Home Loan Results

27/01/2023

With property prices declining in many parts of the country, and many people’s borrowing capacity falling as well, this is a different market than we’ve seen in many years. So here are some important tips around buying, selling and securing finance right now.

Buyers
Buyers are usually the big winners in falling markets, because they generally face less competition and can score better deals.

During downturns, the number of for-sale properties generally rises. Unsurprisingly, then, property listings in December were 4.6% higher than the year before, according to SQM Research. That means now could be a good time for you with more choice and greater chance of securing a bargain.

First-home buyers
If you’re a first-home buyer, you may be able to take advantage of federal and state government housing incentives. Reach out if you’d like me to explain which ones you might qualify for.

Relocators
If you’re moving home – whether you’re upsizing, downsizing or ‘same-sizing’ – think carefully about the order in which you do the two transactions.

In a falling market, it is worth considering selling first (when prices are higher) and buying second (when they’re lower), however keep in mind you may need interim accommodation between the two.

Upsizers
A falling market can be a great time to upsize. That’s because while you have to sell your old home for a certain percentage less, you get to buy your new home for a similar discount. That can lead to an overall ‘profit’, because the dollar saving on buying a dearer larger home is often greater than the dollar loss on selling a cheaper smaller home.

Sellers
If you don’t need to sell, now may not be the best time; instead, it may be better to wait until prices are rising again.

If you do need to sell, it’s vital you price your home accurately. In December, the number of old listings (those that had been on the market for more than 180 days) was 14.3% higher than the year before. Why? Well, according to SQM: "As there remains more sellers than buyers, dwellings on the market that are not priced to market, don’t sell."

Finance
As interest rates have been rising, the average person’s borrowing capacity has been falling. My strong advice is to contact me before you begin your property search, so I can test your borrowing capacity at different lenders (it varies from bank to bank) and organise a pre-approval for you. That way, you will know your budget before you start making offers.

If you’re moving home and want to buy before you sell, I can help organise a bridging loan for you.

17/08/2022

Many clients are asking about what the should do with rising interest rates. This short video from Macquarie gives a good overview of the where we are. Keep in mind, to fix now means you are paying the higher rate from day 1. This needs to be weighed against variable interest rate rises - by how much and how fast?

The equation needs to compare the guaranteed amount of interest paid over the chosen fixed rate period VS interest on the variable rate over the same period (we assume the rate starts lower and will move higher - currently sitting around 1.5% below the fixed).

Understanding where the economy is headed next is key to understanding how to best manage your saving, spending and borrowing - and successfully navigating t...

14/07/2022

“Buy-now-pay-later (BNPL) services are on the rise in Australia, with new research from the Australian Finance Industry Association finding there were almost six million active BNPL accounts in the last financial year.
That’s a massive 1400% increase from 2015 (when there were 400,000 accounts).
But beware.
While BNPL companies aren’t legally recognised as credit providers in Australia, spending via BNPL can affect your credit score.
That's because if you miss your monthly repayments, BNPL companies could place a negative mark on your credit report. In turn, that negative mark could cause issues the next time you apply for credit.”

25/04/2022

02/08/2021

CoreLogic's July Hedonic Home Value Index shows Australian housing values increased a further 1.6% in July, taking values 14.1% higher since January and 16.1% higher over the past 12 months.
CoreLogic's research director, Tim Lawless, described the market as strong, but losing steam.
“The 16.1% lift in national housing values over the past year is the fastest pace of annual growth since February 2004, however the monthly growth rate has been trending lower since March this year when the national index rose 2.8%.”
Mr Lawless attributes the lower rate of growth in housing values to several factors. “With dwelling values rising more in a month than incomes are rising in a year, housing is moving out of reach for many members of the community. Along with declining home affordability, much of the earlier COVID related fiscal support (particularly fiscal support related to housing) has expired. It is however, encouraging to see additional measures being rolled out for households and businesses as the latest COVID outbreak worsens.
“On the flip side, demand is being stocked by record low mortgage rates and the prospect that interest rates will remain low for an extended period of time. Dwelling sales are tracking approximately 40% above the five-year average while active listings remain about -26% below the five-year average. The mismatch between demand and advertised supply remains a key factor placing upwards pressure on housing prices,” Mr Lawless said.

