Lending Solutions Group

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Lending Solutions Group

Driven by empathy and a genuine desire to help people overcome financial barriers, we are the experts in the mortgage market.

We pride ourselves on our experienced, personalised and rounded level of service. Experienced and highly successful at achieving desired results, we have an extensive network of lenders ranging from banks, non-banks, non-conforming and private lenders. We are a Member of the Mortgage and Finance Association of Australia (MFAA) and the Credit Ombudsman Service. Director Scott Vine has been named Br

oker of the Year (Non-conforming) numerous times and has over 20 years experience in the industry working for the lenders and operating his own business.

07/06/2021

How Do I Pay Off My Mortgage Sooner?

Pay more, more often.
Want to pay off your mortgage early? Then make bigger mortgage repayments, more frequently. You’ll own your own home sooner and save a bundle on interest.
E.g. paying an extra $10 per week on a $350,000 home loan (@7% average) saves nearly two years off your mortgage and $34,382.65 in interested expenses

Act now – you pay most interest up front
Most mortgages are structured so that you pay off most of the interest in the early years. If you are serious about wanting to reduce the interest you pay on your Home Loan, you’ll act now.

Get rid of car loans and credit card debt
You’re generally paying a higher interest rate on small loans (e.g. a car) and your credit cards so it makes sense to eliminate those debts first. So, put a rein on your credit card usage and then tackle your mortgage.

Make sure you’re paying off the right mortgage
When you entered the mortgage market, you might not have been as well informed as you are now. Or the market might not have been as competitive. Stay in close contact with with us to stay informed you have the right loan. I can can let you know if there is a new home loan product that will save you money over the term of the mortgage.

Flexible mortgages
Most debt-retirement strategies depend on you being able to pay off more of your mortgage sooner. Read the fine print or talk to us to see if you have the flexibility you need to reduce your interest charges.

Pay more and pay often
Assuming you have a mortgage that lets you pay extra, you should pay more and pay often. The interest charged on a $ 300,000 home loan at a rate of 7.15% over 30 years with monthly repayments is over $420,000. By paying off an additional $50 a month, you’ll reduce the interest bill by $39,000 and your loan term by 2 years and 4 months. You could look at making repayments weekly or fortnightly rather than monthly. Over 30 years the savings add up. To learn more, talk to us today today.

Information source: MFAA

04/06/2021

How To Make An Offer In Writing To Buy A Property

Here is an email template you can use to make an offer on a property you are interested in buying.

======EMAIL OFFER TEMPLATE======

To whom it may concern,

I would like to make an offer on _______St ______ for $……………………………..

My preferred settlement time would be ……………… Weeks.

This offer is subject to finance approval, my solicitor reviewing the contract and any Strata reports and or building and pest inspections I may carry out.

======= EMAIL OFFER TEMPLATE======

Best of luck... and if you need any ideas on finance, 2nd opinion or a pre-approval to go shopping... message me today for a complimentary chat.

02/06/2021

Spend 10 minutes on the phone with me to see if you could save $250 or more per month OFF your home loan repayments.

Private message me now for a free loan comparison!

31/05/2021

Prevent A Nasty Property Surprise

[Educational Blog Status Update]:

HOMEBUYERS and real estate investors are being warned to watch out for the hidden traps that may be lurking in their potential purchases.

Leaky showers, cracked ceilings and self-opening doors and among the signs pointing to bigger and more costly “nasty surprises”, the Association of Building Consultants says.

Spokesman Chris Short says understanding a building’s condition and the likelihood of future repairs is vital when assessing a property purchase and managing a mortgage.

“Many homes are tidied up for sale, with the pre-sale spruce ranging from a basic clean through to bogging cracks, repainting, retiling and re-grouting, and even new floor coverings,” Short says.
“The makeover might look good, but it also masks what might be more sinister problems such as termite damage, salt damp, structural issues, unlicensed and dangerous electrical work, and more.
“For example, a leaky shower might seem harmless on the surface but if the leak is allowing water to flow into the soil next to your home, it’s likely to attract termites.”

Short says building inspections can be particularly valuable for investors who will not be living in the property they buy.

