Future Finance Group

4 Tips For Finding That Perfect High Yield Property

Wed, 19 Mar 2025 02:30:52 GMT

Any property guru worth their salt will tell you that a dream property investment has nothing to do with a prestigious address or sleek amenities.

The ultimate goal, is to find that perfect “high yield” property that will give you maximum returns for as little input as possible.

Yield refers to the amount of cash a property produces as a percentage of its value and is calculated by the rental income you are receiving compared to the purchase price. There’s a lot more that goes into the calculations, which I’m happy to run you through, but to give you an idea on what to look for, I’ve put together some simple tips.

1. Do your research. There are plenty of stats out there that will give you the median rental yield for each suburb. This is a great place to start!

2. Look for dual income properties such as a house with a granny flat. You can potentially have two streams of rent coming in, meaning the chance for a higher rental yield significantly increases.

3. Have you thought about looking rurally? Country towns offer some great properties at a low price and because the cost of living is low, the rental yields tend to be higher.

4. Always think forward. Be on the lookout for up-and-coming areas and ask yourself if they’ll still be flourishing in five years time.

At the end of the day, you need to be realistic. Just because a property has a high yield doesn’t mean it’s going to be a great investment. As a mortgage broker, I can talk you through your options for investment loans so you can see what your monthly outgoings might look like.

Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

7 Quick Ways to Upgrade Your Home

Wed, 19 Mar 2025 02:30:48 GMT

The continuing boom in property prices has tempted many homeowners to invest in renovations to maximise the value and then put their home straight on to the market.

There’s no doubt you stand a better chance of enjoying a great return on your investment if you modernise your home.

Properties that enjoy a mix of the traditional and the contemporary are in big demand among today’s buyers and nothing ticks the boxes more than a brand new kitchen or bathroom. Two increasingly popular features at the moment are a dedicated home office and a design that connects the indoors with a garden or entertaining area.

But renovation projects of this size can become expensive. If your budget doesn’t allow for large-scale upgrades, there are plenty of ways to enhance the value of your home at little cost.

Here’s a seven-point guide to upgrade your home.

1. Break out the brushes

It’s amazing how a fresh coat of paint will improve a property. Don’t focus only on the walls but attend to the skirting boards, ceilings and architraves. Select neutral colours as these make rooms feel bigger.

2. Go green

Small-scale improvements to your gardens work wonders. Focus on the front yard as this creates an all-important first impression.

3. That’s entertainment

If your property lacks an area to entertain, this is a great low-cost project to enhance your property’s desirability. Consider adding a deck or a barbeque area.

4. Floor ’em

A mixture of different floor types can make a home feel bitsy while a home with consistent flooring creates a great sense of flow. Replacing the floor can be a painful project but you’ll be amazed how much bigger your home feels.

5. Say it with storage

You can never have too much storage. A bedroom without built-in robes is just asking for clothes on the floor. Think about storage in bedrooms, bathrooms, kitchen and laundry and looks at ways to create clever storage solutions in nooks and under the stairs.

6. Kitchen upgrades

If yours is a little tired, don’t worry – you don’t have to rip it out and spend big dollars. Consider replacing only the doors, drawers and handles. You’ll achieve a transformation at the lowest possible cost and it will feel like new.

7. Unbeatable bathroom

Like the kitchen, this can be an expensive renovation. You can avoid replacing tiles by using a professional company to spray-paint them. This treatment can also be applied to sinks, baths and showers. New tapware and shower screens complete the refresh for a fraction of the cost of ripping and replacing.

Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

*This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.

7 Tips for Organising Your Finances Before You Buy A Home

Thu, 13 Mar 2025 03:30:27 GMT

There are many tips for buying a property, but there’s one essential element that no one can avoid - getting your finances in great shape before you start.

Knowing what you can afford is a critical element of finding your first home or the next one that takes you higher up the property ladder.

The most successful buyers begin their search with their finances in order and a pre-approval letter from their bank or lender. They know their budget and tailor their efforts accordingly.

There’s no greater waste of time than visiting properties that are beyond your price range.

Using a mortgage broker can help you shortcut the hours of research through various banking products and good brokers have detailed market knowledge and can offer an array of products.

We can suggest the loans most suitable to your circumstances and assist you with paperwork, and review your credit history. We can also help you understand any grants or tax exemptions from state and federal governments that you may be eligible for.

Below are a few tips for securing the finance that will help you find your dream home.

1. Clarify your finances

If you’re a homeowner, you’ll need to obtain a valuation on your current property and provide proof of current earnings. A first-time buyer will ideally have 10% of the purchase price as a deposit to get the best interest rate and conditions for their first loan but the more the better. Money for legal fees, property inspections and taxes need to be set aside, too. Make sure your tax returns are up to date to prove your earnings. It will make life easier.

2. Low barrier to entry

You can obtain a conventional loan with as little as 5% of its total as your deposit. Some government-backed loans do not require a deposit.

3. It pays to save

The more you save, the less you borrow. And that means lower your monthly repayments for you over the term of the loan.

4. Go for a grant

First-home buyers should research the current grants from various levels of government that are designed to encourage them into the market.

5. Credit crunch

You’ll need a good credit history to be attractive to lenders. Check yours out by using companies such as Experian and Equifax. If your track record is not the best, we can discuss ways to address this. If errors appear in your credit history, dispute them immediately.

6. Find the right loan
You can save thousands of dollars by choosing the right mortgage product for your situation. It pays to shop around
and make a note of not just the interest rate but the fees that come with it and other services that may be offered. As your mortgage broker, we can guide you through this process.

7. Be pre-approved

A written undertaking from your lender will help you focus on what you can afford, as well as signal to a prospective seller and their agent that you’re not kicking tyres. Watch out for lenders who will only “pre-qualify” you, as this represents only an estimate of what you can afford and does not offer any guarantees of intention to lend.

Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

10 Tax Advantages To An Investment Property

Thu, 13 Mar 2025 03:30:24 GMT

Owning an investment property can offer attractive tax advantages in exchange for contributing to the nation’s supply of rental accommodation.

In order to claim these advantages, it’s extremely important to keep your receipts. Being organised always helps maximise your tax position.

Using a property manager can make this easier as you’ll receive an annual income and expenditure report. This improves the accuracy of your return and can help result in a faster refund.

Remember that deductions can only be claimed for when tenants occupy the property or when it’s genuinely up for rent. If you’ve had renters for only six months of the fiscal year, you might be entitled to half of what you’d typically expect.

Here are 10 general tax advantages from an investment property that you may be able to claim. But always work with your accountant who will tailor his or her advice to you specifically. That way you’ll not miss out on a claim or breach a rule that risks an audit.

1. Rental advertising costs – If you’ve had to find a new tenant, your marketing expenses are a legitimate claim.

2. Interest on your loan – Together with bank fees, the interest that you’ve paid on your mortgage (not the reduction of the principal) can be claimed.

3. Council rates – While these are an annual cost, they can be claimed only for the period during which a tenant is in residence.

4. Insurance – You’ll likely have a landlord insurance policy and also building insurance. These are expenses that in most cases can be claimed

5. Land tax – Consult your accountant before making any claim, or find the latest rules on the ATO’s website. Look for the “residential rental properties” area but it is worth discussing this expense with your accountant.

6. Strata fees – Like rates, these can be claimed for the period you have a tenant in the property.

7. Depreciation – This can be a big-ticket item. You should have had a quantity surveyor create a depreciation schedule. Claims can cover contents such as appliances, carpets and blinds and, if within the rules, renovations and the building structure. Speak to your accountant before organising a depreciation schedule.

8. Maintenance – Claims are accepted if they relate to general wear and tear but not if they are replacing or adding to the value of the asset. Don’t confuse maintenance with depreciation. If a stove breaks and you replace it, that’s not maintenance; the new stove has to be depreciated.

9. Garden – This is another confusing area. You can claim costs of upkeep, such as lawn-mowing. Any expenses that add value to the property, such as a retaining wall, must be depreciated.

10. Professional services – Your property management fees, costs associated with accounting, book-keeping, and any legal expenses can all be claimed.

Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

*This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.

8 Tips To Reduce The Running Costs Of Your Home

Thu, 13 Mar 2025 03:30:22 GMT

Maintaining your home requires a mix of love, diligence and ongoing spending.

But it’s a small price to pay to keep your home comfortable and stop small issues growing into big problems.

Here's a quick guide to staying on top of essential maintenance.

1. Set aside time

It's a good idea to schedule a certain amount of time per week or month for property maintenance, so you never fall behind.

2. Call for help

Don't be afraid to call in gardeners and handymen to do these chores, especially if they’re not your thing or you’re time-poor. It can help to set an annual budget for such work.

3. Fix water leaks

Thirty drips a minute can add up to 1,000 litres per year. If you don’t jump on top of leaking taps or toilets early, you’ll have money pouring down the drain.

4. Do pest control

Have you done a pest inspection since you bought the home? An annual pest inspection could help you find any termites before they do serious damage.

5. Change the lights

Switching from incandescent light bulbs to modern LEDs and halogens will save you energy and – eventually – money. Some councils and energy providers offer switchover programs.

6. Get insulation

Allowing heat to escape through a poorly insulated roof can be an expensive problem. You can fix it by installing insulation batts in the roof cavity – and inspecting them every few years to make sure they haven’t degraded or slipped out of place.

7. Clean your aircon filter

A dirty air-conditioning filter will require more power to operate, and therefore use more energy. It can pay to give your air-conditioning an annual service.

8. Switch your fans

If you climb a ladder and look at the stem of your fans, you'll likely find summer and winter settings. The winter one will reverse the rotation and push hot air back towards you, maximising your warmth.

If you need help managing your mortgage, feel free to call me on (03)8657 8664 .

How To Fund A Renovation With Your Home Loan

Thu, 13 Mar 2025 03:30:16 GMT

Property renovation is not only a great way to improve the value of your biggest financial asset but a sensible strategy to enhance your lifestyle without the expense of buying a new home.

State government stamp duty fees are significant in most states. If you love your neighbourhood, it can make little sense to go through the upheaval of moving to relocate just down the road.

For many city properties, the amount paid in stamp duty could cover the cost of a new kitchen, bathroom or a granny flat.

You still have to finance your renovation, though. A popular approach is to use the equity in your home – that is, the difference between a lender’s valuation of your property and the amount you owe on it. It means you need to apply for a Home Equity Loan, or line of credit loan.

If you want to go beyond the 80% Loan to Value Ratio – known as LVR – your lender may require Lender’s Mortgage Insurance. This protects the bank against you defaulting.

Not every loan arrangement will allow you this flexibility, so it’s best to talk to your mortgage broker about the best deals based on your specific circumstances. However, here are a seven pointers to get you thinking:

1. Change horses

The home loan market is complex and competitive. Few owners who take a 20- or 30-year loan stay with the same lender over that period so it’s perfectly normal to refinance and change lenders but remain in the same property.

2. It’s not personal

Refinancing your home is cheaper and more practical than sourcing a personal loan.

3. Construction loan

These are available for major works that will result in your property being more valuable. An example might be adding an extra storey. In this arrangement, you pay for the funds you use, not the amount you borrow.

4. Renovation budget

Source quotes so you know how much you’ll need to do the renovations you envision. Add 20% of the total to cover unforeseen problems and delays. (Do you know anyone whose renovation has finished on time and on budget?!)

5. Fees dilemma

If you stick with the same lender, it can be possible to negotiate away refinancing fees. Switching lenders for a better interest rate may involve fees, so talk to your broker to work out the best deal for you.

6. Apply here

Refinancing requires the agreement of your lender. Your application might take a few weeks and you’ll need your paperwork lined up so give yourself time to get it organised.

7. Quick-draw

Another strategy is to draw down on any additional money you’ve paid on the principal of your loan if your current mortgage structure permits. Talk to your broker to understand if this is a better option than refinancing.

Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

*This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.

6 Tips to Help Choose Between Selling or Renovating

Mon, 02 Sep 2024 04:00:00 GMT

Assessing the benefits of an extensive home renovation against selling your property is always a worthwhile exercise.

Selling your home is rarely an easy decision. It will often hold family memories, and that makes it tough to leave. It’s also likely to be your most significant financial asset, and you want to be confident you can maximise its value.

The process of selling isn’t cheap with commissions, legal fees and taxes. But the alternatives are to tolerate your home in its current condition or to talk to an architect or builder about giving your home a makeover.

That’s not cheap, either. Costs can run into hundreds of thousands of dollars, and there’s never a guarantee the work will finish on time and budget. If you think selling is stressful, you should try a large-scale renovation!

Regardless of which way you jump, it’s likely you’re going to need finance - whether that’s refinancing your current loan for a renovation or a new loan for a new property - so it’s worth talking to your mortgage broker to understand your options.

Here are a few tips to help you think it through.

1. Structural issues

Nothing dates a bathroom like colour. You can tell if it was built in the 70s and 80s merely by the colour scheme. Most bathrooms today are based on white, rather than old school creams or browns. If your bathroom can remember when David Cassidy was making hits, then the time to act is overdue as aging bathrooms usually also have waterproofing issues.

2. Money in the bank

You can afford to decide whether you want to pour your hard-earned cash into your existing home, or climb the property ladder and find a superior property. Or if you’ve paid down a lot of your current home loan, you may be able to redraw to fund a renovation.

3. You intend to stick around

If your home is well located, you may opt to stay and maximise the potential rather than move. However, if you favour a renovation, be aware that upgrades offer the best payback when you sell within a year or so of the work being completed. Your new kitchen doesn’t stay new forever although it is likely to give you a lifestyle benefit for at least a decade.

4. Big squeeze

If your current home is getting too small, you’ve got the option of building an extension, but that means you’ll have to battle the planning process as well as the stress of selecting an architect and builders and perhaps paying rent while the work is being done. If the rebuild is so big that you need to move out anyway, a new home might be a more straightforward option here.

5. Living in the 70s

Many owners who take the upgrade path want to modernise their homes. They’re fed up with the rabbit-warren design of small, disconnected rooms and yearn for open-plan living, plus a new kitchen and bathroom. Making such fundamental changes are expensive, and it is worth checking out the prices of more modern homes nearby before going ahead with a renovation. That will help you understand the value that you’re adding.

6. Dead space

Poor design can result in some rooms being ignored, either because of their size or their position relative to the main living areas. Real estate is not cheap, so this is very wasteful. If fixing the problem is difficult, finding a new, better-designed property will pay off for you financially in the medium to long-term while also helping you take the next step on the property ladder.

Give us a call on (03)8657 8664 to have a chat about the best way to fund your home improvements.

Tax Deductions for Investment Properties Explained

Mon, 05 Aug 2024 04:00:00 GMT

Owning an investment property is a little like running a business. It provides a great source of income and builds personal wealth but inevitably comes with a series of costs that hit your bottom line.

The excellent news for property investors is that many of these expenses are tax-deductible.

Tax advantages are not just available on new properties. While an older building may have limits on what you can claim, you do not have to buy a new house or apartment to qualify for tax benefits.

There are two components of a tax claim for a rental property. These are:

Capital Works Allowance covers the structure, such as walls and roof tiles; and
Plant & Equipment covers the so-called removable assets such as carpets, stoves, and hot water system.

You should always obtain professional accounting and tax advice to understand exactly what can and cannot be claimed according to your own specific circumstances as the Australian Tax Office changes the rules regularly. For example, only investors of new property can make claims under plant and equipment assets. However, exclusions exist for those properties that have been renovated.

Those who own older properties can continue to depreciate items that fall under the capital works component, so long as it was built after September 15, 1987. And you may benefit from depreciation even if a previous owner undertook improvements.

So, working out what you can claim legitimately requires the eagle eye of a professional.

In general, you will find the following items are tax-deductible:

Costs associated with a property manager, which are usually 3-8% of rental income
Accounting and professional financial advice
Advertising if required to find new tenants, plus associated re-letting costs
Strata levies
Rates and land tax
Insurances
Loan interest and ongoing loan fees

Also, work with your accountant or financial adviser to build a tax depreciation schedule for your property. This document will list all the items in your property that qualify for depreciation.

It should only need to be completed once, and it can then be submitted to the ATO each year to ensure you obtain the maximum possible tax benefits from your rental property.

A Guide to Purchasing Your First Investment Property (and Beyond)

Mon, 01 Jul 2024 04:00:00 GMT

Investing in property isn’t rocket science but there are a few rules savvy investors should follow for success.

Here are some things we’ll cover in the next couple of weeks to get you started.

Should I invest? Investing isn’t right for every one.The first thing you need to do is make sure you’re in the right financial position to take the risk.
How do I build a strategy? Before you start your journey you need to do plenty of research and build a strategy around your specific budget and financial needs.
How do I choose the right loan? Once you get your finances in order, start shopping around for a great loan. Make sure you get pre-approval from your lender before you start looking for your investment property.
How will I manage my investment? It’s important to remember that an investment property is a long term commitment and you need to know how you are going to manage it over the life of your loan.

With the right advice and loan, property investment can be the most satisfying and profitable decision you make. If you have any questions or want to discuss whether property investment is right for you, contact us on (03)8657 8664 or email us at reception@futurefinancegroup.com.au

What is a Redraw Facility?

Tue, 28 May 2024 03:40:33 GMT

A redraw facility is a home loan feature you can use to reduce the amount of interest you pay.

Here’s how redraw works:

When you make extra repayments on your home loan, this money goes into redraw
You can ‘borrow back’ (or redraw) this money when you need cash
The money in your redraw facility reduces the interest you get charged
If, for example, you have $300,000 outstanding on your mortgage and $20,000 in redraw, you’ll be charged interest on only $280,000 (i.e. $300k minus $20k)

If you’re thinking a redraw facility sounds very similar to an offset account, you’d be right.

But there are some key differences.

An offset account is a separate account that’s linked to the home loan – so when you put money into the account, it’s classified as a deposit rather than an extra repayment. That means if you take money out of the offset account, you’re reclaiming your own money.

A redraw facility sits within the home loan – so when you put money into the facility, it’s classified as an extra repayment rather than a deposit. That means if you take money out of the redraw facility, you’re technically re-borrowing the bank’s money. This may have tax consequences if you’re a property investor, so seek advice from a tax professional.

Some key differences to note: given that redraw is a transfer, it might take a little longer to access that money than if you were to get it from an offset account. Also, some lenders charge fees to redraw, however the home loan itself may have lower fees attached overall compared to a more complex package with an offset account. As your broker, we can weigh these up for you.

If you want to chat about redraw, offset or any other home loan features, please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

What is an Offset Account?

Mon, 06 May 2024 02:58:35 GMT

An offset account is a useful home loan feature that can help you repay your loan faster and reduce the amount of interest you get charged.

An offset account is a transaction account linked to your home loan. Just like an everyday banking account, you can use it to receive your salary and can spend money via a debit card.

Offset accounts reduce the amount of interest you get charged. Imagine you had $300,000 outstanding on your mortgage and $20,000 in your offset account. Instead of being charged interest on $300,000, you'd be charged interest on only $280,000 (i.e. $300k minus $20k).

Offset v redraw

If you’re thinking an offset account sounds similar to a redraw facility, you’d be right.

That said, there are some key differences, which will be discussed in our next blog

We can help you compare the pros and cons of offset accounts and redraw facilities. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

The Pros and Cons of Buying New or Existing Property

Mon, 01 Apr 2024 02:57:32 GMT

We sometimes get asked whether it's better to buy an established property or something new.

Both options come with pros and cons, so there's no one right answer – only what's right for you personally.

Here are 10 things to consider:

1. A new home should be free of defects, while an established home might have problems you need to fix after moving in.

2. A new home is likely to have lower maintenance costs than an established home, at least in the short-term.

3. Depending on where you live, you could be more likely to qualify for government assistance if you buy new rather than established.

4. If you're a property investor, a new home offers more tax depreciation benefits than an established home.

5. New homes are more likely to be overpriced than established homes, because there are a range of intermediaries involved in building and marketing new developments, and their fees usually get added onto the sale price.

6. If a new home is one of many identical developments, it might have less scarcity than an established home and therefore experience lower long-term capital growth.

7. For the same reason, mass-produced new homes tend to have less character than established homes.

8. A new home may be harder to finance, as lenders may have caps about the number of new builds they finance in a particular development or suburb.

9. If you buy a new home before it’s built, the finished product might differ from the brochure, whereas you know what you’re getting with an established property.

10. If you’re a property investor, forecasting the rental income on a new home that doesn’t have a rental history will be harder than doing it for an established property that does.

If you’d like to discuss your borrowing capacity or home loan options, call our team on (03)8657 8664 or email us at reception@futurefinancegroup.com.au

Why You Should See a Mortgage Broker & Not the Bank

Mon, 04 Mar 2024 02:56:04 GMT

Think about the last time you went grocery shopping.

I bet you spent at least a few minutes comparing brands and deliberating on which products offered the best value for money.

If we expect that level of choice in our supermarkets, why wouldn’t we expect the same from our home loans?

A broker’s job is to do the comparing for you. Not only are they experts but they have access to a huge database of lenders who are all wanting your business. A broker is in the position to negotiate with those lenders and find you the right value-for-money loan to fit your lifestyle.

A mortgage broker:

Has access to more lenders, meaning you’re more likely to hear a ‘yes!’

Is specifically trained in mortgages and knows how to structure your loan to suit your goals

Acts as your own personal banker, guiding you through every step of the home loan process

Will be your broker for life! You’ll receive ongoing help and advice whenever you need it during the life of your loan

Helping people just like you to find the right home loan is our passion. If you’d like to talk to one of our brokers about how we can guide you through this journey, feel free to contact me on (03)8657 8664 or email our team at reception@futurefinancegroup.com.au to schedule an appointment.

5 Tips for Paying Off Your Mortgage Faster

Mon, 05 Feb 2024 02:54:52 GMT

As a homeowner, one of the best ways to save money is to pay off your mortgage. This both frees you from the serious dent to your income each month when your mortgage payment is deducted and can deliver additional equity in your loan that you can use at a later date.

It will depend on your current deal with your lender whether it’s possible to pay off your mortgage faster than the period you signed up to. If you’ve committed to a deal that doesn’t allow you to increase payments, or even make them on a fortnightly basis, you may want to consider refinancing to make this sort of flexibility possible.

On a typical 25-year mortgage, five to eight years of your loan goes to paying the interest charge alone – that’s a sobering thought. So, finding a lender who’ll offer a weekly or fortnightly option can potentially save you thousands of dollars.

You’ll need to assess your current arrangement and, if necessary, work with your mortgage broker to find fresh solutions that suit your current circumstances.

