not a day goes by when there isn't an article in the media reporting some aspect of the property market.

Information providers like MyRP Data make researching the local marketplace much easier for the average buyer, seller or investor.

Visit www.myrp.com.au/n/free-suburb-profile/myrp-545 for a free suburb profile report.

Please also download this guide for more details.https://www.mortgageaustralia.com.au/email/files/savvypropertypurchasing-freerpdatasuburbreport.pdf

23/11/2022

How to get a loan when it all seems hopeless?

Jason was 28 when he decided to start looking for his first home. A builder by trade - he had been working for the same employer for over 8 years and he had substantial savings - enough to pay a 10% deposit and cover stamp duties.

He usually paid the phone bills on time, and his credit card was barely ever used.

In spite of all this, Jason was unable to get a loan through traditional lenders. The reason - a mistake from the past.

Against the advice of his parents, he decided to help a previous girlfriend get car finance. She was only working a couple of days a week on a casual basis, and the finance company wouldn't approve her loan.

Always the nice guy, Jason offered to put the car in his own name - and trusted his girlfriend to keep the repayments on track.

When the relationship broke down a couple of years later, he was shocked to learn that no repayments had been made on the car for several months. To make matters worse, the news came from a grumpy middle-aged man who arrived early one morning trying to repossess the car.

A few years on, Jason was growing increasingly frustrated in his search for a home loan. Finally, he found a Mortgage Broker who suggested a 'Non-conforming' loan. Although the interest rate wasn't brilliant, Jason was finally able to get his foot in the door. The lender also offered to review the loan conditions after 12 months, if all of the repayments were made on schedule.

With the help of a non-conforming loan, Jason was able to realise his dream of home ownership, despite having a bad credit record.

Non-conforming loans are designed for people who don't conform to the traditional criteria used by lenders to assess a loan. Some borrowers have a bad credit history, and others might be struggling to get approved because they just changed jobs. Sometimes, even people who have previously been declared bankrupt can still be approved for a non-conforming loan.

Importantly, there is a big difference between 'Non-Conforming Loans' and 'Low-doc Loans'. While non-conforming loans are designed for people who have an imperfect credit history, low-doc loans are designed for the self-employed. Low-doc loans are often quite strict - borrowers usually need to have a 20% deposit, and a very healthy credit history to get approved.

Lenders usually charge a much higher interest rate for non-conforming loans. The good news is, many lenders will agree to review your rate after a set amount of time, providing that you meet all of your repayments.

Whilst it's never a good idea to take out a home loan if you can't afford to repay it, non-conforming loans can be very helpful when your financial position is good now - but your past credit mistakes continue to haunt you.

23/11/2022

Introducing 5 great reasons to invest in property today:

Do you sometimes listen to those seasoned property investors and wonder how they got started?

It's quite simple actually - they probably started with just one investment property.

Anyone can realise the dream of achieving your financial goals through property investment.

If you're not sure why you would want to get involved, here are the five best reasons:

1. Financial Independence

Now, more than ever, it's important to make sure you have steps in place if you want to live comfortably in your retirement. The retirement age seems to be increasing, and people are no longer able to rely on the aged pension as a sole source of income.

If you start now you can build a property investment portfolio that will provide you with financial independence - whatever that means to you.

For some people that means one investment property that provides a rental return. For others, it means building a veritable monopoly of investment properties in an apparent bid to conquer the universe.

2. Take control of your own investments

The great thing about investing in property is that you're completely in control of what you purchase, and you can take steps to ensure that you give yourself the best chance of achieving excellent capital growth or rental return figures.

The problem with investing in shares and superannuation is that you aren't able to control fluctuations in the market - your role is very passive.

3. Grow your portfolio as your equity increases

Once you start investing in property, it's sometimes difficult to stop. One investment starts to grow which allows you to purchase another, and before you know it you have a nice little collection of properties making money for you.

4. Capital Growth

If you choose wisely, you should be able to achieve strong capital growth on your investment properties. The key is to choose the right type of property in the right area. This might not be an area where you would choose to live - it just needs to be an area with lots of potential for growth.

5. Rental Income

If you hope to achieve a good rental income from your investment properties, you should purchase carefully, and keep your ideal tenant in mind. If you like the idea of renting to students, make sure you look in areas near a university or very near to public transport. If you would prefer to rent to a family, schools, shopping centres and parks might be more important.

But decide what's most important first: capital growth or rental return. You might not always get a great rental return in an area that has a high level of growth.

22/11/2022

How to avoid getting stuck in the borrower's 'land of confusion':

Comparing the true cost of a loan can be a lot more complicated than it seems.

Comparison Rates are one way of comparing loans, but it doesn't always provide a complete picture of the total cost of the loan.

Make a mistake and you could pay thousands more in interest than you should.

To avoid this, have a look at this short guide - "Land of Confusion".https://www.mortgageaustralia.com.au/email/files/landofconfusion.pdf

22/11/2022

Reviewing your finances?