“You need to know it well so that you’re clear about urgent maintenance requirements to meet your obligations as a landlord – such as ensuring smoke alarms are hardwired – and the cost of long-term maintenance,” he says.

Property academic and author Peter Koulizos says beginners should always consider a building inspection.

He adds to make sure the report is a written one, rather than a verbal agreement.
“Some of my students have been able to negotiate the contract down by the repair amount or they have just pulled out,” he says.

Koulizos says when entering any property, potential buyers should take in a deep breath.
“If there is a musty smell, it’s a sign of salt damp,” he says.

Another thing to check is the perimeter of the house and make sure there are paths surrounding it.
“You can minimise cracking by keeping the moisture content of the soil fairly constant,” Koulizos says. “Paths around homes are not just there for decoration.”

HIDING A BIGGER PROBLEM?

* Cracks in ceilings and walls are hallmarks of footings sinking or rising, which causes the walls to flex.
* Other signs are doors out of square in their frames, self-closing and self-opening doors.
* Leaking hot water services, rainwater tanks and airconditioning pipes can create moisture that attracts termites.
* New floor tiles installed over old tiles can trap moisture between the tile layers.
* Cracked tiles and mould at the shower base and plaster bubbling on the wall in the room next to the bathroom are also signs of moisture.
* Any repair work to the building’s paths can provide an entry point for termites.

Source: Association of Building Consultants

28/05/2021

What's A Better Strategy To Access Equity: Take Out A Line Of Credit Or Just Top Up A Loan?

[Long Blog Educational Status Update]:

Lines of credit can be very useful; however, you need to be careful regarding an evergreen set-up in which no repayments are needed and the interest is added on to the loan.

Years ago that was a sound strategy for increasing your tax deductible debt. This has been a very contentious subject with the ATO (and many court rulings), and my advice would be to stay away from such a strategy or ensure you seek expert advice from a tax expert that may require a private ruling to ensure you stay on the right side if you are seeking to capitalise the interest.

If you are looking to access equity from your home, it is never a good idea to top up the loan for investment purposes.

The reason is that you are mixing together investment debt with personal debt.
As an example, if you had an $80,000 home loan and you took out a $20,000 investment loan, your total single loan amount would be $100,000. This would equate to a ratio of 80% personal debt to 20% investment debt.

The challenge is that if you wanted to make accelerated repayments onto your home loan you would simultaneously be wiping out your investment debt.

This would mean that every time you made a $1,000 principal repayment (not taking into account the interest portion charged) you would be – staying with the example of 80/20 – reducing your home loan by $ 800 but also wiping out $ 200 of the investment debt.

Why is this bad?

Well, if you had a home loan for $100,000 and an investment loan of $100,000, it would make sense to discard the home loan first since it is not tax deductible.
A great set-up would be to have both loans as interest only.

Attach a 100% offset account against the home loan and drive all of your extra income into the offset account to eliminate interest repayments on your home loan. This also gives you the choice (should you ever move out of your home) to take all of the money out of the offset account and buy a new home, and instantly the entire interest is charged again against your old home, making it now tax deductible. It is never a clever idea to top up your home loan for investment purposes.

A better strategy:

So how do you get around this without using your home as security against a new investment purchase?

It’s simple: you apply for a separate loan against your home.
Using the previous example, you would leave your $80,000 home loan in place and apply for a separate loan of $20,000 for investment purposes.

This also makes accounting very simple because now you know which loan is for investment purposes and what to provide to your accountant at tax time.

If you are accessing equity from a property that you are already renting out, meaning that the existing loan is already tax deductible, it is still a good idea to use a split loan.

From an accounting perspective it makes it easier to know which expenses belong to which property.

This serves a number of purposes. From a business point of view, you can review your properties and work out what their holding costs are and their overall performance.

Also, if you decide to sell any of your properties, you know which loans belong to which property and you can make a choice to either wipe out those loans or, from the sale, reduce one of the smaller loans to zero without paying it out, providing you with redraw capability should you wish to buy again (effectively turning that loan into a line of credit type function).

Using line of credit:

Line of credit loans, in my view, are a good tool for two reasons.

Firstly, they are great to have as a buffer. In cases of emergency repairs, etc., there is instant access to funds to assist you.