In the meantime, here are a few tips for paying off your mortgage faster.

1. Fortnightly payments

By altering your repayment schedule, you can potentially save the equivalent of one month’s mortgage bill each year. Weekly payments make an even bigger dent in the loan but could hurt your cash flow.

2. Extra payments

Putting a wedge of cash on your loan will dramatically reduce the amount of interest you’ll pay over the specified life of your loan. Consider setting aside your tax refund, or an annual work bonus, for this purpose.

3. Higher payments

Shorten the length of the loan by paying a little extra each month. Not every loan product will let you do this so you’ll need to check if its possible. Some are geared to keep you in the deal for the specified loan period.

4. Find the right deal

Most people focus on finding the lowest interest rate. But be careful: you need payment flexibility, and it’s always helpful to access the equity in your loan if you need cash quickly. Sometimes the cheapest deal is not the best deal.

5. Offset account

This is a savings or transaction account that’s linked to your mortgage. Its positive balance will reduce the amount you owe on your mortgage each month. That means you’ll be paying less money to service interest, and your loan can be paid off faster.

6. Switching loans

Consider switching loans if you have the capacity and need more flexibility in paying back your mortgage.

5 Tips to Beating Out Other Buyers

Mon, 01 Jan 2024 02:52:58 GMT

Property buyers are being forced to compete hard in many markets around Australia, so how can you improve your chances of securing your dream home?

Here are five tips to beat out other buyers:

Have a home loan pre-approval in place. This will make you look more attractive in the eyes of real estate agents, because it will position you as a serious buyer who can move quickly if their client accepts your bid.

Build good relationships with agents. Real estate agents work for vendors, not buyers, so they prioritise their clients' interests. But if you can establish a good working relationship with agents – even while keeping some of your cards up your sleeve – they might favour your offer over those of other buyers.

Be realistic with your offers. If you're buying via private treaty, avoid the temptation to begin with a lowball bid, otherwise agents will take you less seriously than the buyers who are making serious offers.

Make an offer before the auction. If you're buying via auction, get ahead of the competition by making an offer before the auction. If your price matches what the agent expects to get at auction, they might tell their vendor to play it safe and accept your offer.

Be flexible around settlement. Tell the agent you're willing to accept different settlement conditions (assuming that’s possible). This might include a short or long settlement, or a scenario in which you let the vendor rent the property for some time before you move in.

Unlock The Value Of Your Home & Upgrade Your Lifestyle

Mon, 04 Dec 2023 01:22:51 GMT

Owning your own home comes with the exciting opportunity to increase its value, ultimately building wealth for your future. Recent spikes in house prices, with an average increase of around 21% nationally last year, have led to a surge in property values. By leveraging the equity in your mortgage, you can invest in enhancing your home and lifestyle.

Many homeowners are choosing to use their growing equity to upgrade their current homes, avoiding the hassle of house-hunting, auctions and additional expenses associated with buying new property. Renovations have become a popular choice with owners utilising their loan equity to create new spaces like building extensions, home offices and upgrading kitchens and bathrooms. Not only do these projects enhance your living experience, but they can also significantly increase the value of your property.

Before diving into a renovation project, it is important to ensure you have the right lending arrangement in place. You may need to apply for finance, and your lender will conduct a home revaluation as part of the approval process. Working closely with your broker, we can streamline this process and help you avoid the complexities of applying for a new loan.

Here are a few tips to consider below starting your renovation journey:

Obtain quotes from at least three reputable builders or suppliers to understand the project costs.
Add a buffer of 10-20% to cover any unexpected expenses during construction.
Discuss your renovation plan with your mortgage broker or financial adviser to align it with your wealth creation goals.
Consult a real estate agent to assess the local market and weigh the value of renovating versus moving.
Check with your mortgage broker about whether you might be required to pay Lenders Mortgage Insurance if you go beyond the 80% loan-to-value ratio (LVR). What is LVR? It's insurance that protects the lender in the event you default. As a rule, lenders insist on this policy if you go over the 80% threshold.

By strategically using your home equity for renovations, you can enhance your living space, increase your property value, and secure your brighter financial future.

The Power of Pre-Approval: Your Key to Home Buying Success

Thu, 05 Oct 2023 22:08:12 GMT

The Power of Pre-Approval: Your Key to Home Buying Success

To make your home buying journey smoother and more stress-free, we highly recommend you get pre-approved. If you're in the market for a new home, you've likely heard this term, but what does it really mean?

What Is Pre-Approval

In a nutshell, pre-approval is like having a golden ticket when you're house hunting. It's a document issued by a lender after they've reviewed your financial situation and credit history. This approval states the maximum amount of money the lender is willing to lend you for a mortgage. Now, here's why it's so fantastic.

Budget Clarity

Pre-approval gives you a clear budget to work with, so you know what properties are within your financial reach.

Seller's Confidence

Sellers often prefer dealing with buyers who come with a pre-approval letter in hand. It shows you're serious and have the financial backing to purchase.

Faster Closing Process

Time is of the essence in real estate. With pre-approval, you've already done much of the mortgage application legwork. This can expedite the closing process, allowing you to move into your new home sooner.

Negotiating Power

Having a pre-approval letter can give you an edge when negotiating the price of the house. Sellers may be more willing to work with you if they know you're financially prepared.

Peace of Mind

Perhaps most importantly, pre-approval provides peace of mind. You can house hunt confidently, knowing that you're looking at properties within your budget and no more second-guessing or sleepless nights worrying about financing.

How to Get Pre-Approval

Getting pre-approved is a straightforward process when you work with us because we will guide you every step of the way!

Here's a general overview:

Choose a Lender : We will do the research and find the best product with the best rates and terms on your behalf.
Gather Documentation : You'll need to provide us with financial documents like pay slips, tax returns, bank statements, and proof of assets.
Complete an Application : Complete a mortgage application and run a credit check.
Wait for Approval : Once your application and credit report are reviewed, they'll issue a pre-approval letter.
Start House Hunting : Armed with your pre-approval letter, you're ready to start finding your new home.

In Summary

In summary pre-approval will empower you with knowledge, confidence, and a clear budget, all of which are essential for a successful and enjoyable home-buying experience.

What should I do next?

Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future.

So call our office for more information on pre-approval on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website.

https://www.futurefinancegroup.com.au/

Navigating the World of Mortgages: What borrowing capability do you have?

Tue, 01 Aug 2023 03:50:45 GMT

Navigating the World of Mortgages: What borrowing capability do you have?

Deciding to buy a house is an exciting milestone, and we're here to accompany you through the intricate world of mortgages.

With the changes to interest rates that have happened over the last twelve months, it's essential that we are prepared and approach borrowing with a healthy attitude, as your choices now will have long-lasting implications, so let's ensure you're well-prepared for this homeowner journey.

What should I consider when considering my borrowing limits?

First, let's figure out how much you can borrow without sacrificing your peace of mind and daily joys.

The key here is to measure your income against your expenses, including the potential mortgage repayments. A general rule of thumb: try to keep your mortgage repayments to no more than 35% of your gross monthly income.

When it comes to borrowing generally, the higher your deposit and the higher your income, the more they should be willing to lend. The good news is we have more flexibility as mortgage brokers than the big banks, so we can look at your circumstances closer.

Now, let's discuss some essential factors to consider when figuring out your borrowing limits.

How much debt can you handle? Think about your lifestyle and what you're willing to give up versus what's non-negotiable.
Be realistic about your dream home. Start with something affordable and gradually work your way up as your earnings grow and your equity increases.
Think about the future. Are you planning to start a family, change jobs, or experience significant life changes? Factor those possibilities into your calculations.
Keep an eye on interest rates and consider how further rises might affect your ability to make repayments.

Reminder;

A reminder that when purchasing a property, you will also need to factor in further expenses, such as, pay stamp duty, pest & building inspections, conveyancer fees, application fees, council rates, possible strata or body corporate costs, and utility bills to factor in.

In Summary

We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation to help you whether you are purchasing your first home or refinancing.

What should I do next?

Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future.

Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website.

https://www.futurefinancegroup.com.au/

Refinancing: What Are Your Options As A Homeowner?

manager@futurefinancegroup.com.au (Bree Jones) — Mon, 19 Jun 2023 03:18:47 GMT

At Future Finance Group, we understand that financial hardship has become a pressing concern for many homeowners across the country, including Melbourne.

We want to help you explore the benefits of refinancing your mortgage.

By assessing the right time to refinance and understanding the steps involved, we can guide you to potentially save money, access improved loan terms, and secure a more favourable financial future.

What are the Benefits of Refinancing?

During these challenging times, refinancing your mortgage can bring meaningful advantages.

Firstly, it may allow you to take advantage of lower interest rates, reducing your monthly mortgage payments and offering much-needed relief. Additionally, refinancing allows switching from a variable-rate to a fixed-rate mortgage, ensuring stability and protection against future rate increases.

By consolidating high-interest debts, you can streamline your finances and gain more control over your monthly obligations. Also, refinancing can unlock equity in your home, providing funds for essential expenses or other financial goals.

Assessing the Right Time to Refinance

Working out when to refinance can be challenging, mainly because we do not know what the future will bring.

We are here to look at your personalised options and work with you to ensure your financial security.

We can consider many factors, such as your credit score, home equity, and employment stability, to give you informed options.

Steps Involved in Refinancing and Potential Cost Savings :

We are here from the beginning to the end and strive to simplify the refinancing process for you.

We'll help you evaluate your financial situation, research and compare over thirty lenders and loan options, and gather the necessary documentation.

Our ultimate goal is to help you secure better terms, rates, and long-term cost savings to ease the pressure on you and your family.

In Summary

In these challenging times, exploring refinancing options can provide much-needed relief and open up financial opportunities for you as a homeowner.

What should I do next?

Our dedicated team is committed to nurturing your financial well-being and helping you achieve a stronger and more secure future.

Call our office on (03) 8657 8664 to organise a time to chat, and we also invite you to take advantage of our free resources by heading to our website. https://www.futurefinancegroup.com.au/

5 Practical Tips to Help You Save As The Cost Of Living Increases

manager@futurefinancegroup.com.au (Bree Jones) — Mon, 05 Jun 2023 03:35:26 GMT

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How to Get Your Property Ready for Sale

manager@futurefinancegroup.com.au (Bree Jones) — Wed, 19 Apr 2023 04:13:15 GMT

If you want to sell your property, you will love this blog post.

You can do a few things to prepare your home for sale that can make a big difference in your result.

Read through this post and implement these suggestions to help you hit the market in the best way possible.

Declutter and Clean

The first step in preparing your property for sale is decluttering and cleaning.

Remove any unnecessary items and furniture that take up space in the house; it will help create a spacious and inviting atmosphere.

Cleaning the house, including windows and surfaces, will make the property look brighter and more welcoming.

Repairs and Maintenance

Make sure you complete minor maintenance or repairs before putting your property up for sale.

These small details can make a big difference in how potential buyers perceive your property.

Make it look appealing for the street!

The first impression of your property is essential, beginning with the street appeal.

Make sure the exterior of your property is well-maintained and visually appealing.

Keep your lawns neat, clean the garden, and maybe even repaint the front!

Stage Your Property

Staging your property can help potential buyers envision themselves living in the space.

You could rearrange the furniture, add decorative touches, and make it feel warm and welcoming!

You can always hire a property stylist too, which can help you highlight the best features of your property.

Work with a local Real Estate Agent.

Work with an agent who knows the area, who will market your property effectively, and negotiate with potential buyers on your behalf.

Chat with a few of them to ensure you feel comfortable and get the best person on the job!

In Summary

Preparing your property for sale in Melbourne takes effort, but it is absolutely worth it to hope you can increase your chances of selling it at a fantastic price.

What should I do next?

If you need assistance as you sell your property and need finance for your next property, call our office on (03) 8657 8664, and we can organise a time to chat and make a plan to get you pre-approval for a home loan.

Also, we invite you to take advantage of our free resources by heading to our website.

https://www.futurefinancegroup.com.au/

10 Useful Tips for First Home Buyers

manager@futurefinancegroup.com.au (Bree Jones) — Sun, 19 Mar 2023 22:53:34 GMT

10 Useful Tips for First Home Buyers

We help many First Home Buyers here at FFG, and after celebrating quite a few of our clients buying their first properties over the last month we thought we would share a few useful tips for other First Home Buyers!

Amy and Andy celebrate buying their first home! Well done guys!

10 Tips:

1 - Set a budget: Determining a budget will help you narrow your search and avoid overextending yourself financially.

2 - Research the market: Learn about the real estate market in your area, including property values and trends in different neighborhoods.

3 - Get pre-approved for a mortgage: Before you start house hunting, come and see us and get pre-approved for a mortgage.

This will help you know what you can afford and give you more bargaining power when making an offer.

4 - Consider different neighborhoods: Look at what is essential to you and your family, whether that is being close to public transport, schools or the beach, and this will help you find out which suburbs interest you.

5 - Speak to a real estate agent: An agent can help you find the right home and guide you through buying a property.

6 - Get a building inspection: Remember to add a building inspection to your offer; this will allow you to check for any building issues in the home.

7 - Factor in additional costs: Besides the purchase price, there are other costs, such as stamp duty, conveyancer fees, and moving expenses. Be sure to factor these in when setting your budget.

8 - Attend open houses: Attend open houses to understand better the properties you're interested in and their price points.

9 - Be prepared to act quickly: In a competitive market like Melbourne, properties can sell quickly. Be prepared to act if you find a property you like and have that pre-approval!

10 - Stay flexible: Finally, stay flexible and be willing to compromise on some of your wants and needs. You may not find the perfect home, but you can find one that meets most of your criteria and is a good investment for your future.

In Summary

What should I do next?

Call our office on (03) 8657 8664, and we can organise a time to chat and make a plan to get you pre-approval for a home loan.

We can answer all your questions and help guide you on this exciting journey to securing your first home!

Also, we invite you to take advantage of our free resources, including our First Home Buyer ebook, by heading to our website and downloading a copy!

https://www.futurefinancegroup.com.au/ebooks

Looking to Invest in property? We can help you!

manager@futurefinancegroup.com.au (Bree Jones) — Sun, 26 Feb 2023 22:25:35 GMT

Property has long been considered a popular path to wealth creation for Australians.

It has the potential to generate capital growth (an increase in the value of your asset) as well as rental income.

There are also tax advantages associated with negative gearing.

However, when buying an investment property, it is wise to remember that you are making a business decision, and it's worth taking the time to plan.

"When buying an investment property, it is wise to remember that you are making a business decision."

Why do people invest?

Around 20% of Australians invest in property for:

● potential capital growth

● rental income

● tax benefits

They consider property one of the more solid, less volatile forms of investment because you can actually touch bricks and mortar.

They want to get ahead financially and don't want to be one of the 80% of Australians who rely on the aged pension when they retire.

When should I invest?

There is never one time fits all time to invest; instead, take into account the;

● Are you earning a steady and increasing income?

● What personal commitments do you have coming up that may affect your income?

● Is there debt you can still work on reducing or clearing?

● Is borrowing more going to stretch too much, and will you be able to make repayments?

Consider these points and make an appointment with us so we can discuss your personal situation in depth and make a plan to reach your financial goals.

In Summary

What should I do next?

Call our office on (03) 8657 8664, and we will put together a structured loan proposal for purchasing your first investment property.

Also, we invite you to take advantage of our free resources and head to our website with loads of eBooks, blogs and information to enjoy!

What is Refinancing and how can it help your family?

manager@futurefinancegroup.com.au (Bree Jones) — Wed, 25 Jan 2023 02:19:51 GMT

You would have heard many people talking about refinancing lately.

So in this blog, we will share what it is and how it can help your family.

What is refinancing?

Refinancing is like having a new loan to pay off your old one.

The most common reason for looking at refinancing is to help reduce the amount of money you are paying on your mortgage repayments.

What are the benefits?

Refinancing your mortgage can have the following benefits;

Obtain a lower interest rate
Less monthly mortgage repayments and shorter life of the loan
Change from a variable to a fixed rate
Release equity to help you with other expenses

How do you refinance?

To refinance your mortgage, you need to apply for a new loan. This is where we at Future Finance Group come in!

With us as your mortgage broker, the process is seamless for you; we help identify the best options on the market and ensure they are the right fit for you and your family.

We will also look at the pros and cons, what fees are involved, how long you plan to stay in the property to be able to recoup the costs. We will always make sure that it makes financial sense for you now and your plans for the future.

FFG Team members Bianca and Amba

We like to help our FFG clients throughout their financial journey, from being first-home buyers to investors, to reach their financial destination.

For this reason, we like to keep in touch, and our incredible team members Bianca and Amba always check in one year after your settlement to see how you are going and if there is a better option for you.

Bianca says in the video below that a lot can change in a year, both in the financial landscape and within your family!

If we can save you money, ease financial stress or help you to reach a new financial goal through refinancing, you bet we will be there to hold your hand along the way.

Here is more about what Bianca does and how she reaches out to our clients to ensure they receive the most up-to-date information and have the best opportunity for financial ease.

Watch the video of Bianca below;

Here

In Summary

In summary, refinancing can be an excellent choice for your family, and We help you make the best decision and look after your financial goals.

In summary, refinancing can be a powerful tool to reduce your payments, lower your interest rate and loan term, or release equity.

We will help to ensure it is the right move for you and your family and help you to get closer to your financial goals.

If you are almost into one year or have your loan, you will hear from Bianca and Amba soon, and if you would like to book an appointment with us, please call us on 03) 8657 8664 .

Also, we invite you to take advantage of our free resources, head to our website with loads of eBooks, blogs and information for you to enjoy!

SOMETHING CLOSE TO OUR HEARTS!

Mon, 19 Dec 2022 01:38:43 GMT

We wanted to share something very close to our hearts here at Future Finance Group.

As a business that continues to grow and serve more and more clients, it is essential to us that we support the community.

We do this throughout the year with several local clubs and events to which we are happy to donate and offer our time.

One charity in particular that we have aligned ourselves with is R U OK?

We continue to commit to supporting them because we know the difference they make in people's lives every day.

In this post, we wanted to highlight this charity and how we have contributed to them come the close of 2022.

What Is R U OK?

R U OK? is most likely familiar to you as they have an annual R U OK? day that is held each year on the second Thursday of September.

They are a harm prevention charity that encourages people to stay connected and have conversations that can help others through difficult times.

They describe their work as follows;

'Our work focuses on building the motivation, confidence and skills of the help-giver – the person who can have a meaningful conversation with someone struggling with life.

R U OK? contributes to suicide prevention efforts by encouraging people to invest more time in their personal relationships and building the capacity of informal support networks – friends, family and colleagues - to be alert to those around them, have a conversation if they identify signs of distress or difficulty and connect someone to appropriate support, long before they're in crisis.'

Website Full Of Amazing Resources!

Head to their website here for loads of great resources, where they share their vision, how you can get involved, real stories, and the option to get your workplace involved.

Tips On How To Ask If Someone OK?

Head to their website here for loads of great resources, where they share their vision, how you can get involved, real stories, and the option to get your workplace involved.

We wanted to share this graphic with you from their website, and you can click here for detailed information.

Future Finance Group & R U OK?

To do our part, we donate $10.00 from every home loan application to the R U OK? Foundation.

As we close 2022, we are proud to have raised and donated $2000 to the R U OK? Foundation. We aim to be able to donate even more by the end of 2023!

In Summary

We love what we do as a team, and if our work can impact the community, we will do it!

We are proud of the team and all our settled clients who entrusted us, which ultimately makes these acts possible.

Keep doing good in your community wherever you can, and consider how your workplace can get involved at a corporate level too.

We would love to know how you help in your community and what charities you will be supporting in the year ahead

We chat with our Festive Founder, Amie!

manager@futurefinancegroup.com.au (Bree Jones) — Wed, 30 Nov 2022 00:31:13 GMT

Amie is an admired businesswoman within the FFG team and the broader community.

It’s clear how much she loves her business, team and clients, as well as getting into the festive spirit!

I sat down with her to chat about festivities and what she is most proud of this year. So grab a coffee and enjoy getting to know a bit more about the founder of Future Finance Group.

Before we dive in, are you more of a fruit cake and custard or a pavlova girl on Christmas Day?

Pavlova, all the way! I love a pavlova topped with fresh summery fruits and maybe a sprinkle of chocolate!

It’s no secret that you love your team. What are you most proud of the FFG team for this year?

The team all go above and beyond every day, and I am incredibly proud of their efforts.

This year, the entire team enrolled to further their education.

They picked what they would like to further their skills in, and now we dedicate every Friday to this study. I am so proud of the team for embracing this.

What about you? What are you proud of yourself, professionally or personally?

I received two nominations this year for the Women in Finance Awards which was terrific, and I am so grateful to have been considered.

I have also booked a holiday to Fiji for my whole family.

Excellent, and what are your holiday plans for the festive season?

I am going to my holiday house in Casuarina, NSW, to spend some much-needed time at the beach!

Apart from some beach time, what do you love about the Christmas season?

I love to watch a good Christmas movie!

I also love spending time with my family. Being an Aunty brings me great joy, I love seeing my nieces and nephews excited on Christmas day.

That is so special; what does Christmas Day look like for you and your family?

Lots of laughs, games, presents, too much food and maybe an afternoon nap!

Lastly, what are you excited about for FFG and you personally in 2023?

Our team will all be getting their diplomas, which is fantastic, and I also hope to work hard and reach $1 billion in loans for my career.

Personally, I will be getting stuck into more healthy habits and continuing to be grateful and enjoy every day!

In Summary

I hope you enjoyed getting to know Amie a bit further, she leads a fantastic team that all have their clients and their community at the forefront of their minds.

They also have some exciting plans for 2023, but first, they will have a little break. Be sure to check out their free resources and other blogs over this time.

Until then, stay safe and Merry Christmas.

Guest blog written by Tameka Vanderwert - Happy Little Socials

Fast Tips When Applying For A Home Loan!

manager@futurefinancegroup.com.au (Bree Jones) — Thu, 24 Nov 2022 00:31:57 GMT

Grab a coffee and sit down to read these great tips, which, if implemented, will have you prepared and in the best position to apply for a home loan.

We have made this easy to follow, and you can start working away at them now. If you have any questions, reach out to one of our team.

Share this with a friend or family member you think could also benefit from this post!

Let's get started!

Honesty Is The Best Policy!