Here are some money-saving suggestions

Many people refinance their homes or investment properties to reduce their monthly home loan repayments. What other aspects of your finances can you review to help save money?

1. Review the frequency of your home loan repayments

If you are paid weekly or fortnightly, see if you can change the frequency of your home loan repayments to fit in (this may not be possible on all products). Because the interest on your home loan is calculated daily, making a payment two weeks earlier each month saves you money in the long term, and in the short term helps make ongoing budgeting easier.

2. Consolidate debt

If you're paying high rates of interest for debt on credit and store cards - each of which will probably have an annual charge - think of consolidating debt in one place. You may very well be able to access a lower overall interest rate, reducing your monthly outgoings. You will avoid paying duplicate fees. Plus, a single monthly debt repayment is easier to manage than having to pay multiple credit card bills.

3. Cars

Cars are often the biggest family expense after home loan repayments. But as family needs change over time, and the price of petrol rises, we can find we have more expensive cars than we need. Could you downsize your car/s, not only reducing monthly repayments, but also potentially saving in maintenance, insurance and fuel costs? Have you thought about buying a scooter for short, local trips? Are you getting the best deal for the money you spend on your car insurance and repairs?

4. Insurance

There are three ways you may be able to save money on your insurance premiums. First, shop around when your renewals fall due rather than simply continue with your existing provider.

Also, you may be able to reduce monthly premiums raising the excess payable, or improving the security on your home.

Finally, some insurers provide discounted rates for bundling together policies such as home, contents, car, health or life insurance. Perhaps you could make an overall saving this way?

Organising your insurance through a Mortgage Australia broker could save you money. For example if you take out Home insurance you could be eligible for a 10% discount for the first year and a bonus 90 free day's cover. Why not get a complimentary quote? What have you got to lose?

5. Clear out the shed!

Perhaps you have items of value gathering dust in your shed or garage? Whether you hold an old-fashioned garage-sale or go onto e-bay, perhaps now is a good time to get money for the belongings you're never going to use.

20/11/2022

Six Steps to becoming mortgage-free - Step 2: Change your frequency...

Do you wish there was a way to own your home sooner - without a mortgage? Do you often wonder what it would be like to worry less about your repayments, and more about planning your next holiday?

What if there was a way to reduce the length of your loan, without making huge financial sacrifices?

Well, the good news is that there are six steps you can implement today that will make a huge difference to the time it takes you to pay off your loan.

Last week we discussed the importance of shopping around to make sure you have the best loan in the first place. A small saving now could translate to enormous financial and time savings over the life of your loan.

Today there is another simple step that can really make a difference to the amount of interest you pay on your loan. And it's as simple as changing the channel on your TV. (Well, almost!)

Change your repayment frequency.

Lenders calculate the interest on your loan daily. So even though your repayments might be made on a monthly basis, your interest is accruing all the time - even while you sleep.

By changing your repayments to come out fortnightly, you'll pay your loan off faster. You will also reduce the total amount that you pay on your loan.

This could mean reaching your financial goals a little sooner, and having more money in your pocket at the end of the day.

Stay tuned for your next step to becoming mortgage free!

20/11/2022

Protect your investment - find a great property manager:

If you are a property investor you probably know about Landlord's Insurance, but there's another way to protect your investment, and make sure that you continue to get a good rental return. The trick is to find a great property manager.

There a few characteristics that will help you to tell the difference between a fabulous property manager who will care for your investment, and a nightmare property manager who will cost you a fortune.

Professional and Committed

A really good property manager is not the disgruntled young buck who was recently rejected as a junior sales agent, and now has to see his days out processing rental applications. The best property managers are people who wouldn't have it any other way. They have made a career out of managing property and they have a network of satisfied clients.

Good processes in place for screening tenants

A good property manager has excellent processes in place for making sure that potential tenants are carefully screened. They keep detailed records and they check references.

Conducts regular inspections

A good property manager can tell you how often they will be inspecting your property. They will personally inspect the property at the agreed time and report back to you with any issues. They don't send the receptionist.

Has a maintenance team ready to handle any issues

A good property manager has a team of workers on call in the event that there are emergency repairs or maintenance needed at your property. They believe that it's vital to stay on top of any small issues before they become bigger ones.

Answers your phone calls

A good property manager is approachable and it shouldn't take a week for you to get them on the phone. They care about maintaining a relationship with you because they want to keep your business.

Treats tenants with respect

A good property manager treats tenants with fairness and respect, and understands that happy tenants are more likely to keep the property in good repair, and pay the rent on time. They also know when to do something if a tenant is not keeping up their end of the bargain.

Cares about your property

Most of all, a good property manager cares about you and your property and they will ensure that your investment is protected. By maintaining good rapport with all parties, they will help you to retain good tenants to keep your rental return coming in.

Secure Loans Pty Ltd

29/11/2022

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