Is buying a property your New Year resolution?

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.

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.

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.

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.

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 time looking at property listings and save days making inspections on homes.

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.

Property 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.

Consolidate your debts for a happier New Year!

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 your 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 would 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.

4 Reasons To Consider Refinancing

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.

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.

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.

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.

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.