That's right, while we hope you are honest in your everyday life when it comes to applying for a home loan, you must be crystal clear and honest, especially when it comes to these points;

Honesty Tips

Be honest with us; knowing the complete circumstance from the beginning is easier. We can work then on finding the right solution for you and your family.
Be honest about your relationship and family status.
Be honest when declaring your earnings.
Be honest when it comes to declaring earnings etc., to Centrelink; that way, your families tax benefits will align as they should.,

Everyone has different circumstances and challenges, and we will always do everything to help you. We need you to be upfront from the beginning so we can work our magic!

Let's get into some Do's & Don'ts

Do’s

Start getting your paperwork ready! The more organised, the better when it comes to applying for loans. Start to gather your ID, recent payslips and bank statements.

Do have a separate bank account for savings. Have an everyday account you live out of, and then keep a separate savings account.

Do you know your employment status? Are you full-time, casual or part-time?

If unsure, speak to your employer and refer to your contract.

Do monitor your living expenses.

There can be some hesitation when people hear the words' budgeting' and 'money tracking'. These actiosn are not scary; instead, you can feel empowered by sitting down and determining exactly where your money is going and how much it costs to live your lifestyle. Also, where can you cut down, and what are the necessities?

Show consistent savings patterns; when you have your expenses clearly defined, you can see how you can consistently save!

Dont's

Don't have multiple credit cards! This a reminder that the banks will consider your card limit, not how much you owe.

Don't apply for Zip pay or After pay

Don't cash advance of your credit card.

Don't hesitate to ask us any questions!

In Summary

We have covered that honesty is the best policy, do more of the 'Do's' and less of the 'Don'ts', and you will be in a great position to take the leap and apply for a home loan!

We have a range of blogs here that you can refer to for more value-packed information.

Remember, we are here to help you; please call us at (03) 8657 8664 if you have any questions or would like to make an appointment to see us!

Have You Heard Of A Guarantor Home Loan?

Thu, 06 Oct 2022 03:37:44 GMT

A guarantor loan may be for you if you have family members willing to use their property equity to help you secure a loan.

We know that getting that deposit together can be hard; this is a great option if you don’t quite have the deposit but know you can service the loan repayments.

A guarantor loan means that a lender is willing to take a portion of the family members (‘guarantors’) property as security to secure a part of the purchase.

They do this by using the equity in the guarantors’ property therefore; a valuation will always be conducted to assess that sufficient equity is available.

*Please note only certain lenders will accept these types of applications.

Understanding the responsibilities of a guarantor

There are responsibilities that a guarantor must consider before agreeing to this.

The main responsibility of a guarantor is that they will be completely responsible for repaying the debt obtained by the borrower (purchaser) if and only if the borrower cannot meet their repayments under the loan.

The lender will always ensure that guarantors meet lender policy criteria and are deemed, acceptable guarantors.

In making this decision, they will consider factors such as the valuable asset to liability ratio, income and ability to repay the loan if the borrower cannot, exit strategies, etc.

Most lenders also request that guarantors obtain independent financial and legal advice when signing legally binding loan Contracts.

The loan will always be in the name of the borrower, not the guarantor. The borrowers are directly responsible for the loan however the guarantor must be able to repay if the borrowers do not.

Key benefits of using a guarantor

The main benefit of using a security guarantor is that the borrower will not incur charges for Lender’s Mortgage Insurance.

This often amounts to a saving of thousands of dollars.

Provided there is a steady increase in the market and the purchasers maintain their loan repayments & property in good order, a new valuation can be ordered 2-3 years following the purchase to re-assess the transaction structure.

In a few short years, there may be sufficient equity and loan balance reduction in the property to release the guarantors and discharge them from the guarantee.

In summary

As you can see, having a guarantor can be a great benefit to a first home buyer, be aware that only some lenders will allow this type of loan, so be sure to speak with us to find out your options!

We have a range of blogs here that you can refer to for more value-packed information.

Remember, we are here to help you; please call us at (03) 8657 8664 if you have any questions or would like to make an appointment to see us!

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ARE YOU READY TO BUY YOUR FIRST HOME?

Thu, 30 Jun 2022 21:30:00 GMT

When buying your first home, it can be helpful to think about who you need to engage with and when to help you purchase your most significant asset to date!

There will be a few different people whose assistance you may require, such as Brokers, Real Estate Agents, Conveyancers and more, and they will become an essential part of your experience to make the process as smooth as possible.

In this blog, we will run through the different parties involved, how it all works, and a great ‘ideal timeline’ of when to engage each person, so get ready to take some notes because this will be a good one!

Brokers

Not surprisingly, we will start with Brokers and Banks. As a first-time buyer, you will likely not have all the funds to cover your purchase and will need a loan.

The benefits of having a broker working on your behalf mean you can rest assured your loan structure will cater to your needs and that you are paying the best interest rate possible for your situation.

Top Tip

“When approaching banks directly for home lending, keep in mind that they will only be able to offer you loans exclusively with their bank. It sounds like a simple concept, and however, this can be quite limiting where lenders apply a ‘cookie-cutter’ approach to lending with limited awareness of your personal circumstances.”

Examples of questions brokers will help you answer:

How much can I borrow?
What will the purchase cost me?
What are the associated fees and charges?
Do I have to pay stamp duty?
What is the First Home Owners Grant, and does it apply to me?
Do I have enough of a cash deposit?

These are questions you should have the answer to before you begin looking at homes.

Solicitors / Conveyancers

Once you’ve found the perfect home, transferring the property into your name requires legals and paperwork. Once you sign the Contract, the conveyancing process will need to begin, and if you have not already done so, you will need to engage a solicitor or conveyancer to act for you until settlement.

Real Estate Agents

Real Estate Agents will be your first point of contact, especially as you start to attend open for inspections.

It is important to note that Real Estate Agents are retained and paid by the Vendor (seller) and must therefore primarily look after their clients’ interests first. For this reason, market knowledge, research, and entering into well-informed negotiations are crucial when making your first purchase.

Pest and Building Inspectors

We encourage all buyers to engage a pest and building inspector to inspect the property they intend to purchase and have this written into the contract. The principle of caveat emptor applies when you sign a contract of sale – this is Latin for the principle of “Buyer Beware”.

If a purchaser signs a contract for a house structurally unsound or riddled with termites, the law does not allow purchasers to claim they ‘did not know’. With a financial commitment of this size, getting pest and building reports to ensure there are no nasty surprises is imperative.

Financial Planners

Once you’ve taken the exciting step of purchasing your first home, you must obtain the proper insurance(s) to protect your most precious asset/s. This is not only limited to your new home but also includes the most precious asset – you! Life Insurance and Asset Insurance all form essential aspects of your financial future and can be addressed with the assistance of Financial Planning experts.

Now that you have this information, where do you begin, and who should you approach first?

Ideally, start with a Broker, and find the answers to the abovementioned questions. Then head to some open inspections and speak with your local real estate agent about what you are searching for.

From there, engage a conveyancer as well. When you put an offer in for a property, be sure to include a building and or pest inspection into your contract and then you can seek an inspection professional.

Refer to the below diagram for more information and as a guide for an ideal timeline!

Remember, though, that a broker is where everyone should start their home-buying journey. Don’t walk into the process of home-buying with uncertainty!

To gain tips about buying properties for auction or private sale, check out our earlier blog here , and if you have any questions for the team, give us a call at (03) 8657 8664 .

PROPERTIES FOR PRIVATE SALE OR AUCTION, WHAT YOU NEED TO KNOW AS A BUYER!

Tue, 24 May 2022 01:25:00 GMT

When you are glued to relaestate.com looking for a property for sale and attending multiple house inspections, it’s good to know what you can expect from a property being for private sale versus it being up for auction.

It can be daunting, especially as a first home buyer, to step into the ring of property negotiations. We understand this so we have put together a few tips, and outlined some pros and cons to buying at auction and buying via a private sale to help you feel well equipped with information and be ready to make that dream property yours!

WHAT IS THE DIFFERENCE BETWEEN PRIVATE SALE AND AUCTION?

An auction is when prospective buyers come to bid on a property on a specified date and time, whereas with a private sale, there is no fixed time frame – the property is on the market until it sells.

PRIVATE SALE – WHAT TO EXPECT

There are quite a few pros to a Private Sale as a buyer. One of the main ones is it’s a less stressful environment, and there is less urgency than at an Auction. You have the freedom to negotiate with the Vendors via a Real Estate Agent without as much pressure on time.

Further pro’s to a private sale include;

Flexibility in terms, you can incorporate specific terms into your contract to suit your needs. This can include when a deposit should fall due or when settlement should be.
As a general rule, buyers will get a three day cooling off period from the date they sign the contract, so there is an option to opt out if you need to.
Private sales allow you to place conditions in the contract for your benefit, such as ‘subject to finance’ or ‘pest and building’ clauses.

There is a couple of con’s when it comes to private sales. There may not be immediate certainty that the property is yours until it goes unconditional. Also, you may be unaware of how much competition you have when making your offer, as you are just dealing directly with the Real Estate Agent.

AUCTION – THE PRO’S AND CON’S OF BUYING AT AUCTION

One of the pro’s to buying at auction is that you have certainty. When that hammer falls, it’s all yours! Not only that, but you know exactly who your competition is and how much interest there is at the Auction.

There are a few con’s or things to be aware of when bidding at an Auction;

Sense of urgency has to be the main one, it’s easy to get swept up in the emotion of an Auction, it can be an intense atmosphere.

The direct competition and pressure of the situation can make you go a bit further out of budget than you like, so be aware of this before you go into the situation and know how much you have to spend and when to let it go.

Further points to consider;

It is an unconditional purchase which means there is no cooling off period or conditions for your protection.
You will need a deposit on Auction day. Usually, Vendors will require a 10% deposit to be payable on the Auction date. This amount will, of course, vary according to the sale price.
Unknown Reserve, a ‘reserve’ refers to the lowest price the vendor is willing to sell for. It isn’t easy to know where the goal posts sit at an Auction.

The key here is not to get caught up in the environment of an Auction, to know what you can spend and have a plan to keep calm under pressure.

“Home sweet home. This is the place to find happiness. If one doesn’t find it here, one doesn’t find it anywhere.”

M.K. Soni

In summary, whether buying via private sale or auction, do your research, know your budget and what you really can afford, stay calm and have a plan! We wish you the best of luck and remember we are just a phone call away.

Click here to see the latest auction results Melbourne and if you need some tips on saving for a house deposit to buy that dream home, be sure to check out one of earlier blogs, How To Grow Your House Deposit .

The post Properties for Private Sale or Auction, What You Nee d To Know As A Buyer! appeared first on Future Finance Group .

HOW MUCH CAN I BORROW?

Fri, 22 Apr 2022 04:36:00 GMT

Of course, this is an important question; but it’s one thing to know your borrowing power and another to see what you can REALLY afford!

When taking out a mortgage, your choices have long-lasting implications, so you need to approach borrowing with a healthy attitude; let’s take a look!

WHAT CAN YOU REALISTICALLY AFFORD?

The first step is to get to know your numbers!

What is coming in and out weekly and monthly? List all your income and expenses; get crystal clear on everything moving in and out of your accounts.

Once you have done that, add in an additional mortgage payment expense; what does this look like? How much can you afford to put towards it and still live the lifestyle you desire?

ARE YOU COMFORTABLE WITH REPAYMENTS?

You deserve to live the lifestyle you want; however, it can be helpful to look at where you may be able to cut down or find an alternative to some of your regular spending. That may be to do with social activities, memberships, and regularly eating out; small expenses like this can add up over time, meaning you may have more money than you think to put towards your repayments.

ANY IDEA WHAT THE FUTURE MAY HOLD?

We don’t expect you to have a crystal ball and know the future, but maybe you are a two-income household that will temporarily change to a one-income home as you grow your family. Or maybe your earning capacity is due to increase soon.

There are many possibilities and ‘what ifs,’ but if you have some substantial future changes on the horizon, factor them in as they can affect your affordability.

In addition to asking yourself the above questions, we have a few little tips for you;

When borrowing, don’t over commit and remember to consider your lifestyle
Be realistic; get into the market with what you can afford and then build up to your forever home as you grow your equity and earning capacity
Keep in mind your life plans as to not put pressure on yourself if your circumstances are likely to change
When purchasing a property, remember there are extras to consider, for example, stamp duty and mortgage duty, relevant property inspections, solicitors and application fees, and ongoing commitments, including council rates, possible strata or body corporate costs, and utility bills.

Our role as mortgage brokers means that we get to know you and your circumstances personally, so we may have more flexibility around a home loan than if you were to go straight to one of the big banks, which will only look at your deposit and income.

We are always here to help guide you to your best financial future. If you have any questions, please reach out to us.

Here you will find a range of helpful calculators, including ‘ Borrowing Power ’, which will assist you with the ‘How much can I borrow’ question and a mortgage calculator (Australia)

You can also look here at a Property Market Research tool to find information about the current property market.

We hope you have found this article helpful, be sure to share it with your friends and family who might benefit from it too!

MANAGING YOUR MORTGAGE

Mon, 22 Nov 2021 05:37:00 GMT

TIPS FOR EFFECTIVELY MANAGING YOUR MORTGAGE

Managing your mortgage effectively is one of the best ways to help avoid mortgage stress. Below are our top tips:

1. TRY AND PAY MORE THAN THE MINIMUM

To understand why paying above the minimum repayments is so effective in managing your mortgage, it helps to recognise that at the beginning of the loan term payments are paying mostly interest. There is very minimal reduction to the principal of the loan (amount borrowed). However, any additional amounts pay down the principal directly – reducing the overall life of the loan, and the total interest payable. Win, win!

2. HAVE ALL YOUR DIRECT DEBITS COME OUT ON THE SAME DAY

Multiple direct debits, with varying dates across the month can be difficult to track. Coordinating all your direct debits to come out of your account on the same day can help avoid your transaction being declined or account being overdrawn. So, check your scheduled transactions in your internet banking and adjust the dates, or, for externally managed payments, you can contact the creditor/supplier and request a change of direct debit date.

3. STAY INFORMED OF THE CURRENT FINANCIAL CLIMATE AND RATE CHANGES

Keeping up-to-date with what’s going on in the world of finance and real estate can help you make proactive decisions. You can look at rate information via the RBA, or join our mailing list for a monthly update.

4. CHECK YOUR MORTGAGE ACCOUNT FREQUENTLY AND MAKE SURE ALL ACTIVITY IS NORMAL

Like with any account, monitoring the transactions for anything out of the ordinary is an important part of managing your mortgage. Unfortunately, mistakes are sometimes made, so the sooner you pick them up and raise them with your financial institution, the better.

5. ENSURE THERE ARE NO OVERDRAWS

No one likes it when their account is overdrawn, or when transactions are declined. Stay ahead of your account and actively monitor it to ensure that your payments can be made on time, and without any overdraws.

6. DON’T LIVE OUT OF YOUR MORTGAGE ACCOUNT – HAVE A SEPARATE BANK ACCOUNT PURELY FOR YOUR HOME LOAN DIRECT DEBIT

One of the best ways you can ensure your mortgage payments are always available and paid on time is to dedicate a separate account for your mortgage amounts to wait until payment is made. This will ensure you have the funds available, and remove any temptation to touch them in the meantime.

A NOTE REGARDING MORTGAGE STRESS

If you are already experiencing mortgage stress and are not sure if the above tips will help you, why not come and have a chat? We’d love to look at your options with you to see how this could be addressed to make managing your mortgage easier moving forward. Contact us he re or call 03 8657 8664 and let’s make time to connect.

SAVINGS TIPS TO GROW YOUR DEPOSIT

Wed, 22 Sep 2021 00:40:00 GMT

TIPS AND HABITS TO GROW YOUR HOME LOAN DEPOSIT AND STRENGTHEN YOUR APPLICATION.

One of the first things that comes to mind when thinking of purchasing our first home is the deposit. Here are some tips and habits that can help you both grow your deposit and strengthen your home loan application when the time comes.

TIPS AND HABITS

Our spending habits have the power to super-charge us toward our home ownership goal, or sabotage it (you can read about how our spending habits affect loan applications here ). Below are some habits that can help boost your savings:

1. AUTOMATE

If you set an automatic transfer of your savings as soon as your pay arrives, you will hardly miss it! (But if you don’t, you might feel you can hardly live without it.)

2. BUDGET FOR FUN

Do you have an outing or special occasion coming up? You don’t have to say no, just set a realistic budget for yourself (and keep to it).

3. CELEBRATE

Breaking down your larger target into smaller milestones makes the task feel more manageable and provides opportunities to celebrate your progress! (This will also help you stay positively motivated to save when you have to say no to spending.)

4. DITCH THE DELIVERY SERVICE

Covid may have us splurging less on great Melbourne coffee, however food delivery services have boomed. Save by ordering direct from the store, or change it up by finding a great recipe online and giving that a go instead.

"Beware of little expenses. The smallest leak can sink a great ship"

Benjamin Franklin

5. EVALUATE SUBSCRIPTIONS

Regularly check and monitor what you’re using, and what you’re paying for. Don’t pay for what you don’t use (or keep what you feel you can do without).

6. FREE CASH

Used wisely, membership and credit cards that offer cash back can put noticeable money back in your pocket. Note, no rewards warrant over-spending, and it’s important to pay credit card balances monthly.

7. GET CONNECTED

Regularly connect with people who can help guide and motivate you toward your goal. Having a team in your corner can increase your chances of success.

"Find a group of people who challenged and inspire you, spend a lot of time with them, and it will changed your life forever"

Amy Pohler

8. HIDE YOUR SAVINGS

Consider a quality savings account that is completely separate from your regular bank accounts – potentially with a different financial institution.

9. INSPIRE YOURSELF

Know what makes you tick and tap into that as a way of keeping yourself inspired and motivated. This may be through a vision board, a goal tracker, regular affirmations, visiting the area you wish to purchase in, etc.

10. JUST GET STARTED!

Regardless of where you are, the best and most powerful way to achieve your goal is to start.

"Find a group of people who challenged and inspire you, spend a lot of time with them, and it will changed your life forever"

Amy Pohler

GETTING STARTED

HAVE A TARGET.

One of the fundamental steps to saving your deposit is to have a target. Things to consider when establishing your savings target include:

Your current financial position
Your borrowing power
How much you want to spend

Once you have identified your target, put it in writing along with your end goal – the more detailed and specific you can be, the better!1 If you’re not sure how to work out an appropriate target, we’re happy to help.

"You can't hit a target you cannot see, and you cannot see a target you don't have."

Amy Pohler

KNOW WHERE YOUR MONEY IS GOING.

If you’re not already intimately familiar with where your money goes on a regular basis, it’s time for a date with your bank statements. Reviewing your past spending is eye-opening, and the first step to helping you take control of where it goes in the future – an essential part of maintaining any savings plan.

HAVE A PLAN (AND STICK TO IT).

Once you’ve identified your target, your position and your spending habits (to date) you have what you need to make a plan – we could call this a budget – to make sure our expenses are met, and our savings can grow.

"If you think you're not ready, it's always good to reach out to have plan in a place. You will be suprised where you actually are. Plus you might get some tips to motivate you!"

Yvonne, Future Finance Group Mortgage Broker

Along the way things might not always go according to plan, don’t be disheartened. Always keep your eye on the prize and get back towards your savings path if you stray.

SOURCES AND HELPFUL LINKS:

https://www.forbes.com/sites/markmurphy/2018/04/15/neuroscience-explains-why-you-need-to-write-down-your-goals-if-you-actually-want-to-achieve-them/?sh=569425b07905

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2021

EQUITY

Thu, 12 Aug 2021 03:05:00 GMT

EQUITY.

IT’S A HOT WORD IN 2021, AND DEPENDING ON THE DEFINITION, A HOT TOPIC TOO.

It’s one of those fun english language words with multiple meanings.

Standard dictionary definition will tell you it’s about the value of shares in a company.

It will also reference the quality of being fair and impartial (though for a better understanding on this one, check out the Global Citizen link below).

However, add the word property and you’ll find something similar to how NAB describes it: “the difference between the current value of your home and how much you owe on it”. This is what we want to tap into.

(If you’re not yet a property owner, don’t check out just yet! This is for you too.)

Property equity is valuable for both the present and future:

Improve quality of life in the present;
Use equity to support investment;
Cumulative equity released to support retirement lifestyle

Ultimately, it is the equity in property that draws us to purchase property. (Aside from the freedom to do what we will with our own four walls!)

IMPROVE QUALITY OF LIFE IN THE PRESENT

The most obvious in this space is owning your home outright, therefore having no “four walls” payments (rent/mortgage). For the majority of us not there yet, there are a couple of other ways equity can improve quality of life in the present:

Refinancing to access some equity as cash to fund significant purchases, renovations*, or travel;
Refinancing your mortgage to reduce your payments freeing up more of your income for other living expenses.

*Renovations are a great use of equity when done with consideration as it can further increase your equity. Why not check out one of our blogs on renovating here or here ?

EQUITY TO SUPPORT INVESTMENT

This is an often overlooked opportunity that arises through home ownership. Without accessing equity in your home through refinancing, you can use existing equity as a deposit for purchasing investment property. This of course increases your ability to build further equity (which is great for point 3!).

It can also be used as collateral for other investments.

CUMULATIVE EQUITY FOR RETIREMENT LIFESTYLE

There is no time too early to start thinking about your retirement lifestyle and what that will cost to fund. While Superannuation is one way of supporting this, property investment has proven to be a trusted way of building wealth to support retirement. While selling the roof over your head to fund your retirement is not likely the solution, having investment property with equity that allows you to do just that is a different story!

WHAT SORT OF DOLLARS ARE WE TALKING ABOUT?

Despite the challenges that began in 2020, Australian property values have come along in leaps and bounds. According to the latest CoreLogic property data, the average Melbourne house value increase last month was 1.68%. While, that might not sound like much, but on a property valued at $750,000 in June, that’s an increase of $12,600. (And if you want to look at the past 12 months, we’ve had an increase of 12.34% – that’s $92,550 on a house valued at $750,000 this time last year!)

WHY ARE WE TALKING ABOUT THIS?

Knowing options for improving life in the present and the future enables action – action that could make a real difference. If you ask our team members what gives them job satisfaction, you’ll find many of the answers centre around helping people achieve goals, get the right solution for their situation and set themselves up for a very positive financial future.

SIMPLY PUT, EMPOWERING YOU TO ACHIEVE A POSITIVE FINANCIAL FUTURE IS OUR JAM.

Regardless of where you’re at (long-term homeowner; property investor; new home-owner; or still saving a deposit), property equity – and what it can do for you – could be a cornerstone of your plan.

Why not look at your current situation, goals and how we can connect the two? Contact us , give us a call on (03) 8657 8664, or reach out to us on Social Media (we’re on Instagr am and Facebook ). We are here to help.

