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Wednesday, 06 December 2017 04:32

Overcapitalising: What it is and how to avoid it

As a home owner or property investor, you may have heard the term ‘overcapitalising’. But what exactly is it and why is it considered bad? While adding a new deck or kitchen can increase the value and enjoyment of your property, overcapitalising can end up costing you more than you planned. Here’s a closer look at what overcapitalisation is, why it’s bad, and how you can avoid it and still increase the value of your property. What is overcapitalising? Simply put, overcapitalisation is when the cost of a home improvement is more than the value it adds to your property. For example, if you buy a property for $500,000 and spend $100,000 on a new outdoor kitchen area with timber…
Wednesday, 06 December 2017 03:15

How to get the most out of refinancing

Everyone wants to pay less on their mortgage, and refinancing is one strategy to help lower your interest rates – but is it worth it? We take a look at how you can get the most out of refinancing. Why refinance? Generally, people refinance to negotiate a better deal on their home loan and pay it off sooner. Depending on your situation, you should be able to save money by taking advantage of lower interest rates, or new products that weren’t available when you first negotiated your home loan. To help put it in perspective, let’s say you previously took out a $300,000 loan at 7.5% over 30 years with monthly repayments of $2,098. If you refinanced to a new…
The hammer falls, the auction has ended, the bidding’s all done… and the property is passed in to you, the highest bidder. You’re standing out the front of what could be your dream home, surrounded by curious neighbours, nosy passers-by and who knows how many other serious buyers. So what now? What happens next? With the property passed in, as the highest bidder you have the exclusive first right to negotiate with the seller. Only when you walk away can the agent start negotiations with someone else – so remember that you’re in the box seat. At this point the agent will invite you to come inside and negotiate – don’t go! Once you’re inside, you’re in the seller’s territory…
Looking for ways to pay off your mortgage in record time? Whether you’re a seasoned investor or buying your first home, an offset loan can help you reduce interest payments, save on tax and pay your mortgage off years ahead of schedule. What is an offset loan? With an offset loan (also called an offset account, interest offset account, mortgage offset account or offset home loan) the borrower takes out a home loan and opens a linked savings or transaction account. The balance in the savings account is then ‘offset’ daily against the home loan. How an offset loan works With an offset loan, instead of receiving interest on your savings account each month, the account balance is offset against…
It’s all too easy to rack up debt – credit cards, HECS, car loans – and may seem all too hard to pay it off. Debt can also have a big impact on how much money you can borrow for a home loan, so reducing your debt is essential when you set out to buy your first home. Here are seven steps you can take towards minimising your debt and moving into the property market. 1. Work out how much you’re spending Create a spreadsheet and track your expenses for a month – record everything so you can see where your money is going. You may be spending much more than you think on some things – more than you…
The Sydney market has performed strongly over many years - fuelled by low interest rates, a high demand from domestic and overseas investors as well as a general lack in supply. Is it slowing down now? Herron Todd White believes it is – they’ve pegged the Sydney housing market as being at the start of a decline in their popular “month in review” report. The report is available here. On the flipside – they’ve described the Melbourne market as approaching a peak and suggest buyers approach off the plan purchases with caution due to the risk of valuations coming in lower than the agreed purchase price which is something we’ve witnessed as well. They have pegged the Canberra market as…
Wednesday, 10 May 2017 01:12

Federal Budget 2017

Damian Toms, Senior Financial Planner from Mint Financial, has prepared an analysis on the 2017 Federal Budget. Damian is my go to person for Financial Planning services – hopefully you find the information below helpful. Last night, Treasurer Scott Morrison delivered a Federal Budget for 2017 focused, on health, home and housing. There were some changes that will impact financial plans in both a positive and negative manner. Some of the key measures include: · Increase in the Medicare Levy to 2.5% from 1 July 2019; · Introduction of a First home Super Savers Scheme that allows first home buyers to make voluntary pre-tax contributions to their super which can be used to fund a deposit on a home; ·…
Tuesday, 25 April 2017 22:02

Pros and Cons of buying Off the Plan

Off the plan properties can look appealing. I get it! I find myself gazing into the brochures and television adverts– getting lost in the wonderful images of happy families feeding ducks in the park. The young, urban hipsters holding their freshly brewed, single origin lattes in the funky café that will open in the new development. Are off the plan properties a good purchase? It’s a tough question with no right or wrong answer. This article provide a rundown on the pros and cons of purchasing off the plan properties from my personal point of view. As always, please carry out your own due diligence on any property purchase that you’re considering. My thoughts are general in nature and are…
If you’re reading this and about to go on maternity leave (or are already on it) – congrats! It’s an exciting time. We get quite a lot of new enquiries from clients who have just been declined from their current lender due to being on maternity leave. It’s a frustrating situation – some have been saving up a deposit for a long time and are excited about finally purchasing a home. Others have decided it’s time to upgrade into something larger to accommodate the growing family – or simply want to release some equity to pay for renovations. From the lenders perspective, some will argue that there’s no guarantee the client will return to the workforce and therefore the application…
It’s always nice when banks reduce rates. The following are some of our panel lenders that have reduced rates following the Reserve Bank’s recent decision in August 2016. AMP 0.10% cut effective 22 August. Bankwest 0.10% cut effective 23 August. ING 0.12% cut (Orange Advantage product) and 0.10% for all other variable products effective 15 August Macquarie 0.10% cut effective 26 August ME bank 0.10% cut effective 23 August Suncorp 0.10% cut effective 24 August CBA 0.13% cut effective 19 August. NAB 0.10% cut effective 19 August. ANZ 0.12% cut effective 12 August. Westpac & St George cut 0.14% for P&I loans and 0.10% for Interest Only loans effective 23 August. Adelaide bank 0.10% cut effective 29 August Choicelend 0.10%…
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