Secondly, they provide instant access to cash, should there be a property-buying opportunity and you require funds quickly for a 10% deposit.

The negative aspect of a line of credit is that it can be more expensive than a normal investment loan. There can also be a negative impact on your borrowing power if you have a large line of credit. This is because a line of credit is like a gigantic credit card with a limit.

Let’s say you have a $200,000 line of credit with zero owing.

Lenders, at the time of an application for new finance, will consider repayments as if the entire line of credit is drawn, therefore drastically diminishing your capacity to borrow. This could mean the difference between being approved or declined for finance.

A balanced approach is needed: a line of credit limit that takes into account your income and expenses position, leaving sufficient surplus funds from your monthly income (assuming your line of credit is fully drawn) to ensure a fresh loan application would be successful. A competent banker or broker can assist in calculating various scenarios to ensure your strategy works for you.

One way to get around a line of credit is to simply take out a normal interest-only investment loan. For example, instead of taking out an $80,000 line of credit, apply for a cheap, no-frills investment loan.

Once the money is available to you, simply transfer the $80,000 onto the loan, reducing the balance to zero.

No interest is charged, and, if you require funds, simply use redraw for access. This way you have a low-cost loan with a line of credit functionality.

All these matters require forward thinking and planning. Take into account your overall goal and strategy. Devise a plan and then research the finance market, or seek expert advice to ensure that not only can you execute your plan today but you don’t get stuck at your next intended property purchase due to poor research, planning and ex*****on.

26/05/2021

Looking to invest in property to create wealth, security & freedom?

Sometimes you need to be creative to find the right solution!
Private message me to set up a meeting to explore your options.
(we'll cover your borrowing capacity, loan structuring, property options, repayment options, rates etc)

24/05/2021

Why do banks and agents value your home differently?

Have you ever wondered why your lender will give you one value for a house while the real estate agent has said something completely different?

How do you know the real value of a property when everyone is giving different quotes?

The difference in the two valuations is due to the lender and the agent assessing different aspects of the property’s value – the lender is looking at how much to comfortably lend you in relation to the cost of the property, while the agent is looking for a sale price.

Bank valuations vs market valuation
The property’s market value is the estimated amount for which the property should fetch on the date of valuation, assuming a buyer and seller were to enter willingly into a sales transaction. The bank valuation is the amount that the lender is prepared to lend against the property.

How is the bank valuation made?
The bank or lender appoints a valuer to independently verify the value of the property. As the property is the asset providing security for the loan, the bank valuation generally tends to be more subjective and conservative, to protect the lender financially in case you cannot pay your mortgage and the property must be sold to cover your debt. While the bank valuation is based on extensive research into comparable properties, it will be lowered when the buyer is borrowing more – this is a way for the bank to balance its risk. The bank’s valuer can potentially be held liable if the bank suffers financial loss, so they prefer to make a safer more conservative estimate. The valuer can also advise the bank to refuse the finance application if they believe the buyer has paid too much for the property.

Not happy with the bank valuation?
If you are dissatisfied with the bank valuation of your chosen property, you have two options – request a reassessment of the valuation; or cancel your finance application and start again with another lender. The bank will only do a reassessment if you can provide evidence that comparable properties reflect a higher value than their valuation.

You should also check that the market valuation reflects the true market price of a comparable property, as you may find that the seller has overpriced the property. You can hire an independent valuation company to make a market valuation of the property.

How is the market appraisal made?
The market opinion is assessed by a real estate agent, and establishes the asking price for the home. The agent has a different agenda than the bank’s representative – they want to value the property to achieve the highest possible price in the sale. However, they do need to work realistically within the parameters of recent sales and real estate activity in the area. The vendor can receive valuations from several agents when deciding which agent to appoint to sell the property.

Whether you are buying or selling, contact us today if you want independent advice about your property.

21/05/2021

🚫 Top Property Investment Mistakes

1. Emotional investment
When you are choosing an investment property, there is no such thing as “love at first sight.” If you make an emotional investment before you have done your research into the location and the rental potential, you are at risk of making an extremely expensive mistake. Investors who let emotion rule their decision-making are far more likely to over-capitalise from the beginning, making it even more challenging to ensure your long term investment will be profitable.
Your investment purchase decision should be based on thorough research into the long term profitability of the location and the specific property.