Global Citizen link on Equity & Equality . Please note, by sharing this link we are not declaring any affiliation with, or support of, the organisation Global Citizen.

SOURCES AND HELPFUL LINKS:

THE X FACTOR

Wed, 04 Aug 2021 13:55:00 GMT

Everyone wants it, but not everyone’s got it – that special something, the Je ne sais quoi – the X factor.

While it may be rare, we’ll stand proudly and say we believe we’ve got it – and it’s all for you!

So, what makes us different?

Connection

We listen. Taking the time to really connect and understand our clients, their situation and their wants and needs. It is our aim to deliver solutions best suited to each individual.

Process

We have developed a client-centred process, proven to provide a positive, consistent, quality experience for every client. This is your future and your finance – we want to ensure this is a process you remember for all the right reasons.

Teamwork

We know that strong, positive working relationships mean a better working environment and better results for our clients. We are a powerful team focused on working with you, and with our trusted partners, to provide excellent results to meet your needs.

Honesty

As a team, we know and own our values – one of our most important being honesty. We don’t over-promise. We’re upfront. We’re realistic about what can be achieved.

Attention

Our attention to detail is second to none. Whether it is the little details that make our clients feel at home and appreciated, or the nitty-gritty in the paperwork. We know it’s all important when it comes to a great outcome for you (and an enjoyable process along the way).

Energy

Age is just a number, youth is an attitude of possibility and innovation! We’re young-at-heart, energetic and leading the way in our industry.

As brokers, our job is to find the right solution for our customers, helping them obtain the finance needed to reach their goals. But as the Future Finance Team, our vision goes beyond our job. We embrace our customers as unique members of the FFG

family, and our focus is on your future.

Don’t just take our word for it. Come in and find out for yourself, let’s see what we can achieve together!

RENOVATORS DELIGHT

Mon, 19 Jul 2021 08:06:00 GMT

Renovators Delight might be industry speak for “might do better to knock it down and start again” – but that’s not where we’re going. With the current market price trends (still upward), it can be discouraging when looking at purchasing property. However, renovators delight!

Whether you are a property owner thinking about an upgrade, or looking to purchase for the first time, now might be the time to consider renovating as the next step.

By dictionary definition, to renovate means “to restore to a good state of repair” but the more appropriate and accepted use would be to “change, refresh or reinvigorate”.

PURCHASING AND RENOVATING

The old adage “worst house in the best street” might never have been more relevant than now. While you wouldn’t want to purchase a house in disrepair, selecting a house that is outdated and in need of a lift could be worth considering.

Of course, your renovation doesn’t have to take place straight away – but may form a strategic part of your plan.

Renovating existing property

Renovation can take place in a variety of shapes and sizes: landscaping; additions; moving walls; replacing bathrooms; touch-ups; painting; and minor repairs. When assessing your existing property and whether renovation is a good next step, the first question to ask yourself could be, “What is the outcome I want to achieve?” Closely followed by, “How much should I spend?” And, “Is my outcome achievable with this property, within this budget?” If the ultimate answer to the final question is yes, it’s worth doing some homework.

Things to consider

Regardless of where you’re at, there are a number of considerations as well as fairly standard pros and cons.

Potential benefits:

Improves asset appeal, liveability and value
Increases equity
Provides an opportunity to get creative
Results in a sense of achievement

Of course, there are some things to be cautious about.

Renovating requires a degree of flexibility in the budget as unexpected costs can arise, potentially blowing the budget, or worse, leaving you with incomplete works.

It pays to be thoughtful about what changes are worth making, what you can safely DIY, and when to call in the experts. A DIY that should have been completed by someone more experienced may negate some of the possible benefits.

Then there is that big word, ‘overcapitalising’. This happens when your debt outweighs the value of your asset. When considering your decision to renovate it’s important to take into account:

Current property value and equity you have in the property
How your property compares with others in the area
The costs of your proposed renovation
How you will finance your renovation

That’s where we can help. Not only do we have the knowledge and experience to help you capitalise on your financial situation to your advantage, some of us have even done it ourselves and can share our stories! We’d love to help you discover what you can do with your property – call us on (03) 8657 8664 today (or contact us here ) .

TOOLS TO TACKLE REPAYMENTS

Thu, 24 Jun 2021 01:14:00 GMT

Tools to Tackle Repayments

Repayments. The word alone can bring with it stress and anxiety regardless of what debt your repayments are servicing.

If it feels overwhelming, don’t despair. It doesn’t have to be a life sentence! Here are a couple of financial tools you can wield to take command of your debts and repayments: Consolidation; and/or Refinancing.

Which tools are right for you will depend on your situation.

CONSOLIDATION

By definition, to consolidate means to combine a number of things into a single, more effective whole. Debt consolidation being the bringing together of two or more debts into one more effectively serviced debt.

Who might be able to benefit from consolidation?

Anyone who can say “that’s me” to one or more of the following points:

Trying to keep track of multiple debts
Struggling to manage multiple debt payments
Paying varying interest rates (especially if they are high)

What are the benefits of debt consolidation?

The best thing about debt consolidation is that it creates a clear, defined picture of your debt – giving you the opportunity to see down the timeline to when you will be debt-free, or able to look into more opportunities such as renovating, travel, or investment.

This clarity results in reducing the stress that multiple debts and financial uncertainty can cause.

(Not to mention the financial savings that can arise through reducing: interest rates; late payment fees; and other costs associated with servicing multiple debts!)

Amie explains more about Debt Consolidation here .

REFINANCING

The term ‘refinancing’ typically refers to the process where a mortgage is bought out, or taken over, by another lender and/or product. Typically, at a lower interest rate, resulting in financial savings for the borrower (you!).

Who might be able to benefit from refinancing?

Anyone who has a home loan that has not had a health check in the last 12 months, especially if any of the following apply to you:

A change in income
An increase in property value
A mortgage over 5 years old
An interest in accessing equity
A desire to pay off your mortgage sooner

What are the benefits of refinancing?

The benefits you receive from refinancing will vary based on your reasons for doing it, however the most significant is typically financial savings by way of reduced interest rates giving you lower monthly payments and/or a shorter loan term.

Of course, refinancing can also provide you with cash access to some of your home equity if you are wanting to renovate your home or look at investing.

Narida discusses refinancing here .

YOUR FUTURE, IN YOUR HANDS.

The important thing to remember is that how things are today is not how they have to be tomorrow – but the decisions you make today, have the power to make the difference.

We’re here to help. The Team at Future Finance are dedicated to our client’s goals and we love nothing more than to see their success! Give us a call today on 8657 8664 (or contact us here ). We can help you see a clear picture of your current situation and set you on the path to reduce your stress so you can look forward to new opportunities.

GET READY FOR TAX TIME

Wed, 09 Jun 2021 07:23:00 GMT

Whether you are working with an Accountant or Agent, or going it alone, it is important you get ready for tax time. And while the latest ATO electronic lodgement system pre-fills some information, you need to be able to verify this information and support your deductions.

Here are some key steps to getting tax time ready:

1. GET YOUR BASIC INFORMATION TOGETHER

Tax File Number
Bank Account Details
Medicare Card
Health Insurance Details

2. DECIDE HOW YOU WILL LODGE YOUR RETURN AND MAKE A PLAN

If you will lodge your return with the help of your Accountant or a Tax Agent, now is the time to make that appointment and get the ball rolling! Working with an expert can help give you confidence you’re both compliant and maximising your return.

If you are going to lodge it yourself using myTax be sure to familiarise yourself with the instructions and details of eligible expense claims.

3. Document your earnings

Are you an Employee? Your employer is required to provide you with a PAYG Payment Summary by the 14th July (though some issue them much sooner).
Are you Self-employed? Work with your bookkeeper and/or accountant to establish your earnings.
Do you have investments? You will need to gather information about any shares, managed funds, interest on bank accounts, or other investments.

4. Collate your receipts (& documentation for other expenses)

Get your receipts together! If you haven’t been using an electronic system to manage your receipts, make sure you spend time now to collate them to support your claims. (Apps such as ATO, ReceiptBank, etc can make this an easier process next financial year.)
Consider your work-related expenses such as uniforms, training and what you can claim for working from home. Some of these may require records such as timesheets, invoices, or other documentation.
Check your work-related travel records. We might not have been able to travel nearly as much as previous years, but don’t forget what work-related travel did happen.
Are you self-employed? Work with your bookkeeper and/or accountant to assess your business expenses.

5. Gather additional information

Do you have a partner? If so, what is their taxable income?
If you pay child support, how much did you pay this financial year?
Do you own a rental property? You will need to collate information on rent received, interest paid on the mortgage and any other property related expenses (check for receipts!)

We are passionate about long-term relationships with our Clients and empowering them to fulfil their future financial dreams. Learn more about our services here .

Sources and helpful links:

TALKING TO YOURSELF: A POWERFUL TOOL FOR CHANGE

Wed, 19 May 2021 11:51:00 GMT

Have you heard “talking to yourself is fine, but you need to worry when you start answering”? Well, it may be time to let that go as current psychology tends to disagree, instead suggesting self-enquiry (asking yourself questions) as a powerful tool for change.

Financial psychology* tells us that building awareness of our beliefs, thoughts, and feelings about money, equips us to better understand and take control of our decisions and behaviours. Why? Because when it comes to our finances, like it or not, we cannot escape the impact of our emotions, our family or our past. They all directly influence our spending, saving and investment choices. (When purchasing real estate, there is another level of impact, so this process can be especially important.)

Start by asking questions to identify feelings, beliefs, and self-talk about money.

Then listen to the answers. This process can happen in a number of ways, but some find it helpful to process their thoughts in writing (handwritten or typed, it doesn’t matter). However you do it, the power lies in what you learn.

Building financial self-awareness allows us to make changes, be empowered to act, and have the inspiration to grab hold of our financial future with both hands.

Whether your next steps are to consolidate debt, refinance your mortgage, or purchase property, our Team has the knowledge and experience to help you take them. Why not give us a call on 8657 8664 or contact us here ? We are cheering for your financial future!

*Also described as ‘Economic Psychology’, ‘the Psychology of Money’ or ‘the study of money-related behaviour’.

Sources and Links:

DREAM A LITTLE DREAM

Sun, 18 Apr 2021 14:18:00 GMT

Once upon a time, the Great Australian Dream was to own your own home. Recent news articles might have you believing it has become the Great Australian Nightmare. Demand for housing is increasing, and sales prices along with it, pushing the median house price in greater Melbourne to an anticipated $770k by the end of the year. It may be starting to feel like owning property is out of reach. (Tip: it’s not!)

If you’ve been monitoring house listings over the last couple of months you could be forgiven for missing great properties that came and went while you were away making yourself a cup of coffee. (In some areas, properties have been selling in a matter of days – barely touching the online platforms!) Great for those selling – tricky for those wishing to buy. (Tip: it pays to be ready to go!)

For those with property, this is all fantastic news, but it may appear grim to others who are not there yet. The important thing is – don’t despair!

Taking the following steps can help you toward your goal:

Know where you stand
Know what you want
Know what you need to do to get there
Know what options are available

The great news is, we have lots of experience helping people just like you: be clear on your position; how to strengthen your position to reach your goals; and get the keys to your first property into your hands sooner than you thought possible.

We’d love to help make your dream a reality!

Sources and Links:

DON’T BE FOOLED!

Wed, 31 Mar 2021 09:25:00 GMT

If you are like 30% of the Australian population, you likely already have a Buy Now, Pay Later (BNPL) account – or at the very least, you’ve considered getting one. (And if you are under 30, the likelihood is much higher.) We are talking about the likes of AfterPay, Zip, Humm, and the soon arriving ‘Pay in 4’ offering from PayPal.

Often compared to layby, they are not the same – and there are some significant differences.

With layby, you select your purchase and pay off the amount (without interest or fees) while the store looks after it until paid in full. You then get to experience that sweet moment when you pick up you goods, knowing there is nothing more to pay. Bonus! However, with BNPL, there is no waiting. You get the immediate thrill of the purchase from the beginning – with the sour aftertaste of ongoing payments. The repayments are still interest free – but not fee free.

In fact BNPL providers in the 2018-2019 period raked in over $40 million dollars in late-payment fees* alone. Add to this monthly account fees, payment processing fees, additional payment fees…. In some cases, the list goes on (and on and on), negating any “no interest” savings.

What does all this have to do with applying for a mortgage?

Regular and ongoing BNPL spending is considered an indicator that the spender is living above their means – a big red flag to a financial institution looking to lend.

What can you do?

If you don’t already have a BNPL account – keep it that way. It might seem attractive and a neat way to manage your expenses, but there are hidden catches that would be best avoid.

If you do have a BNPL account here are some tips:

Pay it off with your own money, don’t use a credit card. (Or you may end up paying interest on top of fees!)
Plan for your BNPL payments so they are always paid on-time to avoid any additional fees.
Talk to us about how to increase your positioning.

We love to help people at whatever stage they’re in to better their financial future and obtain their goals. Contact us today to see how we can help you. Email info@futurefinanc egroup.co m.au or call 8657 8664.

*Since the introduction of the Voluntary Code of Practice on 1st March this year, there has been the introduction of late fee caps and processes whereby BNPL providers are to notify their customers of upcoming payments. This is being implemented by those who have agreed to abide by the Code.

Sources and Links:

Photo Attribution: Sale photo created by gpointstudio – www.freepik.com

MAKE YOUR OWN LUCK!

Tue, 16 Mar 2021 23:10:00 GMT

March 17. It’s St Paddy’s Day – a time when luck is on the mind of many (as well las Guinness, four clovers and pots of gold)! But what is on our minds with regard to our finances?

In 2018 86% of Australians reportedly had no idea what their daily expenses were. (And 82% of homeowners didn’t know details of their mortgage.*) Half of those not only didn’t know where there money went – they didn’t have a budget to help guide where it should go. This makes achieving a strong financial future stressful and more difficult than it needs to be.

Mr B J Franklin so eloquently said, “if you fail to plan, you plan to fail”. Not tracking your expenses, and not having a budget or plan, is leaving your financial future to luck.

So, what to do? Make your own luck! (Let’s call it an organised plan.) Start by looking at your bank statements to identify where your money goes. Then contact us . We’d love to discuss your financial goals and how you can achieve them! We can help you understand your current situation and help make a plan for your future.

Do you feel lucky?

Email info@futurefinancegroup.com.au or call us on 8657 8664.

*Do you know your mortgage details? If not, let’s get together and look at your current arrangements and how it compares to what’s available to you today.

Sources and links

Image attribution: Woman photo created by stockking – www.freepik.com

WHY SHOULD I REFINANCE?

Thu, 04 Mar 2021 04:24:00 GMT

When was the last time you looked at your mortgage?

Compared your interest rate?

Reviewed your goals?

If the answer to the above is “I don’t know”, or perhaps “never”, you’re not alone.

However these are important things to consider because “the one unchangeable certainty is that nothing is certain or unchangeable”. (Thank you Mr. Kennedy.) Goals change, opportunities arise and circumstance evolve.

Here is where refinancing shows its value. It might feel daunting, but we are here to make sure it’s not.

Together we examine how your interest rate compares to with the current offerings and help you understand your financial position. This can reveal opportunities not previously available to you.

Narida shares important reasons to consider your refinancing options.

We’d love to have a chat with you about your mortgage and refinancing opportunities – get in touch today on info@futurefinancegroup.com.au or call 8657 8664.

VALUATION V APPRAISAL

Tue, 16 Feb 2021 06:35:00 GMT

It can be confusing, frustrating even, when a local real estate agent tells you a property is worth one figure, and a lender comes back with an entirely different one. What’s going on??

It is a question that puzzles many, you are not alone.

There is a distinct difference in what is happening when these figures are put together – and it is not simply an ulterior motive.

Let’s start with the real estate figure, called an Appraisal or Sales Appraisal.

Pre-Covid it was common to receive regular advertisements for “free appraisals” from local Real Estate Agents (unless you have a ‘no junk mail’ sticker’!). While these mailings may be less frequent, or perhaps a thing of the past, the free appraisal is still very much with us. These are conducted by a licensed real estate agent and generally form a part of a sales process. The agent will take into consideration:

Property, its features and presentation;
Market trends (both local and broad);
Recent and relevant property sales;
Personal knowledge and experience; and
Recent and relevant conversations and experiences.

These appraisals are very helpful with getting an understanding of what price bracket your property could be placed in should you choose to sell. However this figure cannot be used with lenders.

This brings us to Valuations.

These may be done at the request of the property owner, or a lender, and are not free. The average cost of a valuation is between $300 and $600, and will provide you with a formal valuation report able to be used with lenders and legal institutions. The valuation will be done by a Certified Practicing Valuer. They will look at all aspects of the building, land and location when doing their calculation. While it can be influenced by their personal experience, it should provide an independent, impartial and unbiased report. It is this figure that Lenders will use when calculating the LVR* and directly impacts the amount they will be willing to lend.

In short:

Appraisal – Free as part of a sales process and provides a sales estimate should it go to market.

Valuation – Paid report to detail the actual value of a property to determine equity or the amount that can be borrowed against a property.

Complementary Valuations

(Did we say complementary valuations? Yes!) The good news is, if you choose to purchase or refinance through Future Finance Group, as we have a close relationship with multiple lenders, we have access to complimentary valuations . If you want to know more, get in touch with our team today on (03) 8657 8664 or online and we can help you get started!

*We didn’t forget the LVR. This is Loan to Value Ratio. It is a formula to calculate the percentage of property value you are wishing to borrow. We are happy to show you what this looks like for your situation! And help you see exactly where you stand.

Sources and links:

REISA
LJ Hooker
Little Real Estate
ANZ
CommBank
Realestate.com.au

NEW LEGISLATION: YOUR RIGHTS PROTECTED

Tue, 02 Feb 2021 07:19:00 GMT

Great news for anyone planning to take out a home loan!

New legislation means consumers are even better protected when they use a mortgage broker.

The Best Interests Duty , which took effect on 1 January 2021, legally obliges brokers to act in the best interests of their clients. This new law is on top of the National Consumer Credit Protection Act , which already regulates the conduct of brokers.

Brokers must “prioritise their consumers’ interests” if there’s ever a conflict of interests, according to the legislation.

But while brokers have to follow the Best Interests Duty – banks do not. A broker must give their client the best possible recommendation from all the lenders on that broker’s panel. However, a bank will recommend only its own products, even if there are better alternatives.

Brokers act in your best interests when recommending a home loan, and have a legal obligation to do so. Banks sell you products.

This article is from our January Wrap Up. Sign up to our mailing list (below) for more!

CLEARING THE POST-CHRISTMAS HAZE

Wed, 20 Jan 2021 21:00:00 GMT

The time of fun, frivolity – and credit card debt.

As many as one in three of us over-indulged in more than just the food this Christmas, contributing to the estimated spend of $17.3 billion – somewhat down from 2019’s $28 billion (what?!). Like bad leftovers, your credit card statement might be making you feel less than merry now the festivities are behind us.

For up to 25% of us, the credit induced post-Christmas haze will linger for five months. But it doesn’t have to.

Talk to us today about how we can help you save time and money.

TO YOUR AMAZING FUTURE!

Thu, 14 Jan 2021 21:00:00 GMT

new year

It’s 2021! A new year, full of potential. Likely, your financial dreams have been coming to mind – or are sitting just beneath the surface. Maybe you’re looking to own your own home – or move home as you see how your needs will change this year. Perhaps you have been playing with the idea of investing in property, consolidating your debts to suit your lifestyle or saving for a family holiday.

It’s a new year, and we dream about the possibilities! However, without a plan, dreams remain, well – just that.

Our team is experienced in helping people just like you see their dreams in light of reality and turn your plan into an achievable goal. Buy that house. Build that extension. Change-up your circumstances so you can save for the future.

And may that future be amazing!

GOVERNMENT EXTENDS HOMEBUILDER GRANT BY 3 MONTHS

Fri, 18 Dec 2020 03:10:00 GMT

Good news for existing home owners and people planning to enter the market – the government has extended the HomeBuilder scheme.

HomeBuilder provides financial support to owner-occupiers who want to build a new home, substantially renovate an existing home or buy an off-the-plan property.

Under the original version of the scheme, participants in the HomeBuilder scheme receive a $25,000 grant if they sign a building contract before 31 December 2020.

Under the new version, participants will receive $15,000 if they sign a contract between 1 January and 31 March 2021.

As before, construction must start within six months of the contract being signed.

The price cap for renovations has been kept at $1.5 million (pre-renovation). However, the price cap for new builds, which is currently set at $750,000 for all states, will be increased to $850,000 for Victoria and $950,000 for New South Wales.

To participate in HomeBuilder, you must be an Australian citizen and earn less than $125,000 for singles and $200,000 for couples.

RECORD-LOW INTEREST RATES DRIVE A SURGE IN HOME LOAN ACTIVITY

Fri, 11 Dec 2020 00:24:00 GMT

There has been a massive increase in home loan borrowing over the past year, according to the latest data from the Australian Bureau of Statistics.

Australians took out $22.5 billion of mortgages in September – a 25.5% jump on the year before. That included increases of:

33.8% for owner-occupiers
4.2% for investors

There was also a massive increase in first home buyer activity among owner-occupiers.

First home buyers took out 13,569 loans in September. That was not only up 45.5% on the year before, but was also the highest figure in 11 years.

The surge in borrowing comes as no surprise – interest rates are at record-low levels. And with governments around Australia providing assistance for first home buyers, it’s no surprise to see so many younger buyers entering the market.

Are you looking at getting into the market sooner rather than later? Well now is time.

Get in touch with our team today on (03)8657 8664 and let’s get you on your way to a Pre-Approval now!

BE CAREFUL WITH ‘BUY-NOW-PAY-LATER’ THIS HOLIDAY SEASON

Thu, 26 Nov 2020 22:22:00 GMT

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.

Our advice would be to try and avoid using these accounts all together.

We always say ‘If you can’t afford to buy it in full, then you shouldn’t be buying it at all’.

Sources and Links:

https://asic.gov.au/about-asic/news-centre/find-a-media-release/2020-releases/20-280mr-asic-releases-latest-data-on-buy-now-pay-later-industry/

IS NOW THE TIME TO BUY?

Tue, 17 Nov 2020 22:41:00 GMT

Whilst we may still be in a pandemic, the question on whether now is the right time to buy is one that has been coming up frequently lately. It’s hard to make predictions, especially about the future, but it is even harder to predict where the market is going to be a month or a year from now!

