With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. Investment in real property, such as residential real estate, is likely to be a process requiring great consideration and thought, and one that usually involves a plan for the long term. To ensure you have considered what is required before making the big purchase, we’ve outlined a few steps you might want to take in that process.
1. Make the commitment A property investment must be a long term commitment in order for it to be worthwhile, so the very first step is to ‘do the numbers’ in order to evaluate your budget, potential constraints and future financial and personal obligations including the potential impact on family members. “Consider your future as far ahead as you can,” said one of my industry colleagues. “You need to assess your ability to maintain or improve personal income as well as your commitment and ongoing financial capability to continue to service the financial impact of the investment for a minimum of five to ten years, as that’s what generally brings premium results.” You need to also make the commitment to ‘manage’ the investment – even if you outsource the day-to-day tasks involved including locating suitable tenants, collecting rents, paying relevant costs in rates and taxes as well as ensuring that the property’s repairs and maintenance are kept up to date. In short, make sure you have a great property manager! 2. Obtain Professional advice You now need to obtain professional advice. An investment in real estate is likely to be significant in relation to your current financial position. If you have already discussed the investment with a licensed financial planner or investment adviser and residential real estate is considered the most appropriate in your current circumstances, you will have considered aspects including rental return, maximum capital growth and/or tax effectiveness. 3. Get help with finding that right property if you need it! You next need to locate a suitable property. There are buyers agents now available who can assist you in this process – potentially saving you money by disregarding inappropriate properties and concentrating on those that are more likely to deliver the highest return and capital increase to you over time. A good buyers agent will negotiate with the agent on your behalf (who doesn't love that!), as well as terms, and assist with final inspections and the like. 4. Consider the equity you will contribute Following that, unless you have cash or other investments that can be converted to cash to make your property investment, the next step is to contact a mortgage broker to help you to secure finance to enable purchase. This will give you the opportunity to ask the broker as many questions needed to alleviate any uncertainty you may have about securing that finance, and make sure that the proposal is balanced, and suitable to your needs, along with making sure that your finances are in order to support the proposal. 5. Have your team sorted! Using the services of a mortgage broker, accountant, financial planner, solicitor/conveyancer and property manager on your team will also assist you in coming to your decision, and to make sure the decision, is a good one for the longer term. And, if you don't know where to start with this, we do, reach out! 6. Assistance from relatives & friends Talking to friends, family and acquaintances who have already made such an investment, or are currently considering one, can help your awareness of stumbling blocks and potential issues that you might otherwise miss. While any issues you face may seem new, it can help to bounce these off a trusted friend or relative who has been there before. 7. Collate your information In order to apply for finance, you will need proof of your current income, employment and your assets as well as all liabilities including debts, loans, rental payment, outstanding credit card obligations and any other due payments, for example, buy now pay later commitments. Collate these and also any paperwork that helps support your personal position. For example, if you have been a long-term tenant, get a 12-month tenancy statement that proves your capacity to make regular repayments. Before applying for a loan, minimise your current debt load, and if possible, reduce the limit on, or cancel any credit cards you have, as this is perceived by lenders as potential for debt. It is strongly recommended that you have a fully assessed pre-approval before you start your search. This will allow you to know what your financial limits are so that you can make an offer when you’ve found a property you like. 8. Other things to consider An investment property purchase should not be an emotional decision. It is a business decision. Consider the property's appeal to the type of individual who wants to reside in the area, and speak to a reputable property manager to find out what kind of properties are the most sought after, and accordingly rental yield the greatest results in the area you are looking for. Interested to know more? Feel free to reach out, book a meeting and let's chat (because I am home all the time... and I miss people, any excuse will do!) With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. Breakups are hard.