2. Lack of planning
Any long term investment strategy requires specific goals and a realistic strategy in order to be successful. Without a clear plan, you will not have any sense of direction, and this could leave you struggling to maintain your financial commitments and missing profitable opportunities.

3. Get rich quick attitude
If you are looking for a quick turn-around or a fast profit, the real estate is not the investment strategy for you. Shares and other asset classes can have an unpredictable value, property is a long term investment.

Real estate is a long term investment because it takes time for a property to increase in value and there are numerous additional costs involved in buying and selling a property. The value of property lies in its long term security and lack of volatility.

4. Poor cashflow management
Your property may not generate enough income to cover the cost of maintenance, rates, taxes and management fees, particularly in the beginning so you will need a comprehensive budgeting plan and a long term strategy to ensure you always have the cash flow to maintain the property.

When you are planning to purchase an investment property, a good rule of thumb is to budget an additional 10% of the property’s value to cover costs until the property becomes more self-sufficient.

5. Misinterpreting the market
Many inexperienced property investors fail to ask the most essential question of all – is this property an appealing rental prospect? Do some research into the local area and find out what types of properties are in demand for tenants, and what types of tenants you will attract.

Check out the property at different times of the day to see if there are any glaring issues that may drive tenants to leave as soon as their lease expires – noisy neighbours, heavy traffic, or just an inconvenient commute to the local shops could make it difficult to rent out the property in the long term. You should also calculate the average rent in the area to see how it will cover your costs.

6. Lack of delegation
You might think a DIY approach to property management will save you money, but remember your time is valuable as well. Consider all the jobs a property manager handles – finding new tenants, conducting regular inspections, collecting rent, and managing any emergency maintenance issues. A property manager also deals with any legal issues relating to the rental property and will represent you at a tribunal if necessary. This person is an invaluable asset, and gives you the opportunity to expand your property investment portfolio with more properties, knowing you can delegate all property management issues to a full time expert.

19/05/2021

🧐 Top tips for young property investors

It is possible for people to launch into the property investment market in their early twenties – in fact, this is a great time to start, when you are first launching into your career and don’t yet have any other financial responsibilities such as a family to support.

However, buying an investment property can never be an impulse decision – it takes self-discipline and applied knowledge to start building a profitable investment property portfolio.

Set a budget and save
The first step of course is to start saving for your first deposit, which is usually at least 20% of the purchase price (can be lower, check with your broker). You will need to be focused and realistic, and quite single minded in order to save a sufficient amount. Your best option is to set a budget and create a clear financial plan that will help you remain focused and prepared once you do buy your first property.

Think long term
While some of your peers will be looking into short term gratification – visiting pubs and night clubs, booking overseas holidays or buying a new car - you need to establish a mind-set that focuses on the long term rewards of building your investment portfolio.

Learn from the experts
While you are saving your deposit, take this time to educate yourself about the property investment market and the best type of property for your first investment. Read articles about property investment and monitor the real estate section of your local newspaper, so you can build a vision of an affordable and profitable investment property. Consult local agents and mortgage brokers as soon as possible so they can offer their insight into the market. Seek advice from a professional accountant, who can oversee your savings plan and advise you on your first home loan.

Consider a family guarantee
If you have the option, you could ask a family member to act as guarantor of your bank loan. The guarantor allows the equity in their property to act as additional security for your home loan. This strategy could potentially reduce the amount of deposit you need to save. You can split the loan into two portions, so your guarantor is only guaranteeing one portion of the loan. That way, you can pay off that portion first, so you can release your guarantor from the agreement as soon as possible.

Invest, don’t gamble
Gambling is a game of chance where you can hope to win big but you are perhaps more likely to lose it all. Investment is based on knowledge and experience, so you make decisions that will be profitable in the long term. Learn everything you can about the property and the market, so you can make objective, beneficial decisions.

17/05/2021

Which is better?

Plan A - Buy a home
Or
Plan B - Buy an investment property and rent

Address

Level 1, 39 Hall Street
Moonee Ponds, VIC
3039

Website

http://www.lendingsolutionsgroup.com.au/

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