However, there has been quite a large increase in the property market mood, with more buyers and sellers developing the confidence to work their way through the current conditions in which Australia is left with during the coronavirus pandemic.

Demand for houses is 32.9 per cent higher than a year ago and for units it has increased by 29.7 per cent.

Strategic investors are seeing a window of opportunity within the Australian property market and are putting themselves in a better position for their financial future. By speaking with their financial advisors and doing the appropriate research, they are already prepared to jump on these properties as they become available sooner rather than later.

Melbourne house prices are now on the move and up 0.3% over the last week.

So we ask the question again, “Is now the time to buy?”…

We truly believe, that NOW is the time to take action and get yourself on the right financial track, so that you can be prepared to take advantage of these opportunities as they start to arise within the property market!

What does that mean? It means getting in touch with our team to discuss your options today. We can tailor a personalised Action Plan & Scenario for you so that you know exactly what kind of position you are in.

From there, our team can get you house hunting ready with a Pre-Approval, a very valuable tool to have when it comes to putting in offers on properties, as you have all of your ducks in a row!

Want to get started today? Get in touch with our team at info@futurefinancegroup.com.au or call us on 03)8657 8664.

Sources and links:

https://propertyupdate.com.au/australian-property-market/?mailchimp=true

SHOPPING FROM THE COMFORT OF YOUR COUCH… COSTING YOU MORE THAN YOUR WAISTLINE!

Tue, 13 Oct 2020 22:41:00 GMT

For generations we have prepared our own food at home resulting in a more positive impact on our bodies. We were more likely to eat smaller portions, take in fewer kilojoules, less fat, salt and sugar tending to make us healthier in weight and better general health1.

So why are we not cooking as much anymore?…

WE ARE BUSY
TOO MUCH CONVENIENCE

Australians are increasingly using apps and online payment methods to shop.

Sadly, for many of us, we use mobile apps to spend money more than we use it to track and manage our money.

Here’s how we spend our money

Australians are spending an average $328 a month on food, movies and music delivered to their doors or downloaded on devices2.

This is purely based on what is delivered to our home without us even leaving the house.

A third of Australians living in capital cities order food through online delivery services such as Menulog, UberEats, Deliveroo and Foodora3.

Even our relaxing Friday night drinks at home is changing. The local ‘bottle-o’ is being replaced by delivery apps like Tipple and Jimmy Brings. We do not need to make a stop on the way home or head to the pub for our grog. With a click of a button, it can be delivered to us in under 30mins4.

So, if you order in… AND you are adding this to your buy-now-pay-later shopping through Afterpay, Zippay and the like, you could very well jeopardise financing your next loan if not used sensibly.

This is made even more dangerous if you are an impulse buyer prone to overspending. Why? Well…

The facts don’t lie. Users admit that…

30% have missed at least one Afterpay payment – penalties apply

65% said the ability to make smaller payments influenced them to make purchases they wouldn’t normally make5.

Therefore, with our modern busy lifestyles, we are creating a real disconnection with what we are actually spending – convenience spending is making us lazier and unhealthier consumers.

We all know people who live less than a five minute walk from restaurants, yet still order-in!

Why are we concerned?

Because of the sheer transparency of the way we spend our money – ‘Big Brother’ is watching our every move. Along with tighter lending criteria, lenders also have greater visibility over our spending. As your finance specialist we find ourselves spending more time and effort than before to help our clients develop strategies with their finances because many of us are totally disengaged with our actual financial status.

Have you noticed that your bank now groups your transactions into categories such as groceries, utilities, cash out, retail spending etc on your online statement and app?

Lenders use this information and now have the technology to review and evaluate the risks for your loan assessment.

There can be a variety of reasons a lender may reject a loan application

Perhaps you’ve renovated, are paying off holiday expenses on a credit card or have bought a new car. As your finance specialist, we can ensure you are ‘loan application ready’ by favourably drafting your situation to the lender that is most favourable for your circumstances. This is often missed by going directly to the bank yourself.

So… how else can WE help?

Our expertise will help you review your spending and budgeting habits to provide you with the best plan for improving your chances of approval before applying for your next loan.

An accurate assessment of your situation and home loan readiness will help you move forward with confidence.

Sources and links:

HOW ACCESSING YOUR SUPER EARLY, CAN EFFECT YOUR HOME LOAN APPLICATION…

Tue, 29 Sep 2020 07:30:00 GMT

As you may be aware, the Australian Government allowed Aussies’ early access to their Superannuation to help those financially impacted by the economic slowdown caused by COVID-19. The scheme allowed you to apply for one-off access in the 2019/20 financial year of up to $10,000 from your super.

The ongoing crisis then saw the scheme reimplement in the 2020/21 financial year, with a new application required to access a further $10,000. Meaning that even if you accessed your super in the previous financial year, your eligibility needed to be reassessed the following year.

This all sounds great, especially if you are experiencing financial difficulty due to COVID-19, to help aid in paying bills, rent, or get you out of debt. However, a recent study has shown that nearly half (40%) of those who accessed their super early, actually saw no drop in their income during the crisis. So the question is, how could this hurt your home loan application?

Well here is the problem.

While lenders have advised that those taking advantage of most of the COVID support schemes would not be penalised on future loan applications, the majority of them are not open to those who have accessed their superannuation early. The reason being, for you to be eligible to access your super early, you had to demonstrate that you had experienced financial difficulty as a result of COVID-19.

Unfortunately, you won’t be able to escape this admission when it comes time to apply for your new home loan. So if you accessed your super early ‘just in case’, it is almost impossible to argue that you can meet your future home loan repayments, when there are records that you took this money out of your super due to financial distress.

So, if you are looking at purchasing a new property & applying for new lending, we highly recommend avoiding withdrawing any of your superannuation if you can. This is going to increase your serviceability with the lender & make your home loan application much easier.

It is important that you get in touch with our team, so that we can discuss your options and help you. We can also help you by putting a budget & bank account structure tailored to your needs, to assist you in staying on top of your expenses during this difficult time.

Sources and links:

INTEREST FREE DOESN’T MEAN COST FREE…

Thu, 27 Aug 2020 23:13:00 GMT

TEMPTED TO BUY THAT NEW LOUNGE, HOME THEATRE SYSTEM OR TELEVISION BUT DON’T HAVE ENOUGH MONEY TO PAY FOR IT RIGHT NOW?

Before you sign on the dotted line for in-store interest free finance, think carefully and read the fine print. More importantly, do your research! Well… we have done this for you!

Many retail stores offer interest free payment terms, especially during the end of financial year sales. But beware! These ‘interest free’ deals that allow you to take your goods home and pay them off over time aren’t always cost free!

Choices, choices, choices

Not only can you get ‘interest free’ store purchases, there are ‘interest free’ credit cards and ‘interest free’ loans – well ‘interest free’ within a certain timeframe that is.

They all have their own features, benefits and pitfalls.

Usually with in-store interest free deals, you are provided with a store card or credit card with a credit limit to cover the cost of your new purchases. These deals typically have a higher limit than the goods you are purchasing.

It is not uncommon for stores to offer various interest free deals as they really want your business. Their range of options attracts different clientele. We have seen the mega chain store giant, Harvey Norman, offering seven different interest free options at one time!

And of course there are the buy-now-pay-later options with Afterpay, Zip Pay and the like (that’s a whole other topic) that have very similar features.

However these options also require thorough consideration before taking action.

Did you say 29% interest rate?!

Retailers have different offerings and their payment terms will vary, so it is important you read all the conditions for each loan option as they will differ.

For example, the interest rate you will be charged if you haven’t repaid the balance by the end of the interest free period can be as high as 29%. That is even higher than most credit cards!

Make sure you calculate your regular payments to ensure the balance is paid off before the end of the interest free period. It is wise to set up automatic direct debits so you don’t miss any payments.

This case study by ASIC’s MoneySmart shows you why.

Case study: Ron and Maya compare interest free deals

A young couple, (Ron and Maya) discussing interest free deals, both got interest free deals but for different amounts.

The interest free deal worked out well for Ron as he increased his repayments to pay off the deal in time.

But Maya just left her repayments at the minimum amount and ended up being charged 29% interest and still owed a lot at the end of the interest free period.

Source: ASIC MoneySmart, Interest free deals

If your interest free deal comes with a credit card – BEWARE! Additional purchases won’t necessarily be on the interest free terms and you could end up paying high interest rates on those additional products immediately. Plus, there is always the temptation to buy ‘something else’ with the remaining credit available. Nothing to pay! No deposit! No interest?

Sounds too good to be true? Well it usually is. These catchy headlines may draw you in-store or online but there are fees associated with your shopping that may include application, processing or account keeping fees.

Interest free finance arrangements can be a great way to reward yourself with some of the finer things in life – or even practical purchases like appliances when you are home making. But these arrangements are only beneficial for those who are regular on-time payers. Otherwise you may find yourself just like Maya and stressed with more debt – and of course we don’t want that!

Remember: every credit application, loan, credit card AND interest free deal you have will go on your credit report and can affect your future borrowing power. Many Australians take out interest free finance without realising it is actually a loan and the penalties in the end can be high.

We leave you with two key thoughts on interest free shopping:

You have to be able to afford the repayments and ideally pay the item off before the interest free period expires. You don’t want to put extra pressure on your cash flow.
If you only pay the minimum monthly repayment you won’t have your purchase paid off by the end of the interest free term and you will be slugged with high interest and more fees.

If you are one of the 1.6 million Australians who already have 3 or more credit cards1, perhaps another interest free deal isn’t for you! Saving or the good old fashioned lay-by may be the answer.

Before you are tempted into interest free shopping, please call us, even for those new small debts. We can help you make the right decision to reward yourself now and in the future.

Source and links:

1. Finder, 1.6 million Australian’s have 3+ credit cards

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2019

EVERYONE IS AN EXPERT… BE CAREFUL WHO YOU LISTEN TO

Mon, 03 Aug 2020 00:53:00 GMT

Have you ever been given advice from your family, uncle John or friends about what is the best loan and where the best properties are? Why you should invest in property and why you shouldn’t? It should be negatively geared, it should be positively geared… and so on.

Even people who have never invested in property feel they have the right to tell you why it is good or bad based on their own perspectives (and mostly without evidence or experience).

People’s opinions are so subjective. So you really do need to take care of who you listen to in this world of information overload and ‘online experts’.

Did you know that we (collectively across the globe) conduct about 40k of searches per SECOND on Google? Yes, you read correctly – per SECOND, not minute, and this is just on Google2.

With such astonishing figures, have you ever wondered how creditable the data is that we search for every day? Furthermore, most of the data has only been generated in the last few years2.

Although money does not mean everything to everyone, it certainly affects your life if you obtain incorrect information and advice.

With so much information out there and with such ease of accessibility, please don’t listen to ‘experts’ who don’t have runs on the ground.

YOUR MONEY is at stake here not THEIRS and you need to do your own research.

In regards to finance… The good news is – the finance industry in Australia is now highly regulated. As your finance specialist, we are not only accredited but are obligated to remain informed and responsive to the constant industry changes, regulations and the vast array of products we offer through different lenders to main-tain our various accreditations each year.

Q. How do I find a creditable mortgage broker?

Generally, look for people or organisations who:

are qualified, accredited or licensed in their field
have credible experience and sources
are approved members of relevant professional industry associations
provide you with quality professional industry information and commentary
have genuine and positive client testimonials
are most interested in YOUR situation and goals

Q. WHEN IS THE BEST TIME TO ENGAGE A BROKER?

Simply put, because we act in your best interest at all times, anytime is the best time. Ideally you should contact us before you make any decisions or changes to your finances.

As your finance expert , we discuss your goals, then explore the range of financial possibilities that are not unsuitable for your financial situation. We then document and submit your application to the lender we choose together to provide you with the best possible outcome for loan approval.

Q. Can’t I simply choose the lowest interest rate?

NO, please don’t!

It is not always just about finding the lowest interest rate!

There are many considerations for obtaining finance: fees, types of loan, features of the loan facility, lenders’ mortgage insurance, length of your loan, the structure of the loan and your accounts. The list goes on.

Typically after completing the finance exploration session with our clients, although extremely important, we find that

the lowest interest rate IS NOT always your most vital consideration when securing finance.

Due to the complexity of our product range and an enormous variety of options, it is always wise to use our in-depth knowledge and expertise to your advantage because we work for YOU not the lenders.

PLUS we save you an incredible amount of time by doing all the research for you. Why would you consider trying to find your own finance solution?

In regards to helping you with investing in property… there are also many ‘experts’ out there as well. So make sure you call us first to head you in the right direction.

Sources and links:

Disclaimer : This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2019

AUCTIONS… STRATEGY OR SCIENCE?

Wed, 22 Jul 2020 02:27:00 GMT

Almost everyone has an opinion on auctions. Love them or loathe them, auctions have been around for years and they are here to stay.

As of June this year, 61.5% of homes are sold at auctions1. And with housing affordability reported to be the best it has been since 20162, this number may very well rise.

Auction strategies

If you have ever been involved in an auction campaign you would no doubt have had a planned strategy. Whether you stuck to it in the (sometimes) frenzy of the auction is another thing.

When attending an auction would you:

be the first bidder and open with a strong first bid?
stay silent then come in with a killer bid right at the end?
make a quick counter bid as soon as someone bids against you? or
recruit a professional to bid for you?

According to auction streaming service Gavl, the most common knockout bid is a $10,0003 increase. Some auctioneers suggest that avoiding round numbers can work well for buyers and changes the pace of the bidding.

For example if you open the bidding at say $595,000 instead of $600,000, the bidding will likely continue in smaller increments of $5,000 instead of $10,000.

Perhaps the biggest (and subconscious) psychological barrier to success during auctions is our body language.

Real estate site Domain suggests that projecting assertive body language and knowing your limits are critical. Bidding confidently, loud and proud, can impact the final result. Understanding how other bidders behave at an auction can help reveal when a buyer is reaching their limit.

But enough about strategies, back to the science

We opened this article with the theory of supply and demand. How does this work in the case of auctions?

New research from the University of Sydney and the University of Technology Sydney shows that people participate (bid) LESS at auctions that have MORE bidders4 .

Findings from this research are consistent with the ‘loss aversion’ theory – people tend to prefer avoiding losses as opposed to acquiring equivalent gains. We are more upset about losing $10 than we are happy in finding $10.

So the theory suggests when there is more supply (bidders) = we tend to bid less.

Contrary to our belief of ‘bigger crowds and more bidders at an auction create more money for the vendor’, that isn’t always the case!

Regardless of the strategy you adopt (or if science takes over), it is important to take these steps BEFORE you attend an auction.

First and foremost, secure finance pre-approval so you know your true borrowing power.
Do your research – inspect as many comparable properties as possible to know the market.
Attend other auctions to understand how they work and experience different auctioneer styles.
Inspect the property thoroughly, take measurements if you need to and invest in a building inspection – you don’t want any nasty surprises after the gavel strikes and you have to sign the papers!

As your finance specialist we work with our clients to ensure you have your finance pre-approved prior to auction AND prior to making an offer for a private sale.

Remember, due to the range of lenders we have available and the maze of interest rates between them all, we have extensive knowledge across a variety of lenders to help you find the right finance to suit your situation.

Contact our office today if you have any questions regarding finance and pre-approvals for auctions or private sales.

Sources and links:

CoreLogic, 61.5 per cent of homes sell as auction volumes fall week on week, June 2019
ANZ-CoreLogic Housing Affordability report June 2019
Domain, Experts reveal the best techniques for bidding at auction, February 2018
University of Sydney, Auction bids decline with intensity of competition, April 2019

PROPERTY DEVELOPMENT… THE RISE OF SUB-DIVISION.

Mon, 29 Jun 2020 06:02:00 GMT

With high price tags on many Australian properties, more and more people are cashing in on real estate assets and turning to subdivision.

Faced with perhaps an ageing home on a decent parcel of land or a growing family to accommodate, the decision is whether to sell up and move, knock down and rebuild or knock down and subdivide to create a duplex.

For duplexes on separate titles, the owner may sell both for a profit or sell just one duplex and remain living in the other.

Are you renovating, profit-making or running a ‘flipping’ business?

While some homeowners wish to simply upgrade or rebuild their home at their existing address, others turn property development into an income generator.

The Australian Taxation Office1 has clear guidelines for those dealing in property.

For instance, you are required to register for GST if:

turnover from your property transactions (and other transactions) is more than the $75,000 GST registration threshold, and
your activities are regarded as carrying on an enterprise.

You will need an ABN if you are required to register for GST.

Generally, if you only receive residential rent, you won’t be required to register for GST2.

Did you know? A one-off transaction can still be considered to be an enterprise.

Your activities may be regarded as an enterprise if, for example, you buy vacant land to subdivide with the intention to sell for profit or you develop new residential premises and sell them.

You are not carrying on an enterprise if your property transactions are for private purposes, such as constructing or selling your family home.

There are also capital gains tax implications for land subdivision.

The Australian Taxation Office has information online to help guide you through the rules and regulations. It’s important to seek advice from the ATO and/or your accountant.

Developing a block of land may seem like a great way to build wealth but the reality is there are many processes, regulations and finance arrangements to work through.

For instance, the number of units or townhouses to be built on a block of land affects the type of finance you may be able to obtain. This is particularly so if your intention is to subdivide and/or build more than two properties.

So while some keen Australians are supplementing their day jobs with renovating (or rebuilding) for profit to build wealth, it is not without its risks.

As with all real estate decisions, location is a key factor. As is land size, street position, shape of the plot, local council development controls, amount of capital required and quality of the builder.

For first time aspiring developers, hiring professional project managers makes good sense to reduce first time developers’ costly mistakes.

For other developers with a number of projects under their belts, adhering to the numerous council, zoning, tax and record keeping rules and requirements, good industry connections and a strong auction or sales campaign will determine the success of their projects. Finance to suit your development strategy.

We have access to many lenders and products outside the big 4 who specialise in construction and development lending.

Sources and links

Australian Taxation Office, Small business Newsroom, Do you deal in property?
Australian Taxation Office, Property and registering for GST

IS SWITCHING HOME LOANS A SUITABLE ALTERNATIVE FOR ME?

Tue, 26 May 2020 06:54:00 GMT

Your home loan is usually your largest financial commitment. We understand that changes in interest rates can have a big impact on your monthly repayments and how long it takes you to repay your loan.

Switching loans might cost you thousands in early exit fees and other required fees, but it could possibly SAVE you thousands of dollars as well.

• But how will you know?

• How will you compare each new lender’s offering against others?

• What new conditions will accompany a new loan?

When you contact us we will compare your existing loan with other lenders’ products.

Our goal for you is to determine ‘Is the cost of switching loans worth the potential interest rate saving?’

We will use the following steps:

1. We shop around for you

We use our financial calculators to compare interest rates, fees and features of your current loan and several other home loans available in the market. We might also be able to negotiate (on your behalf) a discount below the listed interest rate, especially if you have a large loan. We will talk to your current lender and tell them you are thinking of switching to a cheaper loan offered by another lender. They may offer to reduce the interest rate or suggest a cheaper ‘no frills’ loan. This could save you significant switching costs. Often, by using us, your mortgage specialist, we can secure a better rate than if you try to negotiate this yourself.

2. WE RESEARCH THE POTENTIAL SAVINGS FROM SWITCHING

Our role is to calculate the fees you will be charged if you change loans, plus other expenses you may need to pay, eg lenders’ mortgage insurance (LMI). We will show you how long it will be before you start making savings after the cost of switching. We can also compare the minimum repayments of potential new loans.

3. WE COMPARE HOME LOAN FEATURES AGAINST YOUR EXISTING LOAN

We determine a range of potential loans that may be suitable for your circumstances and check them against your existing loan.

We will compare features such as:

• the ability to make extra repayments

• having an offset account

• having a redraw facility

You may pay more for a loan with extra features and flexibility so we will need to determine if these features will be important to you and worth the extra expense.

4. You decide, then we help you take action

We will present to you the potential cost savings and differences in features between loans.

Please note:

You will only reap the potential savings if the new loan stays cheaper over the long term. The longer it takes for a switch to save you money, the greater the chance that the interest rate savings may fade.

Your savings can be used to pay off your new mortgage more quickly or make lower monthly repayments to alleviate some of your current financial burdens.

If you decide you would be better off switching loans, then let’s take action together! Give our office a call on 03)8657 8664 today!

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2020

SWITCHING BANKS WILL SOON BE EASIER

Thu, 30 Apr 2020 08:00:00 GMT

Have you heard of open banking?

Many people haven’t (maybe because at first it seems like a dull topic) but it could potentially save you THOUSANDS of dollars in the future.

Now we have your interest, let us open explain!

What is open banking?

Open banking will give Australian consumers more control over their financial data – how and who their data is shared with.

In 2019, the Consumer Data Right (CDR) legislation was passed that will allow consumers to securely share their selected banking data with third parties.

Although the original plan was to begin roll out this month (February 2020), the four major banks’ obligations to share consumer account and transaction data has changed to:

1 July 2020 for credit and debit cards, deposit accounts and transaction account
1 November 2020 for mortgage and personal loan accounts¹.

This sharing of data is also expected to roll out to other sectors such as energy and telecommunications in the future.

So the topic may still seem a little dull to you, even slightly alarming with potential privacy concerns, BUT this could favour consumers.

Here is how:

Big brother working in your favour

We have preached to you before about how much data the banks hold on us. A LOT!

With a tap of a debit or credit card, the banks can see how much we spend on literally everything (well everything but cash purchases).

Use it to your advantage

The move to this open-data environment will make switching banks a lot more hassle free.

Changing financiers can be a little more work when you have to “sell yourself” to a new bank by providing income and expenses, credit score, information about other loans etc.

With open banking, you will authorise an accredited entity to access data from your current bank. So for those of you with “good credit” and money management, this will be a win for you!

Easier access = better deals

Allowing third parties to access your data should see rival providers offer more competitive deals, better service and tailored products to suit your needs, especially if you pay your bills on time and are living within your means.

So back to the data security concerns.

Not all consumers will be accepting of open banking’s digital exchange of data. In fact, in a recent Deloitte Survey Open Banking: Switch or Stick? , 69% of respondents said trust was essential when deciding whether to provide personal information.

Good news is, unless you give explicit consent, your current bank will not share your data with other parties.

While the roll out of this legislation has been delayed to the second half of this year, we can take comfort in the fact that more time will be taken to get this right. After all, Australia’s financial data will be flying around in cyberspace in larger volumes.

Before you decide to refinance or grab a new loan this year, talk to us first.

We keep ourselves updated on the latest bank and non-bank products, mortgages, features, legislation and the application process.