Yep, you heard it, I am breaking up. With my bank. The bank may think it’s me, but, I know it is the bank. No bias intended, but I know. I was going to explain to the bank where they went wrong, and there were a few things I could have mentioned, but I need to be out of the relationship now, and I need to focus on me, and not them. It’s time for a clean break. You see, they are stuck in their ways, their communication is not great, and I need to feel appreciated, not just when things are good and the sun is shining! When the idea crystalised, to be honest, I was a little put out. On reflection, I feel like my bank and I have been circling around this for a long time, and perhaps I have been a little distracted with life and goals, and parking it in the too hard basket… maybe even a little procrastination, reflecting on the good times we have had. But, the time is now, and I need to be kind (thanks Matthew Hussey). We are not going to argue about this, I won't be baited with sweeteners, incentives, short term waiver of fees, after all is done, let’s not be angry with each other. I don’t need to come out of this being liked, it’s business! I don’t want to give the bank hope, and I need to make a clean break, my ego doesn’t need to keep the connection. No, I am not going to buy into your cushy and cute marketing campaigns, the pretty colours, or the short-lived attention! And no, there is no reconciliation in the forward view. Now, in all seriousness, I should have looked this in the eye sooner. The truth is, while I was focussed on forward progress, my finances really needed some housekeeping, and I should have attended to this sooner, as my forward goals might have progressed even faster, if the engine was running smoother! You see, the car is your finances, and how well it runs determines how efficiently you get from where you are now, to where you want to be, and beyond. So, let’s start looking at our finances, our banking relationships, more like financial transactions. Make sure that you are getting what you need out of the relationship, and assessing more often, and making the cut, the call, without emotion, if you are not getting what you want and need. Ring me for a chat, let’s talk about your bank, and let’s keep you progressing, making sure you are getting everything you need out of your banking relationship, not just your bank getting what it needs! So, call me, I am getting good at breakups, and I am happy to share! 😂 The Australian government has announced an additional 10,000 First Home Loan Deposit Scheme places to be provided in the coming months!
This is a massive boost to first home buyers and will help save them tens of thousands in LMI and reduce the amount of deposit needed to buy their first home. Read more: http://ow.ly/8NMD50BKiTD The last two rounds offered this year were all filled up so better hurry! Are you a First Home Buyer, or know a First Home Buyer we can help? We can help get you into your new home faster, so let's have a chat! Financial markets have been anticipating a 50% chance of the Reserve Bank of Australia cutting the official interest rates even further this year. It didn’t happen today, as the Reserve Bank of Australia has decided to keep interest rates on hold. It remains at the record low of 0.25%.
Federal Budget What economic measures will be taken to deal with the downturn caused by COVID-19 will be known after tonight’s Budget announcement. It is expected to include a number of measures aimed at both households and businesses in order to encourage them to spend and invest. Tax cuts Income tax cuts are expected to be front and centre. The government will bring forward tax cuts that were to start in mid-2022 – they will now start in July this year. Under the proposal, the top threshold of the 19% tax bracket will rise to $45,000 and the top threshold of the 32.5% bracket will rise from $90,000 to $120,000. What does this mean for the average Australian? For workers earning around $50,000 a year, the $1080 per annum tax cut that was scheduled for 2022 will be brought forward. Furthermore, this cut will be backdated to this financial year, beginning from July. They should see around an extra $30 in their pockets by December. For those earning $120,000 or more, the tax cut will be worth up to $70 a week until July 1, 2021. The maximum tax cut of $2500 in 2022 will provide around $50 a week but will be increased for the remaining weeks of the financial year. The government hopes this will encourage spending in the lead-up to Christmas, and therefore turbocharge the Australia economy. Business boost The government is also expected to offer businesses some relief. It’s not clear exactly what will be announced this evening, but is predicted to include asset write-offs and a cut to the corporate tax rate. These and other announcements, combined with the record low interest rate, should be good news for mortgage holders. If you have any questions, please don’t hesitate to contact us. Considering refinancing is a great opportunity to secure a better interest rate to your existing home loan. It can be a bit of a process, so it's best to understand a little more before jumping in... having said that, it is often well worth the hoops!