11/07/2021

Property auctions can quickly descend into fast-paced shootouts fuelled by adrenalin and ego as buyers fight for the front door keys. While it might seem daunting, our tips for buying a house at auction could help you be prepared to improve your chances of success.
1. Check out house auctions
Trying to bid on a property at your first auction can be overwhelming, so visit a few as a spectator to get a feel for the atmosphere. You’ll see how the auctioneers operate and can observe the bidding strategies of the buyers. Getting some experience of the real thing will help you understand what’s going on and what to do when you decide to bid.
2. Research the property value
Properties being sold at auctions only state an expected selling range, not a fixed sale price as usually happens in a private sale. This could make it difficult to know if you’re paying too much on auction day.
So do some investigating. Check the recent sold prices for similar properties in the area where you’re looking. Take advantage of our free ANZ Property Profile report , which includes property price information, comparable sales results and sales and rental history, when you’re doing your research.
3. Organise your finances
You need to know how much you can afford to bid. An effective way to do this is to seek pre-approval from your lender. Remember an auction contract is not subject to finance. If you buy, you need to be certain you can get the money to pay.
4. Set your limit
As we’ve explained, if you win the auction, you’re committing to buy the property. If you can’t produce the balance of the purchase price at settlement, you could lose your deposit. However, emotions can run high at an auction. That’s why it’s important to work out how much you can borrow and what you can afford beforehand , so you don’t get carried away and go over your borrowing limits or what you can afford to repay on an ongoing basis.
5. Conduct your inspections
If you're serious about bidding, arrange building and pest inspections before auction day. The reports can estimate how much you might need to spend on repairs and that gives you a clearer idea of how much you can bid. If the inspections uncover serious problems, you may choose not to bid at all.
6. Check the contracts
Send copies of the contracts to your solicitor or conveyancer before the auction. Identifying any legal issues upfront could save you money and future headaches.
7. Register your interest
Depending on which state or territory you're bidding in, you may need to register your intention to bid with the agent. Check with the agent beforehand to confirm any requirements.
8. Make a prior offer
You can generally make an offer before the auction. If your offer is above the reserve price the seller may choose to accept it. More often the seller may just let the market decide the price by going to auction.
9. Bid with your head
Auctions pit potential buyers against each other so competition can be fierce and prices can shoot up quickly. Set your price range based on what you can afford and what you believe the property is worth. Stay calm during the auction and bid within your range. If you think your emotions might get the better of you, bring someone with you to the auction for support.
10. Ask someone to bid for you
If you don’t want the pressure of bidding, you can nominate someone else.
You could pay a buyer’s advocate. As experienced professionals, their job is to stick to your limit and not be intimidated by other bidders’ tactics.
Or you could ask a family member or friend to help. Make sure it’s someone you can trust to bid within your budget. Even if they make the winning bid, you’re the one buying the property.

02/07/2021

Many clients have good incomes, but struggle with budgeting to get the most out of their finances. One solution to consider is the simple 50/30/20 budget.

The 50/30/20 budget is a straight forward way to budget that doesn’t involve confusing budgeting details.

Simply spend 50% of your earnings on your needs, 30% on your wants and the remaining 20% towards savings or to pay off debt. Simple, straight forward and gets results.

01/12/2020

The Reserve Bank of Australia (RBA) has kept the official interest rate at 0.10% following November’s historic cut.

While the RBA board believes Australia’s recession is now over, they want to support the economy’s recovery by holding the rate at its record low.

Speaking after November’s board meeting, RBA governor Philip Lowe revealed that the bank does not expect to increase the official cash rate for at least 3 years.

26/11/2020

The use of buy-now-pay-later services is exploding – and causing some people financial harm.

The number of active buy-now-pay-later (BNPL) accounts increased 38% and transactions jumped 90% between the 2017-18 and 2018-19 financial years, according to a report from ASIC.

ASIC found that 21% of users who were surveyed had missed a payment in the previous 12 months.

Another negative impact is the red flags it can raise during a home loan application. Banks and lenders that see BNPL on your banking statements get nervous about your savings and spending habits. Simply put, lenders might question your ability to budget and live within your means.

All BNPL providers are not looked at the same when you apply for a home loan. Some have higher risk associated with the way they lend money and it can lead to more difficulty with a home loan application.

If you’re going to use BNPL, treat it as a short-term loan that you pay back as quickly as possible.

26/06/2020

First Home Loan Deposit Scheme - On July 1, another 10,000 spots will be made available.

The 27 participating lenders have begun announcing the number of spots they’ve been allocated – and these spots are likely to go fast.

The First Home Loan Deposit Scheme allows eligible buyers to enter the market with just a 5% deposit without having to pay lender’s mortgage insurance (LMI) - a big saving!

Coupled with the stamp duty exemption for First Home Buyers, this means it is possible to get into a home with just your 5% deposit - no stamp duty, no mortgage insurance!

Please call 0414 296 792 to see if you qualify.

16/06/2020

If you are considering drawing $10K of your Super early as allowed with the Covid measures announced, please be aware that the ATO is indicating that Individuals would have had to prove they met at least one of the eligibility requirements, including seeing a reduction in working hours by 20 per cent or more, or seeing a reduction in turnover of 20 per cent or more as a sole trader.
"It is understood that the ATO will indicate that the number of circumstances where they are comfortable with someone dipping into their super and later claiming a concessional tax-deductible contribution will be very limited."
There are many anecdotal instances of people taking $10K now and intending to take another $10k after 1 July to use for purposes other than assist during Covid (such as investment deposit). This could restrict future salary sacrifice opportunities - please seek financial advice if you are considering.

04/06/2020

Latest government scheme to stimulate the economy - Homebuilder! $25,000 grant for renovations/builds. Any interest in pursuing, please feel free to touch base on 0414 296 792. Just need a lazy $150,000 for renovation (and I can help you there too!).