We can help you secure your next mortgage or loan with confidence, at the right time, to suit your needs.

Read our article on the four steps we take to help you decide if switching loans is right for you.

Sources and links:

1 Deloitte: Changes to the start date for open banking, 20 Dec 2019

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2020

DO YOU KNOW A POTENTIAL FIRST HOME BUYER?

Tue, 07 Apr 2020 01:25:00 GMT

First Home Buyers are out and buying!

Reserve Bank Governor Philip Lowe says Australia is at a turning point, with cash set to become “a niche payment instrument”.

If you have been watching the signs for open homes going up in the last few weeks in your area, then you would also be noticing a bit of activity happening in the lower end of the property market.

Since the First Home Loan Deposit Scheme (FHLDS) commenced on 1 January 2020, the property market has been a buzz of activity in most capital cities and rural areas for properties under the First Home Loan Deposit Scheme price cap1.

With a tiny 5% deposit, no lenders’ mortgage insurance (LMI) and first home buyer stamp duty savings, it has attracted many new consumers into the market who thought they would never be able to acquire their own home.

Minister for Housing Michael Sukkar stated that the First Home Loan Deposit Scheme is already working to help Australians get into the property market sooner, stating that saving for a 20% home loan deposit is “one of the biggest barriers for first home buyers”.

“The scheme is cutting years off the time it takes to secure a deposit, allowing Australians to realise their dreams of owning a home sooner,”

Minister Sukkar

According to the intentions of applicants, the most popular cities2 have been:

1. Sydney (19.4%)

2. Melbourne (16%)

3. Brisbane (9.8%)

The remaining proportion of loans is for houses outside of these three cities.

At week seven, apparently of the 10,000 applications available, 865 Australians secured a loan with 109 already having settled. 5,639 applications are lodged for the scheme and out looking for their first home while waiting to learn their borrowing capacity.

Surprises?

55% of applicants to date are aged below 30, with 34% of them aged between 25 and 29.
20% are aged between 40 and 50 years and the oldest profile has been 53 years.
The average income of applicants has been $67,090 for singles and $111,373 for couples. Well below the income cap.

Stop the stereotype…

To get into their first home, more than half of the millennials surveyed3 said they’d sacrifice:

little luxuries (57.7%),
experiences (56%) and
big-ticket items (55.3%) to get on the property ladder, with over 20% communicating they were even willing to give up basic necessities.

As you can see, first home buyers can be of any age, so if you are one or know one we encourage you to call us to help you achieve the GREAT AUSTRALIAN DREAM of owning your own home.

And if you don’t have a deposit and think mum and dad can help out – there is a solution for you too!

All you need to do is call us for a quick chat and we can let you know if we can help you or not.

Sources and links:

For details on the price cap visit: https://www.nhfic.gov.au/
The Adviser News
Bankwest recent research

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2020

SHOULD YOU BUY OR SELL FIRST? THE MOVING HOME DILEMMA…

Thu, 12 Mar 2020 06:30:00 GMT

There are many considerations to contemplate when it comes time to upgrade or downgrade to a new home. While usually exciting, it can be very stressful at the same time.
With our current busy lifestyle, there is already so much to do without the added pressure of dealing with several real estate agents and coordinating a move.
Your buying/selling strategy will largely be influenced by your financial (and sometimes personal) situation, the housing market and interest rates.

Regardless:

you’ll want the best possible price for your current home, and
a great deal on your new one.

The gap in between buying and selling can make a huge difference depending on the property cycle, type of property you are considering swapping to, the state (regional or metropolitan) and the current market conditions in the suburbs you are selling in and
buying into.

SHOULD YOU BUY FIRST?

In a strong market, buying first feels less of a risk as properties are likely to sell well and sell quickly. You will want to buy quickly before the market rises too fast and the price gap between your new and old property becomes too great.
In a declining market, the race is on to achieve the best price possible for your home while there are still buyers in the market and before there is little or no interest left in your property. Then there is timing your purchase and settlement where you do not over pay before the market has bottomed out.

For those who are prepared to buy first, you will need to:

• take a risk that your existing property will sell within your desired time frame and at the price you need for the next one,
• have a strong financial standing to cater for an extended misalignment in settlement dates,
• consider holding the current property and renting it out in the event you can’t sell or want to wait for a better time to sell
• be prepared to take on bridging or other finance options should you need it to cover the cost of the new purchase until such time as the existing property is sold.

Be careful

There are many considerations when using bridging and other finance options:

How will you accurately predict how much your existing property will sell for?
Do you have an additional 20% deposit or enough equity and serviceability to cover the gap time (bridging loans aren’t covered by lenders’ mortgage insurance (LMI))?
If you don’t already own your home, you will be paying interest on both properties and the longer the sale takes, the more interest you will pay. Sometimes it doesn’t pay to hold out for a better sale price as the holding costs may outweigh the additional sale price.
You will have additional advertising and property holding costs like council and water rates.

There are a few options for financing properties in between the sale and settlement match up dates.

Don’t worry, we can step you through the details!

Ask us for our topic sheet on these What is bridging finance and what are other alternate
finance options when you are caught in between buying and selling?

SHOULD YOU SELL FIRST?

In a downturn or softer market, it can take longer for a property to sell. On the upside it is also less expensive to buy.

‘Where there are pros, there are most certainly cons!’

Selling first reduces your risk and gives you certainty of exactly how much you can spend on your next home. But of course time is not on your side.

Ideally you will want to align your settlement date of your existing property with the settlement date of your new property so you can move in on the day you move out. But that’s an ideal world! It does and can happen with good agents and finance options
available to you.

Mounting pressure to buy within that settlement period may lead you to make hasty decisions and perhaps not purchase your next home of choice.

If you are considering selling first, there are a few options to think about if you’re left without a new home.

Renting. Really?

Renting after the sale of your property can give you time to make thorough, considered buying decisions.
If you are moving to a new area this could be a great advantage allowing you to try before you buy. (But keep those packing boxes handy – you’ll be moving twice!)

Move in with family

Not everyone has or wants to consider this option.

And we get that!

However, if it is an option for you, while you are house hunting there will be potential savings typically enjoyed in a shared living environment (like mum cooking and doing your washing for you…), and of course NO RENT.
But can you all still live together?! Can you put a cost on that?

Request an extended settlement

When purchasing a home, the settlement process is the last hurdle before you can finally own your dream home and take possession of the property.

Buyers and sellers often negotiate property settlement dates. The people selling their home may also need time to look for another one.

A mutually agreed extended settlement period can give you both additional time to buy the right home. You may be lucky enough to coincide it with the settlement on your new purchase – and only move once!
Remember though – once a contract is signed, the settlement date is fixed – you are committed. The vendors are not required to change the agreed settlement date and there can be severe delayed settlement costs if you cannot settle on time.

In regards to auctions, as the successful bidder, you agree to settle on the date indicated in the contract, so make sure the settlement date in the contract works for you or ask for it to be changed before auction day!

Getting it right

As mentioned, when it comes to changing homes, timing is everything. Juggling both selling and buying at the same time is challenging but possible with the right team by your side.

Obtaining specialist advice is key.

From us, your finance specialist, your local real estate agents or advocates, solicitors or conveyancers. We have contacts across these industries to help you make the right decisions.

Please reach out to see how we can help with your new home transition and give us a call on (03)8657 8664.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2020

5 SAVINGS TIPS YOU PROBABLY HAVEN’T TRIED YET

Sun, 01 Mar 2020 23:19:00 GMT

When it comes to saving, sometimes it pays to think small. Little changes can make a big difference.

Here are our five savings ideas to help you achieve your goal faster.

1. PRICE PROTECTION CREDIT CARD

Don’t you hate that -> when you shop around diligently to get the best price on your first new fridge in years, only to find it $100 cheaper at another store a week later? If your credit card has price protection, they’ll pay you the difference on selected items. There are plenty of conditions such as time limits and it’s not applicable to online purchases – but it could save you hundreds of dollars.

2. AUTOMATIC PAYMENTS

Nothing is more annoying than a late fee. And it can happen to the best of us. Setting up automatic payments can be useful for recurring bills ensuring you not only escape late fees, but can also take advantage of early payment incentives which can save up to 10% of the bill in some cases.

3. SUBSCRIPTION OVERHAUL

Once you have set up all those automatic payments, keep an eye on them. Regularly check your subscriptions, automated bills and automatic charity donations to see if there is anything you no longer need. Particularly with smaller amounts, it is easy to overlook or just let it go month after month. Are you still using that gym membership coming out of your bank account each month?

4. CASH BACK CREDIT CARD

In the same way, you can accumulate points through rewards programs such as Fly Buys. Some credit cards offer a cash back rewards program with money going back into your credit card.

Programs differ in how, when and for how long they are offered. As always, paying the full balance of your credit card on time is important and no rewards program warrants overspending. But if used wisely, cash back can give you just that.

5. YES, THE COFFEE ONE

We know you know that giving up one or two store bought coffees each week can save us hundreds of dollars a year, but it’s worth repeating. And it doesn’t have to be coffee. Look at all your smaller, discretionary spends to find something you can give up in order to save. Just remember to keep a few treats in there.

Successful saving isn’t about squirreling away every cent you earn. It’s about mindful choices and ensuring you are taking advantage of every offer available to you to maximise your bottom line.

1. PRICE PROTECTION CREDIT CARD

2. AUTOMATIC PAYMENTS

3. SUBSCRIPTION OVERHAUL

4. CASH BACK CREDIT CARD

In the same way, you can accumulate points through rewards programs such as Fly Buys. Some credit cards offer a cash back rewards program with money going back into your credit card.

5. YES, THE COFFEE ONE

Successful saving isn’t about squirreling away every cent you earn. It’s about mindful choices and ensuring you are taking advantage of every offer available to you to maximise your bottom line.

LEAVE IT OR LIST IT?

Sun, 23 Feb 2020 23:54:00 GMT

First homes, like first loves, are important milestones in our lives representing more than just bricks and mortar. And like our first loves, most of us eventually move on from our first home. Needs change, families grow and we find ourselves looking for a new property.

This is often a time that property owners turn their thoughts to investing, looking to own an investment property as well as a home to live in. The simple solution would seem to be to hang on to your first home and keep it as an investment property, right?

Wrong!

In most cases, keeping your first home as an investment property isn’t advisable, especially if there is substantial equity in the home.

There are, of course, exceptions to the rules. As your personal financial specialist we can look at your unique situation and help you make the most financially sound decision for you.

A few points to consider…

CAPITAL GAINS TAX AND THE SIX YEAR RULE

When you sell a home that has been used only as a principal place of residence, it does not attract capital gains tax (CGT). Conversely, a home that has been rented out will attract CGT. However, under the six-year rule, a property can continue to be exempt from CGT if it is sold within six years of firstly being rented out AND you

DO NOT own another principal place of residence. We can recommend specialists who are best placed to advise you on CGT implications and obligations.

Capital growth potential

Understand the future value of your first home before making any decisions. Look into comparable sales in your area, and research planned developments and infrastructures that may impact its future value.

Again, advice from our financial and real estate experts will help you weigh up potential capital growth against potential capital gains tax and other considerations.

Rentability

Our first home is often purchased using a criteria that is different from the one we would apply to an investment property.

When moving on from that home, consider if it will be easy to rent long term.

Just because you have loved the home, it doesn’t mean renters will. Speak to local property managers and investigate supply and demand in your area.

It is worth remembering that rent is considered as income, and if your rent is more than the loan and property costs, you will pay the marginal tax rate on the income plus your PAYG income.

Renovations

Whether renovations (improvements) are required to bring the home up to a rentable standard is an important factor to consider, and one that may tip the scales on your decision. Landlords are required to ensure the property complies with safety standards and meets the requirements of a rental property. These standards and requirements may have changed since your home was purchased and could represent a significant financial outlay.

It is worth keeping in mind that only certain improvements will be deductible in line with a depreciation schedule.

Also note – If renovations or improvements are completed before the property is rented, the costs will not be tax deductible, as they will be considered as home improvements before renting. If the renovations are done after it’s rented, then the renovations are considered improvements on the property and may be tax deductible, but only for the time it is being rented. Your accountant is best placed to advise you here.

Home loan considerations

The decision of whether you keep or sell your first home is largely dependent on your ability to service the mortgages required. How much you are able to borrow (for one or both properties) will be dependent on:

how much equity you have in your first home
the total amount you need to borrow, and
your ability to service both loans.

Lenders have different criteria with investment finance and will generally only consider 70-80% of the rental income.

Using your equity to buy

The greater the equity in your current home, the more you can borrow to buy another home. In addition, when buying your second home, it is possible to use the available equity in your current property as your deposit.

Depending on the increase in value since you purchased your home, you may have more equity than you imagined. This can be used instead of a cash deposit when buying your second home. However, if you use the equity from your existing home, it will need to be identified separately because the original loan will now be considered as investment, most likely be financed as an interest only loan and will be tax deductible.

INCREASING YOUR BOTTOM LINE WITH INVESTMENT PROPERTY

Tue, 28 Jan 2020 03:52:00 GMT

Claiming everything you’re entitled to from the ATO is one proven method of increasing your bottom line with investment property.

Investment property expenses you can NOW claim

Understanding the ATO’s latest rules on what you can claim on your rental property can significantly increase your returns.

The ATO allows you to claim an immediate deduction (against your current year’s income) for the costs associated with:

maintaining
repairing
managing and
improving your property, as well as
mortgage interest and some legal costs

Maintain, repair or improve – but DON’T blur the lines

MAINTENANCE

The ATO defines maintenance as: “work to prevent

deterioration or fix existing deterioration”.

painting
cleaning
gardening
lawn mowing and
pest control

are all considered maintenance.

Something like regular servicing of the hot water system or air conditioning unit is considered maintenance as well.

REPAIRS

The ATO defines repairs as: “work to make good or remedy defects in, damage to, or deterioration of the property”.

So, for example, if the hot water system breaks and you pay to have it fixed – that’s a repair.

IMPROVEMENTS

The ATO defines improvements as anything that will increase the value or life of the property or anything that goes beyond the definition of repairing.

Replacing the old hot water system with a new solar system (even if the old system was no longer working) – that is considered an improvement.

THE ATO EYES ARE WATCHING YOU…

The distinction is important (and the ATO keeps a keen eye out for improvements incorrectly claimed as repairs).

Maintenance and repairs are eligible for an immediate deduction. Improvements are NOT.

You also cannot claim a deduction for the cost of improvements in the year you incur them.

Capital improvements (such as renovating a bathroom or kitchen) must be claimed as capital works deductions over several years.

Property management AND maintenance of your records

Property management is generally an area where you will have substantial expenses, regardless of the age or condition of the property.

The ATO says expenses including:

advertising for tenants
body corporate fees and charges
council rates
water charges
land tax
property agent’s fees and commission, as well as
insurance costs (building, contents, public liability)

may all be eligible for an immediate deduction in the year it is incurred.

It is important for you to keep accurate records to make sure you are claiming everything you’re eligible for to support your claims.

Interest just got interesting

It is common knowledge that you are able to claim against the interest paid on your investment loan, however it is important to remember the property must be rented out or genuinely available for rent in the income year you are claiming a deduction.

You may not be aware however that you can also claim the interest on a loan used to:

purchase a depreciating asset for the rental property (like a new hot water system)
a loan used to pay for repairs to the rental property (like fixing the hole in the wall the tradies made while removing your old hot water system), or
a loan used to fund renovations.

Legal expenses – we object!

Legal fees always sting a little, so it’s good to know the ATO will allow some of them to be claimed as deductions.

For example, if you have to pay legal fees to:

evict a non-paying tenant, or
take court action for loss of rental income, or
defend a damages claim related to your rental property

you can claim them as an immediate deduction.

It’s all about YOUR opportunities

If you are not positioning yourself to take advantage of all the tax deductions available to you, then you are wasting these opportunities to have more money in YOUR pocket. Understanding what you can claim, and then making a claim, is one of many proactive steps you can take to improve your financial position and gain a greater return on your investment(s).

Did you know – you can claim your tax deductions back in your pay each week?

If you are struggling to finance your investment property week to week and cannot wait until the end of tax time, then you may request a PAYG withholding variation with your pay officer. This essentially means that the amount of tax you pay (according to your projected investment property deductions) can be withheld from the ATO each pay cycle and remains in your hands until it is reconciled in your tax return at the end of the financial year.

HOWEVER – it will mean you are unlikely to get a big fat tax return each year. So chat with us to see what options will suit you and your cash flow best.

Need help?

If you would like guidance on utilising rental tax deductions available to you in an ever-changing financial and taxation landscape, contact our office today for assistance.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. ©2019

DEBT CONSOLIDATION AND IT’S BENEFITS

Fri, 01 Mar 2019 07:10:00 GMT

Debt consolidation and its benefits

Generally your home can provide the opportunity to secure the most cost effective debt available in the form of a home loan. As your home is used as recourse against the loan, it provides the lender with additional security allowing them to lend money to you with greater certainty and at a lower interest rate. Credit cards and other store loans are provided without security and therefore charge much higher rates of interest as lenders are unable to immediately gain access to your assets to seek repayments in the event of a default.

Usually, you will be financially better off utilising your home loan given the potential interest savings. However, this is not for everyone.

It is important to remember though that good budgeting, spending within your means and controlling your discretionary spending are the keys to getting ahead financially rather than continually spending borrowed money. A good savings and investment plan, and debt reduction strategy are important tools in securing your financial independence.

How it works

To ensure you are minimising the interest payable on a soon-to-expire interest free loan or credit card balance that is unlikely to be paid off in the foreseeable future, you may like to consider debt consolidation as part of your debt reduction strategy. This involves taking multiple debts and consolidating them into one loan with a much lower average interest rate. A home loan usually has the lowest interest rate.

Example:

Consolidating your debts into your existing home loan at an interest rate of 4.2% could achieve a number of objectives!

Big tips for consolidating

Reducing your monthly repayments

In this example, in the event that you are unable to meet your monthly repayments, consolidating your debt will allow you to reduce your monthly repayments to $2,068.54 and allows you to regain control of your finances.

Reducing your interest paid

Ideally you should maintain your current monthly payments and aim to reduce your debt quicker to take advantage of a lower average interest rate enabling you to pay off your debt in 15.8 years and save $166,591.93 in interest.

Other strategies

If cash flow is important, there are other strategies you can explore such as consolidating your debt and splitting it into two loans to reduce your minimum repayment.

For example, split the loan into the original home loan of $380,000 and the second consolidated loan of $43,000. Then set the second loan term to five years and the minimum monthly repayment would be $795.80 and a monthly cash saving of $402.76, or $4,833.12 a year.

Alternatively, if your objective is to pay off your consolidated debt quickly but within the current monthly payment of $3,056.83, set your loan term to four years. If you pay 50% of the scheduled monthly repayment each fortnight, or even 25% of the scheduled monthly repayment weekly, a 30 year loan would generally be reduced by six years. Be careful though as a lot of lenders treat fortnightly repayments as scheduled monthly repayment x 12 then divided by 26 – still leaving you with a 30 year loan.

FIRST HOME BUYERS ARE IN THE LEAD!

Fri, 22 Feb 2019 07:05:00 GMT

You couldn’t miss the recent press coverage on the cooling Australian housing market. According to leading property experts, first home buyers are the cheeriest of them all1. We are seeing the highest level of first home buyers (FHBs) since 20102. It seems some FHBs are now feeling more confident to spring into property ownership, but some may still be cautious.

Typical questions people ask themselves when taking their first plunge into property investing are:

Can I have my lifestyle AND buy a property?
Can I afford to buy or invest?
Can I live in my investment property?

Well… this all depends on which state you are in and the state’s criteria.

What grants or concessions am I eligible for?

FHB grants and concessions eligibility differ in each state, so do your research!

Outside of those very relevant questions, there are other factors that influence WHEN buyers are ready to move in.

Property prices – we have seen higher property prices in many capital cities over the last decade
Tougher lending environment – there is increased scrutiny on bad debt, credit history and credit scores – think late payments on mobile and internet bills and HECS fees repayments
Australian wages – are not keeping pace with the cost of living
FHBs are getting older – as at December 2017, the typical first home buyer was 31, up from 27 in the early 1990s3. The older you are, the more questions lenders will ask – How long will you have to pay down the loan? How good is your credit history? The older you are, the longer you have had accessing credit. If you are an older FHB, you have had the time to build up your credit history through credit card use, personal loans and even mobile bills.

If you are a younger FHB, you need to create and build up your credit history.

Call us to talk about how you can build a good credit history because you need to show you can make repayments before lenders will consider giving you a loan.

So, with all of this negativity and tougher lending conditions, why would anyone consider buying a property?

There are a couple of old sayings when it comes to purchasing property:

"The best time to buy was yesterday, the second best time to buy is today! and Time in the market beats timing the market."

Despite recent falling prices, property is a long-term game and over time prices will eventually rise. The property market goes through ups, downs and plateaus, but property is a long-term capital growth strategy. Buying in a property downturn can reap returns with increased equity as the market lifts over time.

The right time to buy is when you can afford it, when you are ready to and when you have less financial responsibilities!

First home buyers can have the upper hand to seasoned owners or investors as they have had less time to accrue bad debts and have considerably less financial responsibilities and stress i.e. existing mortgage, children or aging parents.

With the tougher lending environment, scrutiny on credit history and household expenses, ‘cleaner’ first home buyers will be seen favourably by lenders.

Tip to first home buyers – make your move into the property market while your responsibilities and expenses are lower!

While everyone else is sitting on the fence, or simply waiting for that ‘bargain buy’, you could be the one who gets ahead in this very FAVOURABLE market.

Interest rates are at an all-time low, it would be silly not to take the plunge. It is not just about the property price but also the mortgage repayments. Here’s an interesting fact for you: although property prices were lower, your parents would have very likely paid anywhere between 7% to 17% interest on their loan.

Could you afford a property IF your interest rate is at that same level?

Don’t delay any longer. Contact us before you take the plunge into property ownership to ensure you are in the best position for your specific situation.

Sources and Links:

Domain: House Price Report, June Quarter 2018
Realestate.com.au: First home buyers are the cheeriest of them all, 4 Sept 2018
NG lending records and industry data

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and that your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. © 2019

WILL THE BANKS LOVE YOUR NEW JOB AS MUCH AS YOU DO?

Mon, 28 Jan 2019 07:01:00 GMT

Will the banks love your new job as much as you do?

So you have your eye on the job market and considering a new role.

You might also have plans to buy your first home, investment or upgrade. BUT…

Will the bank love your new job as much as you do?