Here's a step-by-step guide to get your refinancing sorted: Step 1: Understand the need to refinance and the most common reasons for refinancing:
Knowing your 'why' makes it easier to find a new loan that fits you best. Step 2: Home loan options comparison When considering refinancing, you want to make sure you're shifting to the best new loan for the reasons that are most important to you. Make sure to seek guidance and direction in terms of the rate and features to ensure you have considered all of the important elements. You can speak with a mortgage broker, talk to lenders, or check out some comparison sites to be sure you're comfortable with your choice before you apply or transfer your home loan. Make sure to seek details regarding the conditions of your loan, features added and removed, or how long the settlement will take when refinancing. Step 3: Crunch the numbers Refinancing comes with a variety of costs. There are upfront fees to the new loan, exit fees to the old loan, and mortgage registration fees to the government, and they all need to be considered into the viability and feasibility of the proposed changes. Keep in mind that your new loan term will likely start all over again. Make sure to calculate exactly the amount of interest you can expect with your new loan and compare with your current loan to know if it's worth it to refinance. Once you have all the figures, sum it all up to be sure that refinancing outweighs all costs. Step 4: Applying for a new loan Refinancing your existing loan will mean completing paperwork just like your current loan. You will need to provide a proof of income such as payslips and your IDs. Step 5: Valuation Make sure you understand how the valuation works because in refinancing, the new lender will want to value your home. Make sure to spruce things up before assessment as there are lots of small things you can do to maximise your property's market value. Step 6: Loan approval Formal loan documents will be drafted and forwarded to you for signing once your application is approved. Be keen and read the paperwork carefully and don't hesitate to speak with your mortgage broker if you have any questions, they'd love to chat! Step 7: Settlement On the settlement day, your new lender will receive the title deeds to your home, which was previously held by your old lender. All you have to do is enjoy your new loan! With these refinancing tips, you could be in your new loan within 4 to 6 weeks! Interested to know more about refinancing and don't want to worry about all the finer detail, and want an expert to look after it all at no cost to you? Feel free to reach out, book a meeting and let's chat, it's what we are good at(because I am home all the time... and I miss people, any excuse will do!) With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. Considering transforming your home from ‘blah’ to ‘brilliant’, but lack the funds to support your makeover? Never fear, we’ve rounded up five home renovation finance options that could help turn your dream into reality.
1 Equity Release / Top Up Home Loan This is probably the most common way people borrow money when they want to renovate. It involves borrowing against the current value of your home, before any value-adding renovations and in most cases allows you to obtain the funds upfront. You won’t be able to borrow the full value of your home but, without mortgage insurance, you can usually borrow up to 80 per cent of its value if you own it outright....It may be worth considering Lenders Mortgage Insurance however, if you can see that the renovations are going to achieve you great return on lifestyle, and / or investment! Equity is key! 2 Construction loan If you're planning to completely transform your home and undergo a major makeover, this may be a good option as you can spread the cost over a long period of time. You could even possibly borrow up to 90 per cent of the end value of your home and take advantage of mortgage rates which tend to be lower than credit card and personal loan rates. With a construction lending, the lender will assess the value of your home after the renovation based on the building plans and you can typically borrow against that value. You won’t be given the full loan amount upfront, but usually in staggered amounts over a period of time – this is called ‘progress payments’ and is linked to a fixed price building contract which will be from your builder. 3 Line of credit When you apply, you can establish a revolving credit line that you can access whenever you want to up to your approved limit. You only pay interest on the funds you use and, as you pay off your balance, you can re-borrow the unused funds without reapplying if that becomes necessary. However, care must be taken not to get in over your head in terms of serviceability and to make sure that you are actually paying off over the loan, which is not necessarily a feature of a line of credit. Rates on this product are typically much higher than a construction loan or top up loan so we want to make sure that there are no other, perhaps more suitable options for you, and that this really is the right product for you! This product feature is great if managed well, but can also be a trap if not seriously considered as your limit will never change. 