There can be implications to your borrowing capability from that shiny new job.

What do the banks think?

A new job with a larger income can sometimes be the catalyst to buying a home or investment property. But although you may be delighted with your exciting new job, your lender may not be quite so happy.

Most lenders won’t approve a loan during the process of switching to a new employer but there are some that may consider approving your home loan before you have commenced your new role. If you can show stability with your prior employers they may take the view you are moving to a new employer to take advantage of a better salary or working conditions.

When assessing a home loan application lenders will usually consider:

how often you change jobs
whether you are staying within the same industry, or
if you are taking your career in a new direction

These factors influence the lender’s assessment of whether you are a good credit risk. They tend to prefer applicants who have a stable employment history with 1 to 2 years of steady or increasing income to determine the loan amount you are capable of repaying.

Switching jobs shortly before or after applying for a mortgage may make it harder to qualify. Most lenders prefer you to be in your current position for 6 to 12 months to borrow 80% of the property value. There ARE some lenders who allow you to borrow up to 95% of the value of the property – sometimes even if you have just started a new job.

What if I’ve only been in my job for 1 month?

Some banks recognise that despite a short employment history, many individuals are in a strong financial position and have industry experience. Your length of time in a job will be less of an issue if you have other sources of income, eg investments, royalties, second jobs etc. The lender may need proof this income has been steady for a couple of years and that you expect it to continue.

What if I am changing my career?

If you are considering a career change or have recently changed jobs, it does not necessarily mean you need to put your borrowing plans on hold. Increase your lending options by talking to us when you first start thinking about any life changes and definitely before making any decisions.

Do you move house often?

The stability of your home address is also considered, along with many other factors in lenders’ sophisticated credit scoring analyses to assess whether you are a good long term risk. If you are currently renting and planning to seek finance soon, speak to us before your next move to allow us to prepare your application in the most positive light. We can generally find a lender who will help, however if you are changing to a completely new industry or role then this will certainly reduce your chances of securing an approval. That’s WHY you need us to help!

Are there lenders who can help?

Many lenders now understand people actively change jobs to seek a higher salary or better working conditions. Not all lenders require you to be in your job for more than a year and some are tailoring products and qualifying criteria to meet these new norms.

What should I do now?

TALK TO US! Our role as your finance specialist is to keep up to date with the constantly changing borrowing criteria of most lending institutions so we can suggest a solution for your individual situation.

Sources and Links:

Oneshift, Changing Jobs – The New Trend in Young Australians 2015

KEEPING YOUR CREDIT SCORE HEALTHY

Fri, 04 Jan 2019 06:55:00 GMT

Your credit file is one of your most important financial assets. Safeguarding this file is an important part of the finance application process.

Your credit file contains credit applications, overdue credit accounts, payment defaults, clearouts (as a missing debtor), commercial credit information and public record information. You will have a credit score calculated from your credit file.

From September 2018, there is additional information about the credit products you hold on your credit report including:

The type of credit products you have held in the last two years
Your usual repayment amount
How often you make your repayments and if you make them by the due date1

Did you know that a score of less than 500 will severely affect your ability to gain finance from many lenders?

Do you even know what your score is or how easily it can be affected?

What is your credit score?

Credit scoring is a mathematical assessment of the data included in your credit report. The credit score is calculated by the credit reporting agency using a number of complex formulas. The score shows the likelihood of an adverse event recorded in the next 12 months. Scores range from zero to 1,200.

The higher your credit score the lower the risk that you will default. A ‘good’ credit score is between 622 and 7252.

Credit reporting

The credit report is the basis for your credit score. In Australia there are four credit reporting agencies: Equifax, Experian, Dunn & Bradstreet and Tasmanian Collection Service.

If you would like to see a copy of your credit report, contact our team today by emailing us at info@futurefinancegroup.com.au with a your full name and a copy of your driver’s license.

Your credit report is very important as it provides the information used to calculate your credit score.

You will have a credit report if you have applied for any form of credit.

This can include:

phone contracts
credit cards
residential or personal loans, or
hire purchase

So what affects my credit score?

There are some behaviours you can control that will affect your score:

late payments,
overuse of credit, and
limiting the number of credit applications

We have had clients lodge a loan application with us only to be rejected due to a poor credit score. When we investigated the cases we found there had been multiple credit enquiries listed in a short period of time. What the clients didn’t realise was that every time they were offered (and accepted) a new credit card (at their local grocery store and service station) these services were individually lodged as a credit enquiry.

Our clients had also sought pre-approval from various lenders while they were searching for a new home. These pre-approvals were also listed as a credit enquiry. When the time finally arrived to acquire their home loan, it appeared they had submitted many applications for a range of credit over a very short period. This history resulted in a low credit score and subsequent rejection by the lender.

Surely the lender can understand what really happened?

Unfortunately many major lenders are now treating credit scores as a black and white decision. If your score is too low then the loan application will be rejected – no questions or discussion!

What should I be doing?

You need to be conscious of your credit report. Make sure you meet all your credit obligations. If you are considering refinancing in the next couple of years, be aware of all agreements, pre-approvals and enquiries you make (where you sign a privacy agreement) as these will generally result in an entry on your credit report. These entries stay on your file for five years.

ASIC Money Smart Credit Scores
Finder, Equifax Score

SPENDING HABITS EXPOSED! BIG BROTHER IS WATCHING YOU…

Tue, 04 Dec 2018 06:47:00 GMT

Did you know that your daily spending habits could be the difference between securing your loan…or not?

This time last year the big news in the finance world was the introduction of tighter lending criteria by APRA (Australian Prudential Regulation Authority) designed to curb what the regulator saw as ‘heightened risk’ in investor lending. The result has been a considerably slower investment property market.

Now, in 2018, the focus of the regulator is the accuracy and verification of borrower income and spending information in support of loan applications.

WHY ARE THEY DOING THIS?

APRA plays a key role in protecting the financial wellbeing of the Australian community. Their focus on lenders’ assessments of borrower living expenses and total debt is aimed at ensuring a more realistic assessment of a borrower’s genuine capacity to repay their home loan .

Why is this important?

We may be currently enjoying the lowest interest rates on record, however what goes down must eventually go up.

If you are a property owner and your financial situation isn’t quite as healthy as your lender might think, you could find yourself struggling if and when interest rates eventually begin to rise. And NOBODY wants to be heading into mortgage stress further down the track!

What if you’re applying for a loan? Could it affect YOU?

Whether you are a potential first hom e bu yer or a current property owner looking to invest further, chances are you may be subject to this increased level of scrutiny if you apply for a new loan.

The answer? Make sure you can substantiate your stated income, expenses and any other loans or debt. Ask us how!

Big Brother is watching…

Many lenders now have greater visibility over your spending. Have you noticed that your transactions are grouped into categories such as groceries, utilities, cash out, retail spending etc on your online statement? It is also important that you and your partner are on the same page when it comes to managing your finances.

So… how can we help?

There can be a variety of reasons a lender may reject a loan application. This is where our expertise comes to the fore – we help you navigate a sometimes complex process and ensure you are ‘loan application ready’.

It is our job to keep up with regulatory changes, interest rates and loan products to help you find the most suitable home loan for your individual circumstances. An accurate assessment of your situation and home loan readiness will help you move forward with confidence.

ENERGY COSTS…OUR GREATEST FINANCIAL GRIEF

Thu, 01 Nov 2018 06:44:00 GMT

Average annual electricity bills in Australia hover around $1,600 per state, even hitting as high as almost $2,000 in South Australia.

The average annual electricity bill for a family of five can climb to as much as $2,576.28.

The somewhat unpredictable Aussie climate coupled with a growing population is increasing demand on energy use.

Q. How do you compare? Your energy bill may hold the answer.

Most electricity providers publish helpful information on your bill statements including power used, what it costs and how your usage compares to customers in your area.

Q. What are the main factors that determine the average cost?

Electricity usage – how often energy efficient appliances and higher energy consuming appliances e.g. air conditioners are used.
Electricity prices – the price you pay for power, along with the usage, will determine your overall costs. Online comparison site Canstar Blue offers an electricity comparison tool to help you get the best deal possible.

The power is in your hands (pardon the pun) to reduce your energy bills:

Get the best deal possible, and
Control your energy usage!

Q. How can you control your energy usage?

These tips from Energy Australia could help make a difference to your next energy bill.

Heating and cooling

Reduce the energy you use by:

Closing doors to unused rooms
Closing curtains or window shades
Using blankets, electric blankets, wheat bags or hot water bottles instead of heating the room
Cleaning your air conditioner or cooler so it doesn’t need as much energy to run
Turning off heating or cooling when you are not home and during the night

The family room

Switch off appliances at the wall – appliances still use energy in standby mode
Use a power board – switch off all appliances with the one switch
Use lamps or spotlights – use these small amounts of light instead of main lights
Use energy-saving globes – change old globes to fluorescent ones
Too many lights on – turn off lights you are not using

Kitchen

Microwave oven – uses less energy than an oven
Stovetop – keep lids on to reduce the amount of time and energy used
Dishwasher – use the economy cycle and only use when full

Laundry

Washer or dryer – only use with a full load. Use a clothesline instead of dryer whenever possible

Bathroom

Water use – install water-saving showerheads, shorten showers, set the hot water temperature to 50 degrees
Appliances – switch off when not in use

Outside

Timers and sensors – to light outside areas
Solar – for garden and outdoor areas
Lighting – separate the lights to choose which areas to light

Create good habits

Many of us set financial budgets to help manage our cash flow. We can take the same approach to our energy bills:

Set an energy spend in your yearly budget and track your spend
Make some of the changes mentioned above to reduce your bills
Review your energy bills on a regular basis

With smart budgeting and energy saving tips, you can manage your cash flow and put more dollars back in YOUR pocket.

Canstar Blue electricity customer satisfaction survey , January 2018
https://www.energyaustralia.com.au/blog/betterenergy/how-save-energy-your-home

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs.
We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2018

10 STEPS TO SUCCESSFUL PROPERTY INVESTMENT

Wed, 17 Oct 2018 06:33:00 GMT

Property has been considered a popular path to wealth creation for Australians for many years. It has the potential to generate capital growth (an increase in the value of your asset) as well as rental income. There are also tax advantages associated with negative gearing. However, when buying an investment property it is wise to remember that you are making a business decision and it’s worth taking the time to plan.

1. Do your homework

You are not buying from the heart but from the head so it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long-term objectives and factor in potential changes to your current situation (e.g. the birth of a child or the loss of one income).

2. Understand negative vs positive gearing

Positively geared properties – rental income is higher than your loan repayments and outgoings. Tax is likely to be payable on the net income. Negatively geared properties – rental income is less than your loan repayments and outgoings. The loss can be offset against other income earned, reducing your assessable income and therefore your tax payable.

3. Decide how to fund it

You’ll probably need a property investment loan. The deposit can come from your savings or alternatively from equity in the home you live in. It can also be possible to invest in property via a self-managed superannuation fund.

4. Choose the right loan

There are two types of loans: ‘principal and interest’ and ‘interest-only’. Interest-only loans defer the obligation to repay the principal. The best loan type will be dependent upon your individual circumstances so it is best to talk to us.

5. Find out how much you can borrow

This is an essential step. It sets you up to be realistic in your expectations and allows you to focus your property hunting time on properties you can afford.

6. Calculate your upfront costs

Remember to factor stamp duty, loan application fees and legal costs into your plans. A building and pest inspection is also a must to avoid expensive headaches down the track.

7. Estimate ongoing costs

All properties incur ongoing expenses (e.g. rates, insurance etc.). You’ll use your rental income to cover most or all of these but you might need to have some spare cash set aside until you start receiving rent (most agents pay the owner at the end of each month so you won’t receive rental income straight away).

8. Finding the right property

This is obviously the area in which you will spend the most time. It doesn’t have to be a home you would live in. Think about which features are universally appealing and of course remember the old adage – location, location, location!

9. Find a good property manager

It is a good idea to look for personal recommendations from tenants and landlords you may know.

10. Cover yourself with suitable insurances

Some insurance companies now combine building cover with specialist landlord insurance. You should also consider life, TPD and income protection insurance to ensure your family doesn’t suffer financial hardship repaying loans if the main income earner is unable to work.

GIRLS JUST WANNA HAVE FUNDS

Tue, 18 Sep 2018 04:05:00 GMT

9 tips to help you achieve your savings goal

Tip #1: Work out what your goal is:

You need to determine what your end goal is, whether it be that you are looking to purchase a first home or your next property. Work out what end figure needs to be in your savings account and put it in writing.

Tip #2: Make an honest and realistic budget

Go through your everyday living expenses and work out where it is that you can cut back on unnecessary expenses. Things such as making your lunch each day instead of buying it, cutting out those subscriptions like Foxtel or Netflix, and stopping yourself from buying that new pair of shoes. This will help greatly in accelerating your savings goal.

Tip#3: Open a separate high interest savings account

Opening up a new high interest savings account, like an ING Savings Maximiser, will help earn you extra interest on top of your savings. Having this account separate to your everyday account will keep your savings away from your spending money.

Tip #4: Make your savings automatic

Set up an automatic EFT or direct debit from your everyday account on pay day to your savings account. This will make your savings a priority. When your wage hits your account, you won’t even notice that the budgeted money has been filtered into your savings account, which will help you reach your goal quicker.

Tip #5: Know where your money goes

Print out your everyday account statements for the last 90 days and use a highlighter pen to go through them thoroughly. This will help you determine where your money is being spent, how much your living expenses are and put both into perspective for you. This will also help you draft a budget.

Tip #6: Consolidate your credit card debt

Consolidate all of your credit card debt into one personal loan to help bring your repayment down into one understandable figure.

Tip #7: Cancel unnecessary credit cards

If you have any credit cards where the balance is $0, cancel them! This is going to remove temptation and stop you from spending money where it isn’t needed. This will also help ramp up your borrowing power when it comes to purchasing a property and applying for a mortgage.

Tip #8: Treat yourself at each milestone

When you create your initial goal and savings plan, be sure to set yourself some milestones. When you reach a milestone, treat yourself. It’s positive reinforcement for a job well done.

Tip #9: Be accountable

We suggest that you have a six-week follow-up with a professional, family member or friend who is helping you on your saving journey.

If you would like to speak to one of our mortgage brokers in regard to helping you arrange a budget and savings plan, please call us today on (03) 8657 8664.

Good luck and happy saving!

DEBT GOT YOU DOWN?

Thu, 30 Aug 2018 04:04:00 GMT

As of January 2018, there were more than 16.7 million credit cards in Australia. The same records show more than 70% of us had a credit card .

In addition:

Australian households have the fourth highest debt levels in the world after Denmark, The Netherlands and Norway.
The ratio of average household debt to income has almost tripled since 1988 from 64% to 199.7% of annual disposable income.
Average debt levels are $4,181 per person for credit card balances and $18,409 for car loans.

So, what does this mean for the ‘average’ Australian?

If you are a prospective home buyer and have ‘average’ levels of accumulated debt it could affect your borrowing power by almost $100,000.

With the median Australian house price at $818,416 what impact might this have on your home ownership dreams?

Perhaps ask yourself these questions…

Is your debt growing faster than your assets?
Are you concerned about your debt situation?
Are you struggling to make your monthly repayments?
Does it always seem like your bills amount to more than your wages?

If you answered yes to one or more of these questions, then perhaps it’s time to look at a solution for your debt situation NOW – before it’s too late.

Why do so many of us have debt problems?

Some people fail to recognise that using credit to purchase items for use today means they are spending their future earnings before they have even received them.

In the past, lenders offered credit cards, with pre-approved limits, without thoroughly checking credit histories or capacity to repay. With debt levels on the rise, the government is currently reviewing credit card rules – there is a push for lenders to assess suitability based on a consumer’s ability to repay within a reasonable period.

How have times changed?

In the past we saved up or used the lay-by method, i.e. we used money we already had for items we wanted. Now, as an instant gratification society with an abundance of credit at our finger tips we are tempted to use it without considering future consequences. It’s little wonder many people experience high levels of debt.

What are the first signs of trouble?

You think it is unlikely you will be able to repay your existing debt with your foreseeable future income.
You have multiple credit cards.
You are no longer paying the full balance of your debt each month – you just pay the minimum amount.
You have arranged for more credit cards (or a personal loan ) to help pay off other cards.
You have added a store card(s) because there was no room left on the credit cards.

Eventually your repayments start to approach – or even exceed – your income.

What is the solution?

We all know that good budgeting and discretionary spending discipline is the real answer, but sometimes it doesn’t matter how well you budget there’s just not enough money to make ends meet.

One solution (and this is not for everyone) may be debt consolidation.

It may be too late for budgeting because the debt level is already greater than your income. In this instance, debt consolidation may be an option for you.

What is debt consolidation?

This is when you take multiple debts (where the majority of the debt has a much higher interest rate) and consolidate the debt into one loan with a lower average interest rate. Generally most people opt for refinancing against their home (using existing equity) as it has the lowest interest rate. For example, your home loan rate may be 5.0% or even lower as opposed to a personal loan that might be 10.95% or higher (definitely lower than most credit cards).

How can we help?

If your debt levels are a concern and you think you may be experiencing the first signs of trouble – CALL US NOW – before it is too late. We don’t judge. We are here to help.
Ask us for our debt consolidation spreadsheet to see how much we can potentially save you each month to go towards the payment of your debt. You may be surprised.
Even if you are managing your current debt, it never hurts to review your finances to see how your cashflow can be impacted favourably.
If you have friends or family who you think could benefit from reading this article, please forward it to them.
finder.com.au
abs.com.au
moneysmart.com.au
4. domain.com.au/June2017

ARE YOU SUFFERING FROM DEBT LAG?

Wed, 15 Aug 2018 05:50:00 GMT

Australia is a nation of international travellers. During 2016, a record-breaking 10 million Aussie residents travelled overseas on a short-term basis 1. That’s 41 out of every 100 of us!

It’s no wonder we often hear people say, “no matter where you travel overseas you’ll run into an Australian”.

Of course, the travel bug comes at a cost. So, the more you plan, budget , save and pay towards your trip BEFORE you travel, the better off you will be AFTER your holiday.

Nobody wants their dream trip to become a travel debt nightmare. Jet lag we expect but ‘debt’ lag should be avoided at all costs.

The potential cost of debt lag

A 2016 travel report2 claimed Gen Y was the biggest spending generation with a yearly holiday outlay of $11 billion.

Gen Y is also our new generation of property buyers, a generation which may be shocked to realise their overseas holiday adventures are severely denting any future home ownership plans.

All lenders assess your debt, repayment history and credit report during the home loan application process. A large travel balance could impact both your credit score and ultimately your ability to be approved for a home loan.

If you are a current homeowner, you don’t want to find yourself drowning in holiday debt or experiencing an unexpected shift in interest rates that leaves you struggling to meet your repayments.

How do you avoid debt lag?

Here are our top tips:

Planning is key. Create a holiday savings plan well ahead of your travel date. Look for early bird discounts.
Avoid peak season. Travelling during off-peak times may deliver extra savings.
Research exchange rates. If rates are favourable against the $AUD then load currencies on a travel card before you leave.
Consider all possible costs. It’s often the expenses you did not anticipate which sink your budget.

Managing debt lag

How can you pay off debt sooner?

There are a number of ways to manage credit card debt. Paying minimum repayments over a number of years is certainly not the best of them.

Whether you are an existing property owner or a potential future property owner, managing credit card debt will help protect your financial future.

afta.com.au.au/AFTA Travel Trends Rort March 20172.
Westpac travel report 2016

*Disclaimer: This article is generic in nature. All investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.

THE REAL WORLD…LIFE AFTER GRADUATION

Mon, 30 Jul 2018 01:43:00 GMT

Congratulations! Here you are in your cap and gown, degree in hand. This is what you’ve been working towards these past few years. So…what’s next?

Completing tertiary study can be both the most exciting and daunting time of a graduate’s life. Some may head off for post-study travel (read our article about ‘debt lag’!) but for most, graduation marks the transition to their chosen career and the first step into the ‘real world’.

Getting started

Finding a job will be top of mind for most graduates. A 2016 student survey found:

70% of graduates agreed it was more important to feel fulfilled at work than earn lots of money.
64% were willing to make sacrifices in their personal life to develop their career, and
66% expected to work 41 hours or more per week in their first professional role to get ahead.

It seems the future of our workforce is in good hands!

Becoming independent

This is also a time when some young adults move out of home. Perhaps you need to relocate for a job or it’s simply time for more independence? Regardless of the reason, learning to be responsible for our own finances and expenses can be confronting.

It’s important to plan , budget and consider all costs you will incur BEFORE you move, including:

Will you live alone or share? Your weekly rental limit will determine the location and property type.
One-off costs such as rental bond (usually 4 weeks rent), rent in advance (usually 2 weeks rent), removalists, connection fees for phone, internet, utilities plus furniture, linen, kitchenware, household supplies etc.
Ongoing costs such as rent, gas, electricity and water bills, food, entertainment, transport and/or car costs and home contents insurance.

If you have an informal arrangement in a share house there are usually no real legal ties. If you sign a lease, there are binding legal and financial obligations. If you are sub-letting under your lease, you are responsible for the care and upkeep of the property. Make sure you understand what you’re signing.

How to manage and get ahead

What are the ‘golden rules’ to help you manage your money and protect your financial future?

1. Create a budget and live by it

Try to divide your salary into 50% for essentials, 30% for lifestyle and 20% for savings. If you can’t manage to live and save, perhaps revise your plans?

2. Avoid ‘dumb’ debt

Credit and store cards can lead to a financial disaster. If you have a credit card ensure you are disciplined about usage and repayments.

3. Protect your credit rating

Pay your bills on time, which means before the bill is due not at the second final notice. Poor financial habits can affect your ability to qualify for a home loan.

4. Don’t ignore superannuation

It’s wise to understand now the role superannuation plays in your future. It should be part of your financial planning from your 20s, not your 40s.

Remember your student loan…

This can be the ‘elephant in the room’ for students, so what are the facts? Compulsory repayments through your tax return are required when your income exceeds a minimum repayment threshold. You can also make voluntary payments at any time. Student loan repayments should be factored into your long-term financial planning.

As of January 2016, if you have moved overseas your repayment obligations will remain the same as if you are living in Australia.

Protecting your future

Living life on a single income leaves you open to one critical risk you may not have considered. How will you afford your lifestyle if something happens to you and you can’t work? How do you protect the income you are currently depending on?

When we’re young and healthy, few of us think of anything going wrong but it’s important to understand how to protect your income.