4 Personal loan If you’re only making minor renovations – personal loans are usually capped at around $30,000 – this might be suitable, but interest rates on personal loans are higher than on home equity loans and payments need to be made usually over a maximum of seven years.... certainly worth looking at a new valuation to the home after the renovations are completed, as we might be able to consolidate that lending for you, and rates probably half that of the personal loan! 5 Credit cards This option should only be considered if you want to undertake really small renovation projects. The interest rates are usually much higher than on mortgages, but for a very small project, that extra interest might actually total less than loan establishment fees. Sometimes, this can be a more cost effective option than increasing, or taking a loan with Lenders Mortgage Insurance, but careful consideration needs to be taken to ensure you understand the pros and cons of this approach, and that you prioritise paying off that credit card FAST! *HomeBuilder If you’re looking for further assistance to be able to afford your property renovation project, the Federal Government recently announced $25,000 grants for eligible Australian owner-occupiers to build a new home or substantially renovate an existing home. The Government’s HomeBuilder package is designed to assist the residential construction market by encouraging the commencement of new home builds and renovations. Income and other conditions apply and this grants program is active until 31 December 2020. For more information visit the Treasury website. One thing you must do! There are very few exceptions to the rule that your renovations should add more value to your home than they will cost to carry out. Think about how the money you spend on a renovation will increase the value of your property. For example, consider making changes that would appeal to the majority of potential buyers to help you sell your house faster and at a higher price. Interested to know more in any of these? Feel free to reach out, book a meeting and let's chat (because I am home all the time... and I miss people, any excuse will do!) While some view LMI as being exclusively beneficial for lenders, we explore the value for first home buyers.
Not to be confused with mortgage protection insurance (which is designed to protect the borrower), LMI is insurance that covers the lender’s risk within a residential mortgage transaction should the loan go into arrears and the borrower is unable to resolve the situation satisfactorily. LMI is a fairly common practice within the industry, particularly for new home buyers who may struggle to save a deposit. It allows an additional fee to be paid by the borrower and usually applies when the loan is more than 80 percent of the purchase property’s price. The purpose of LMI is to ensure security for the lender in case the borrower fails to make loan repayments. Even though the actual house acts as security, the nature of the property market, like any investment class, means there is a chance that its value could decline, resulting in a financial loss for the lender. The cost of the premium is dependent on several factors, such as the loan size and property value, and most insurers are flexible when it comes to the method of payment. It generally equates to around 2-3% of the value of the property you are buying, and given it is a one-off, then it often means you can get into the market sooner. It can either be a one-off upfront premium payment or that premium could be included in the overall cost of the loan and included in monthly repayments. It is not transferable, which means a new loan may require a new fee depending on how much equity the borrower has. What’s in it for me? While it may appear that it is exclusively favourable to the lender, there is value to borrowers in paying the premium. Opting for LMI means it allows a borrower to independently purchase a property sooner than they otherwise might. LMI is the alternative to using a guarantor or having to save for a bigger deposit, both of which are not feasible options for many first home buyers. A deposit of at least 20 percent of the desired loan amount is required for a borrower not to be deemed ‘high-risk’. If you consider that the average price of a home in Sydney is $650,000, that would mean a deposit of around $130,000 is required. The beauty of LMI is that it buys time, which means borrowers with smaller deposits are able to enter the market sooner rather than later. The major benefit of LMI is that it allows the dream of home ownership to become a reality for a lot of first home buyers. To see if this is the case for you, book a meeting and let us help you! With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. COVID-19 has been it is fair to say, like a really bad B Grade movie with George Clooney nowhere to be seen. At this point, I would even be prepared to give some opportunity to Tom Cruise (sorry Nic) to save the day, but there have been some saving graces amongst all that 2020 has been so far!
1. Refinancing With the low-interest rates, banks at this point are competing hard for customers. A different lender may offer you better features on your loan that you couldn’t get previously, like an offset account, additional repayment and redraw facilities, an interest-only option or a fixed or split-interest option... with rates just above 2%, there are some serious savings to be had if you are able to consider refinancing. If your current lender can’t offer you what you want, it's worth looking for mortgage options that do, and at the best possible rate! 2. First Home Buyer Grant There are a number of select lenders that have been provided quota for the 10,000 Scheme places for the 2020-2021 financial year, and we can assist by guiding you through your lender options, and their respective process, to achieve the best outcome possible.... we are seeing amongst the challenges of 2020, some really exciting outcomes for our First Home Buyers, some of who are really embracing Digital Inspections to achieve some fabulous outcomes! You could be in your first home with as little as 5 percent deposit with the scheme, and if you have a gift from family, and are currently renting which is a substitute for demonstrating your genuine savings, it could be even less. 3. HomeBuilder Grant The Australian government announced HomeBuilder: a $700M housing package for Australians to access $25k grants for building a new home or substantially renovate an existing home. This is available to eligible owner-occupiers including first home buyers and is a time-limited, tax-free grant program to help the residential construction market to get through the Coronavirus pandemic by encouraging the building of a new home and renovations this year... there is more information to be released, so hang on tight, this could be good! 👏🏻 4. Lesser Lenders Mortgage Insurance St. George Bank / Bank of Melbourne announced that their Lenders Mortgage Insurance (LMI) is reduced to $1.00 during the application stage to help their clients into their own home sooner for those with a loan to valuation ratio (loan / purchase price) of 85% or below. From 13 July 2020, St.George Bank is offering to let first home buyers who are borrowing up to $850,000 for a property worth up to $1 million take out LMI for the sum of just $1. This was introduced to account for how Australian first home buyers are re-evaluating their homeownership plans following the COVID-19 pandemic. Interested to know more in any of these trends? Feel free to reach out, book a meeting and let's chat (because I am home all the time... and I miss people, any excuse will do!) With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. With official interest rates trending downward, shrewd mortgage holders may take the opportunity to call their lender to ask for a better deal.
But when even a small interest rate reduction means potential savings of thousands of dollars, is a simple phone call enough to get you there? In 2020, ‘your interest rate should have a two in front of it’, is common advice for homeowners considering the competitiveness of their loan settings. But while a number of lenders offer lower rates to new customers, it’s not always so simple for existing customers to secure the same outcome. A leading mortgage and finance broker says that if people want a better deal on their mortgage, there are two options: 1. Call your bank and ask them to match the new rate, or 2. Contact your broker and vote with your feet. And although the first option is commonly recommended, lenders aren’t always so obliging when it comes to rate-matching to get you a more affordable mortgage. As an existing client, it can be disheartening to see your bank offer new customers a lower rate to the one you currently have. Lenders regularly try to ‘win’ new customers by offering low rates. It is a great acquisition strategy. But if they refuse to match your current rate to this new offer, you can always contact a broker and refinance with a lender who is hungry to win your business. Mortgage brokers, on average, have access to a panel of 30-40 lenders and this creates opportunity for competition amongst lenders. Mortgage brokers are also in a position to offer you a more in-depth and customised level of service. This can allow them to find their customers a mortgage product that may suit their current needs, wants and circumstances. Want to know more? There is so much to know, and understand... want to get into the driver’s seat and take control of your financial future? Let's have a chat to find out more!
I wanted to take a minute to appreciate and celebrate my birthday here on the blog :)
I had a little cake... looks like the start of a bush fire, but... CAKE!!!!
When the team take my birthday to the next level and surprise me with this!!! ??????
Super happy to be 21.... again!!!
On Monday, 27 July it was announced by NSW Premier Gladys Berejiklian, that from 1 August, the NSW state government will temporarily axe stamp duty for first home buyers purchasing newly built homes that are valued at under $800,000 (up from the previous limit of $650,000).
This is to support approximately 6,000 first home buyers plus boosting the construction industry. This move will surely help in creating jobs amid the COVID-19 crisis. The state government will also raise the threshold for stamp duty on vacant land. The adjustments will last for 12 months and only applies to first home buyers purchasing newly built homes and vacant land. Estimate from the federal government would be approximately 27,000 grants across $10 billion building projects, supporting 140,000 direct jobs and 1,000,000 related jobs. Interested to find out more? Let's have a chat! With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. Reviewing your lending, particularly in the year that has been thus far could be ideal means to minimize expenses, boost savings, and provide you financial parachute fund at a time of uncertainty such as the current. This could save you some money or even make money, depending on your strategy,and importantly, could help you sleep a little better at night to know that you have your finances under control, and have a contingency plan in place.
Tips: Consider asking what features you really need, and those you perhaps don't which could save you thousands! The official cash rate is at its lowest ever in 60 years and interest rates are at an all-time low. Your current rate may not be the most competitive at this point even if your mortgage is just over two years old. A very slight rate change could trim your monthly repayments instantly, improving your liquidity in these times of financial stress. Banks at this point are competing for customers. A different lender may offer you better features on your loan that you couldn’t get previously, like an offset account, additional repayment and redraw facilities, an interest-only option or a fixed or split-interest option. If your current lender can’t offer you what you want, it's worth looking for mortgage options that do, and at the best possible rate! Shorter loan terms If you have a steady income despite the COVID-19 crisis, this may be the best time to refinance to a lower interest that could pay off your loan faster with the same repayments. With refinancing, you can switch to a mortgage option with a shorter term, maintaining the same repayment amount. Debt consolidation If you're currently juggling a lot of non-mortgage debts, making it hard to pay, manage and track bills and payments, you might want to consider consolidating payments. If you bundle multiple payments into your home loan, you'll have a clearer timeline on when you can be debt-free, plus you might have lower interest rates than other rates like credit card loans. Refinancing costs Despite the benefits, there may be costs involved in refinancing, depending on your loan and lender. Example costs and fees could be exit fees, government charges, or Lenders Mortgage Insurance. It is best to consider getting a piece of advice from a mortgage broker if you plan to refinance. At Get Smart Financial, we can help you with refinancing, so you can save more, and make the odds be in your favor. Book a meeting so we can discuss! With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. With interest rates at an all-time low, and many lender’s fixed rates lower than their variable options, locking in an interest rate on your home loan to guard against possible future fluctuation may be attractive. However, it pays to know the ins and outs of fixed-rate loans before committing to one.
When purchasing a property, refinancing, or just renegotiating with your current lender, borrowers can generally decide between fixed-interest loans that maintain the same interest rate over a specific period, or variable-rate loans that charge interest according to market rate fluctuations. Fixed-rate loans usually come with a few conditions: borrowers may be restricted to maximum payments during the fixed term and can face hefty break fees for paying off the loan early, selling the property, or switching to variable interest during the fixed-rate period. However, locking in the interest rate on your home loan can offer stability. For those conscious of a budget and who want to take a medium-to-long-term position on a fixed rate, they can protect themselves from the volatility of potential rate movement. Fixed rates are locked in for an amount of time that is prearranged between you and your lender. Some lenders that offer seven-year or 10-year fixed terms, but generally one to five years are the most popular. The three and five-year terms are generally the most popular for customers because a lot can change in that time. Further to this, fixed-rate loans can also be pre-approved. This means that you can apply for the fixed-rate loan before you find the property you want to buy. When you apply for a fixed rate, you can pay a fixed rate lock-in fee also known as a ‘rate lock’, which will, depending on the lender, give you between 60 and 90 days from the time of application to settle the loan at that fixed rate. With some providers, this fixed rate lock in may be free, such as with Adelaide Bank or Macquarie Bank. With other providers, the fee could range between 0.12% of the loan amount or more, or a flat fee of anywhere between $350-$750. If this is an important feature for you, then the cost of the fixed lock in should absolutely be factored into your understanding of what the proposal will cost you all things considered. It will also depend on the lender as to whether the rate lock will be applied on application or approval. It is important to be really clear on this element, to ensure there is no uncertainty. Pre-approval helps you to discern how much money you are likely to have approved on the official application. Knowing that your potential lender will offer a fixed-term, fixed interest loan gives further peace of mind for those borrowers looking to budget precisely rather than be susceptible to rate fluctuations. Borrowers should also consider the possibility of arranging a ‘split’ loan. This option allows you to split your loan between fixed and variable rates – either 50/50 or at some other ratio. This can allow you to ‘lock-in’ a fixed interest rate for up to 5 years on a portion of your loan, while the remainder is on a variable rate which may give you more flexibility when interest rates change and potentially minimize the risks associated with interest rate movements. Also, be aware that at the end of the fixed-rate term, your loan agreement will include information about how the loan will then be managed by the lender, usually to a ‘revert’ variable rate – which may not be the lowest the lender offers. You should be absolutely discussing your plans for your loan with your broker in the lead up to the expiry of your fixed rate, to ensure that you achieve the best possible outcomes! Want to know more about how to finance your property purchase and whether or not you're eligible for pre-approval, or to review your existing lending? Feel free to reach out, book a meeting and let's chat! One big perks of owning an investment property is claiming depreciation, which is the assessed annual decline in the value of fixtures, fittings, and buildings, which you can claim as a tax deduction to reduce your taxable income.
Surprisingly, many property investors are missing out on major tax deductions that can save them so much money in claiming this depreciation. Claiming depreciation is a great way of minimising your tax, to maximise your cash flow return. This is one of the most under utilised claims available to property investors. Generally, there are two types of depreciation available for property investors, depreciation on building allowance and depreciation on plant & equipment. Commonly known as a building write off, building allowance is the deduction on the building structure. On the other hand, plant and equipment is the deduction for removable items within the building itself, such as tools and equipment. A depreciation schedule includes the breakdown of all building allowance costs, plant and equipment costs, the rates and effective lifespan estimate for each item, and a breakdown of how much you can claim at the end of the financial year. There are two methods of a good report, diminishing value method and cost value method, so it gives you different options for claiming depreciation on your assets. The cost in preparing your depreciation report varies depending on the type of property, it's location, size, and all other factors. Tons of notable quantity surveying companies offer a money-back guarantee, so you have nothing to lose and possibly thousands to gain! Still have more questions in claiming depreciation? Book a Zoom meeting so we can chat! The First Home Loan Deposit Scheme is here to assist eligible first home buyers in purchasing a home sooner with a smaller deposit than what was previously required.
10,000 more opportunities are now available to help Australians buy their first home! It provides a guarantee to participating lenders that allows eligible first home buyers to purchase a home with a little deposit of 5 percent without needing to pay the lenders mortgage insurance for having less than a 20 percent deposit. With the current challenges posed by COVID-19, NHFIC anticipates the continued demand for these new 10,000 places to continue. There are a number of select lenders that have been provided quota for the 10,000 Scheme places for the 2020-2021 financial year, and we can assist by guiding you though your lender options, and their respective process, to achieve the best outcome possible. Applications will require a 2019-2020 Notice of Assessment from the Australian Taxation Office to demonstrate that their taxable income is no more than $125,000 for individuals and $200,000 for couples. You could be in your first home with as little as 5 percent deposit. Want to know more? Hit me up and let's chat! When we are assessing an application for finance, we generally align with the banks and what they request in support documentation in assessing an application for finance. While clients often have ready access to their latest 2 payslips, they sometimes need to go digging a little to find the last 1-2 years of income history for us, being likely what the banks will ask for, and sometimes some confusion as to the difference to a Notice of Assessment, a Payment Summary / Group Certificate, and a Full Tax Return. For context, the difference between the ATO notice of assessment, and the tax return, is that the ATO notice of assessment reflects your taxable income after deductions, not your gross income and the sources it came from. The banks also use the Notice of assessment as proof that what is lodged with your tax return, is in fact what the taxation office actually processed. The full tax return is comprehensive, in providing detail of who you are, where you lived, dependants, health insurance premiums paid, and gross income earned and the businesses earned from. It also details what tax concessions you received, and what tax deductions were claimed. I have attached an example (thanks google!) of each for your reference. The banks will either accept a copy of the PAYG / Group Certificate / Payment summary for the year, OR tax return + ATO notice of assessment. You may be able to download your Payment Summary from here also: https://www.ato.gov.au/individuals/working/working-as-an-employee/accessing-your-payment-summary/ The motivation behind asking for this additional information, is to:
Having trouble to find what we need? Talk to us, let’s work through it together! With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times. If you have any questions, book in a time with me below.
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AuthorRachael Bland – Founder & CEO Archives
February 2024
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