We’re always here for a chat so please don’t hesitate to contact us.

The GradAustralia 2016 student survey/The Australian
www.ato.gov.au

IS IT POSSIBLE TO GET AHEAD FINANCIALLY WHILE STILL ENJOYING LIFE?

Mon, 09 Jul 2018 23:51:00 GMT

Getting ahead financially doesn’t have to be a choice between living life to the fullest or being tied down in your own home with a huge mortgage.

Did you know you can possibly get your foot in the door of the investment property market without having to save for a huge deposit? The tax man and your tenant’s rent could help you pay off your investment loan.

Be a little more disciplined with your budget and finances, and before you know it you may be sitting on a nice little investment property – a property which is making you money until you are ready to buy your dream home.

Have you heard of the saying, ‘making money while you sleep’? Well, it could happen.

Yes, you can buy an investment as your first property!

Purchasing a small house or apartment in a low-cost area and renting it out can be a good way to build equity over the next few years. You can even repeat the process before eventually buying your own place in an area where you want to live.

It is an increasingly appealing strategy for many young Australians. With their lifestyles and work commitments are flexible, so too can be their living habits.

You can buy an investment property in another suburb, city or even state while you keep renting in a convenient area where you prefer to live. Even staying at home for a while longer can be attractive while you purchase your first investment property.

Home ownership is a goal for most of us but it can seem out of reach when you are struggling to save a 20% deposit. However, property ownership can be realistic if you consider starting out with an investment property.

How it works

Lending institutions include a percentage of the expected rent from your tenants as part of the income towards servicing your investment loan (so you can probably borrow more than you could if purchasing a home)
Loans for 90% (or higher) of the property value are available for property investors, meaning you don’t need to have such a big lump sum available. This may require you to only fund the legal costs, stamp duty and lenders’ mortgage insurance (often around 4-5% of the purchase price) in addition to your small deposit. When you talk to us we can calculate this figure for you and work out your most suitable options.
Investors have typically used interest-only loans, making mortgage payments much lower – allowing you to gain equity while minimising cash outflow in a medium to longer term capital growth strategy. However, lenders have introduced restrictions on interest-only loans over the past year so it’s worth having a chat to us about this.
Negative gearing tax benefits are available in cases where the costs of your borrowing to invest are greater than your income from the property. This means a rebate from the tax man. Way to go!

But you don’t want to miss out on the First Home Owner Grant?

The First Home Owner Grant (FHOG) is a national scheme funded by states and territories and administered under their own legislation. Changes to the FHOG took effect from 1 July 2017 – some states and territories provide additional grants and subsidies under certain conditions. In some states you need to live in the property first to qualify for the FHOG so this may rule out the FHOG as a future option if you elect to go ahead with an investment property strategy.

This is a reasonable concern. Ultimately, you need to weigh up whether being in the property market could be better than not being in it. You may find that the capital growth you could experience over time is well in excess of the FHOG.

Alternatively, you could focus on the potential for capital gain and rental income to help you start building wealth now. You may find that by investing this way you will be ready to buy your own dream home sooner. With possible additional tax advantages you might even get back more than the amount of the grant! You should seek advice from your accountant to confirm your individual tax position.

On the other hand, in some states, if you purchase an investment property first and have never occupied it, you may still qualify for your FHOG later on. We suggest you visit www.firsthome.gov.au to see if this applies to you. If that’s too confusing, we encourage you to call our office for a chat.

9 STEPS TO SUCCESSFUL PROPERTY INVESTMENT

Tue, 12 Jun 2018 00:01:00 GMT

Property has long been considered a popular path to wealth creation for Australians. It has the potential to generate capital growth (an increase in the value of your asset) as well as rental income. There are also tax advantages associated with negative gearing. However, when buying an investment property , it is wise to remember that you are making a business decision and it’s worth taking the time to plan.

1. Do your homework

You are not buying from the heart, but from the head, so it is important to assess your current financial position. What are your cash reserves and/or what equity do you have in your present home? Look at your long-term objectives and factor in potential changes to your current situation (e.g. the birth of a child or the loss of one income).

2. Understand negative vs positive gearing

Positively geared properties – rental income is higher than your loan repayments and outgoings. Tax is likely to be payable on the net income subject to qualifying capital allowance deductions.

Negatively geared properties – rental income is less than your loan repayments and outgoings. The loss can be offset against other income earned, reducing your taxable income and therefore your tax payable.

3. Decide how to fund your deposit

You’ll probably need a property investment loan. The deposit can come from your savings or alternatively from the equity in your home. It can also be possible to invest in property via a self-managed superannuation fund using your super savings as a deposit*.

4. Find out how much you can borrow

This is an essential step in order to be realistic in your expectations and focus your property hunting time on options you can afford.

5. Choose the right type of finance

There are generally two types of loans being ‘principal and interest’ and ‘ interest-only ’. Interest-only loans defer the obligation to repay the principal. The most suitable loan type for you will depend upon your individual circumstances so it is best to talk to us.

6. Calculate your costs

Remember to factor in upfront costs such as stamp duty, loan application fees and legal costs. Building and pest inspections are also a must to avoid expensive headaches down the track. All properties incur ongoing expenses (e.g. rates, insurance etc.) – you will also need to estimate these. You’ll use your rental income to cover most or all of these costs but you may need to have some spare cash set aside until you start receiving rent (most agents pay the owner at the end of each month so you won’t receive rental income straight away).

7. Find the right property

This is obviously the area in which you will spend the most time doing your research. The property doesn’t have to be a home you would live in. Think about the features which are universally appealing and of course, remember the old adage – location, location, location!

8. Find a good property manager

It’s a good idea to seek personal recommendations from tenants and landlords you may know.

9. Cover yourself with suitable insurance

Some insurance companies now combine building cover with specialist landlord insurance. You should also consider life, total and permanent disability, and income protection insurance to ensure your family doesn’t suffer financial hardship repaying loans if the main income earner is unable to work.

**Different rules apply to an SMSF borrowing arrangement i.e. higher deposit and lower maximum LVR with minimum required cash reserves in the fund as per lender guidelines**

IS UPSIZING ON YOUR WISHLIST?

Tue, 15 May 2018 04:24:00 GMT

With a generation of baby boomers entering retirement there is no end of information available regarding tips to downsizing from a home. Yet for a generation of homeowners with entirely different needs, what do you need to know when it comes to upsizing your residence?

Common reasons for upsizing

Chances are you’ve been perfectly happy in your first little house or apartment, but life evolves and with that so too do our living requirements. Reasons for upsizing may include:

marriage
having children
a growing or blended family
starting a home business
additional family moving in
buying a larger property while keeping the first as an investment
windfall/inheritance

Before you start…

Moving on to a new stage of life can be both exciting and scary. The most important task is to define your goals and do your homework before you proceed. Key points you should consider are:

Long-term goals

What are your future plans in terms of lifestyle, kids’ schooling, additional children, potential investment or financial return? When choosing the size, type and location of a property, asking yourself these questions will help you define the right property for both now and in the future.

Borrowing power

We can help you determine your current equity and potential borrowing capacity for your individual circumstances. If you haven’t had a property valuation for a while it’s possible that during that time, capital growth or renovations have resulted in equity you didn’t realise you had.

Ask us for a property report for your area

If you require a valuation we can assist you with a referral to our property valuation specialist to determine what potential equity you may have.

Additional costs

A larger home will also translate into increased costs. Some of the costs which should be factored into your financial considerations are:

Maintenance costs – lawns, gardens, painting etc. Swimming pool? Make sure you add pool maintenance
Utilities – include transfer costs, plus heating and cooling a bigger space will probably mean larger ongoing utility bills
Property taxes – council rates will most likely increase. Don’t forget stamp duty either – this is often a significant cost in a property purchase. Land tax may also be applicable
Home insurance – home insurance premiums will increase exponentially with the value of your new property
Furnishings – with more rooms to fill you may want to factor in not only more furnishings, fixtures and appliances but the need to review home and contents insurance
Renovations – are renovations part of the plan in order to ensure your new ‘dream home’ matches your dream?

Research and consideration of all possible costs involved in upsizing your property will help you move forward with confidence.

As your finance specialist, it is our role to help you explore finance and structure options most suitable to your individual circumstances and your future financial goals.

Getting ready!

So…you’ve explored your financial options and you’re almost ready to take the leap. What’s next? Now is the perfect time to start preparing for your big move, especially if you’re contemplating listing your current property for sale (or lease) in the next peak selling/buying season.

Decluttering

This can be both necessary and cathartic but remember you will also be filling a larger space. Assess items on usefulness – there’s no point in tossing something only to have to buy a replacement. Start packing and storing now – not only will you declutter your home ready for market, but you’ll also be ahead of the game come moving time.

Painting and repairs

Ideally, you will only want to spend as much as is necessary to ensure or improve the market appeal of your property. Seek guidance from our experts.

If upsizing your property is on your wish list this year then call our office and we will gladly book you in for a chat to discuss your options.

ARE YOU A SUCCESSFUL SAVER?

Mon, 23 Apr 2018 01:24:00 GMT

Research¹ shows around 57% of Australian adults are savers although only 16% manage to put away the pennies quite easily. When we feel burdened by the mere cost of living, it is often difficult to establish a savings plan. However, creating a savings habit plays an important role in our ultimate financial future.

Try our six saving tips!

We often convince ourselves to spend money on things we simply don’t need. Becoming a good saver is a game of psychology – it requires awareness of the unconscious triggers which prevent us from keeping our money in the bank. Creating certain habits can help combat the impulsive and seemingly innocuous behaviours that cause us to overspend. We encourage you and your family to try our six saving tips:

1. Aim to be above average with a savings goal

What are you saving for? Having a specific goal helps you stay more focused on the path to getting there. However… Research2 shows the average Australian saves $427 per month. If you’re not already saving this amount, think about how you could live with a little less cash each month.

2. You need a budget

Creating a budget and deciding how much needs to be allocated to savings can change the way you view the money you have available to spend.

When you evaluate how much money you have ALLOWED yourself to spend on unnecessary items, you’ll possibly reconsider a lot of purchases.

3. Automate!

Find ways to automate as many transactions as possible including direct deposits, automatic transfers from one account to another and automatic bill pay.

By creating automatic transactions you relieve the burden of making sure regular payments happen each month and you’re less likely to break the saving habits you created when you formulated your budget.

4. Set incremental savings goals…

Decide on some savings goals which are both short and long-term. Without goals it’s easy to lose interest and fall back into bad spending habits. Like most tasks, the immediate excitement of starting a new project can quickly become mundane without motivation. Keep yourself inspired with smaller milestone targets which you celebrate as you tick off each one.

5. Focus on gains – not losses

Seeing your savings grow can often lead to more happiness. Believe it or not, many people gain as much pleasure from saving money as they do from spending it. This can dramatically change the way you perceive your finances. However, if you’re saving and money is tight it can lead to frustration when you see an item you’d really love to buy. You may find yourself questioning the value of saving when an item that will ‘make you happy’ is right there. Avoid viewing your inability to purchase a flashy new item as a loss. Do you really need it or is your money better off in the bank?

6. Avoid impulse buying!

Always prepare a shopping list and stick to it. You may do this for groceries, but you should apply the same principle to every shopping outing.

Most shop layouts are created to maximise impulse buying. Having a list of the items you need avoids aimless wandering and unnecessary purchases. Use cash and not credit cards. It is well documented that we tend to spend less when we have to hand over cash instead of swiping a card. When we calculate how much we have to spend beforehand we are more likely to stick to our limit. Developing achievable saving and spending habits will have you ready to combat almost any impulse spending situation. Those who have been around a while will tell you that ultimately, immediate gratification is never as satisfying as the long-term realisation of your goals.

If you know people in your life who you would like to encourage to save more, feel free to contact the office for a copy of this article for you to send to them. Good luck with your savings goals this year!

Sources and links:

MoneySmart brand tracking program, Sweeney Research January 2014
suncorp.com.au

FIRST-HOME BUYERS…HOW TO PASS THE GENUINE SAVINGS TEST.

Mon, 19 Mar 2018 00:14:00 GMT

Dipping a toe into the property market for the first time can be a learning curve on a number of fronts. A first-home buyer (FHB) can often find lender policies confusing when trying to understand exactly what they need to do to meet requirements.

The concept of ‘genuine savings’ is potentially puzzling, and it doesn’t help when each lender tends to have their own policy.

Now, you’re probably thinking, “But surely savings are savings?” Well…not necessarily. As part of a lender’s assessment of your suitability as a ‘good borrower’ they require evidence of your ability to plan and save for a deposit yourself.

Definition of genuine savings

This term is used by lenders to define the amount of funds a home loan applicant has ‘genuinely’ saved over time. Requirements may differ depending on the total amount you borrow. For instance, if you have:

20% deposit – proof of genuine savings is not required
15% deposit – proof of genuine savings is not required by most lenders
10% deposit – most lenders require proof of genuine savings
5% deposit – all lenders require proof of genuine savings

What are considered ‘genuine savings’?

The following are generally considered ‘genuine savings’ if they add up to more than 5% of the purchase price (10% if you are an investor):

savings held or accumulated over 3 months
term deposits, shares or managed funds held for 3 months
equity in real estate (this can vary between lenders)

Some lenders require a six-month savings history. If you have been renting for more than three months, there may be some exceptions to the above.

Of course, you can pay more than the minimum deposit, and the remainder of your deposit may come from any source, as long as you have met the lender’s genuine savings criteria for 5% of the purchase price e.g. when buying a $600,000 home, you will need to show $30,000 in genuine savings.

What DOESN’T count?

The following are NOT considered ‘genuine savings’:

cash gifts
inheritance
tax refunds
bonuses
savings plans
selling your car or other assets
First Home Owner Grant (FHOG)
funds held in a business account
borrowed funds e.g. personal loan
lump sum deposits (funds from the sale of property is an exception)
developer/builder rebates or incentives

The power of rental history

If you have a strong rental history, some lenders may make an exception and consider other sources e.g. a gifted deposit from parents.

However, there WILL be criteria you will have to meet, and your rental history will have to be proven.

If you’re a renter considering future property ownership, it pays to know what lenders look for as part of their ‘rent exception’ assessment.

At the time of your loan application, the home loan applicant(s) must:

be currently renting
have a minimum six months of satisfactory rental history and on-time payments
be listed as tenants on the lease
be renting via a licensed property agent or privately (NB: private rentals may be assessed on a case-by-case basis)

Don’t think renting will make the process easier. Lenders will be tougher if there are no genuine savings in a bank account. They will analyze how you manage your money through your savings and spending history. Even if they assess rent as genuine savings you will still need to prove you have the deposit (or ‘funds to complete’) at the time of your application.

The most crucial tip?

Make sure you have your loan application ready BEFORE you apply. As your finance specialist, we have extensive experience across a range of lenders and will do the legwork for you.

The earlier you contact us on your path to home ownership, the earlier we can assess your situation and provide guidance on how to get you to where you want to be.

REDUCE CREDIT CARD LIMIT TO RAMP UP BORROWING POWER

Mon, 19 Feb 2018 01:47:00 GMT

Are you looking to enter the property market or upgrade your existing home, but it feels out of reach?

Many of our clients are keen to understand what influences their borrowing power and how they can improve their borrowing capacity to be a step closer to securing their next home or investment property . Did you know your credit card limit directly impacts the amount you can borrow? A simple change can make it one of the quickest ways to increase your borrowing capacity.

Lenders don’t just look at your outstanding credit card and minimum monthly repayments when assessing your loan application. They look at what your total repayments would be if you used the credit card limit in full, even though that may not be the case. The lenders’ rationale is that you have the ability to utilise the limit, and so they must take this into account when determining your repayment serviceability.

If you have significant credit card limits not being used, it could be of great detriment to your borrowing capacity.

How much can this impact your borrowing capacity if you are trying to purchase a property?

Let’s look at the following scenario:

When assessing your loan, the lender calculates your monthly financial commitment on the maximum credit limit of $17,500 (equating to $525 per month) and NOT the current balance of $4,500 (equating to only $135 per month). The difference of $390 per month could be used as repayments towards your new property loan. This $390 per month could equate to an additional borrowing capacity of approximately $63,500 (based upon a 25-year loan at 5.5% p.a. interest rate with P & I repayments).

Importantly, interest-free cards will also reduce your borrowing power. Even though many cards are interest-free, the lender will assume a monthly commitment against the limit of the card (generally at approximately 2.5% per month) to allow for the amortisation of the principal.

The impact of reducing your credit card limit

For every $1,000 that you reduce your credit card limit, your monthly available income will be increased by between $30 and $50. This generally equates to an increase in borrowing capacity of approximately $4,100 (based upon a 25-year loan at 5.5% interest rate).

What can you do?

Cancel unnecessary credit cards and store cards to consolidate your credit card debt. This will reduce your monthly financial commitments and free up your income for other repayments. Do you really need more than one credit card if it is directly impacting your borrowing capacity?
Reduce the limit on your cards to the minimum practical amount for your personal situation.

Before you do anything, please call our office today to determine if reducing your credit limit will boost your borrowing power. We will assess your personal situation and determine the best way to maximise your borrowing capacity.

Disclaimer: This article is generic in nature. All finance and investment decisions should be considered wisely and based on your personal and financial circumstances. Seek proper advice before committing to any course of investment action. This is not deemed as advice.

RENOVATIONS – ARE YOU RENOVATING FOR FUN OR PROFIT?

Mon, 22 Jan 2018 02:45:00 GMT

Planning a renovation? Some people love to buy a new home, sit back, relax and do nothing. Others itch to renovate their home at some stage – especially if they believe in the age-old advice of buying the worst house in the best street.

If you are planning on living in your purchase for many years, it makes sense to ensure its renovation provides the features and inclusions that will enhance your lifestyle and support family changes over time. Beware though – when your heart is involved it’s easy to overcapitalise.

What if your property has been bought as an investment? When it comes to renovating an investment property it pays to leave your heart firmly tucked away and have your head in the right place. The ultimate aim is to maximise the return on your investment. The good news? You really don’t have to spend a fortune to make a profit.

As a general rule, renovations fall into two categories – structural and cosmetic.

Structural changes

These include changes to floorplans and structural additions which usually cost more but often have greater potential to add value to a property. For example, if you are adding a bedroom, it is likely the home’s value will edge up into the next price bracket depending on location.

Cosmetic changes

These involve aesthetic improvements such as painting and rendering, floor coverings as well as kitchen and bathroom upgrades. Cosmetic changes can add immediate pizzazz to a previously dowdy property, however they also start to depreciate as soon as they are finished. To ensure maximum impact from a cosmetic renovation it should be completed no more than 18 months prior to listing the property for sale.

Return on investment (ROI)

As a financial rule of thumb, your renovation should give you a return of at least $2 for every $1 you spend. It pays to do your homework in the local area:

How do sales of renovated properties compare with those in original condition?
What features make some properties highly appealing while others wallow on the market?

Visit recent developments that are selling fast to see what builders are doing to attract buyers.

Kitchen and bathroom renovations often deliver the best return but once again, do your homework. Some markets will pay for extra panache. The demographic of potential buyers will ultimately determine the most desirable features to consider in a renovation.

Fake it ‘til you make it!

It may be tempting to go for cheap materials but those that are poor quality can end up costing you more in repair and replacement costs.

Track down expensive looking fake or imitation finishes such as:

re-purposed or recycled materials
faux finishes that look like the expensive real thing, e.g. brick that looks like marble, laminate that look like granite, decorative paint finishes, and wallpapers which imitate other finishes
basswood instead of real timber venetians

DIY or professionals?

Reality TV shows like The Block have renewed interest in renovating across Australia. The true reality is that renovating your home can’t always be a DIY job.

Some tasks should only be attempted by a reputable, qualified tradesman. Yes, it may cost more initially to seek experienced help but it will save you time and money in the long run. Hiring a professional will ensure that the work completed meets building standards, preventing costly repairs. Jobs best left to a qualified tradesman include:

electrical work
plumbing
structural changes

Paying for your renovation

There may be a number of options for financing your renovation. These will be dependent on the size and cost of the renovation and your individual circumstances.

Options may include:

using the equity in your home
construction loan – for a major renovation
line of credit

Call the office and we would be pleased to book you in for a chat to discuss your finance options.

A renovation can definitely provide a profitable return on your investment. You can achieve this by a combination of research and using smart strategies for both materials and the services you hire. You may even benefit from tax deductions.

HOW TO STAY CALM (AND SAVE MONEY) THIS FESTIVE SEASON

Tue, 19 Dec 2017 04:07:00 GMT

Christmas Day is less than a week away and Australians are once again in the throes of festive season shopping madness.

More are us are opting to buy gifts for loved ones online, yet large bricks and mortar retail hubs across the country still seemingly draw desperate crowds seeking last minute gifts. Whichever way you go, preparing for December 25 can often be a stressful experience.

It is however possible to remain calm and enjoy the lead up to Christmas Day, without breaking your budget.

1. MAKE A LIST AND CHECK IT TWICE

There are so many positives to making lists for all the items you need to buy. Not only will having a list aid in keeping you organised, it will also clearly track spending.

Items to list:

Gifts for family and friends
Entertainment supplies in the form of food, drinks, decorations, party games etc.
Travel arrangements

2. BE AN ONLINE SCROOGE

Although most Christmas sales don’t start until Boxing Day, if you do your research you might be able to snag an early bargain! Use a simple Google search, or follow relevant social media accounts to hunt down those sneaky discounts.

3. SHOP LIKE SANTA

Take a leaf out of Santa’s book and be prepared. With a few smart rules, you can easily avoid spending too much money and wasting time.

Have your list at the ready
Set yourself a time limit
Stick to a budget
Limit your shopping locations to avoid confusion
Check online for a ‘Click & Collect’ option to avoid queues

We can help take the frenzy out of your festive season by providing you with a personalised budget to track your spending. We also offer personal loans to help consolidate your consumer debt into one easy repayment.

To get in touch today click here !

NEARLY HALF OF ALL HOMEOWNERS HAVE NEVER REFINANCED! ARE YOU ONE OF THEM?

Mon, 27 Nov 2017 22:05:00 GMT

A recent survey of Australian mortgage holders found 45 percent had never refinanced their home. This same report showed those who did refinance saved an average $240 per month ($2,880 per annum) by refinancing a 30-year loan.

Why consider refinancing?

The cash rate set by the Reserve Bank of Australia (RBA) is at an all-time historical low. Most lenders are offering the lowest home loan rates we’ve seen. When there are potential savings to be made, why do so many of us neglect to explore refinancing options? Apparently, we dislike talking about money!

A third of homeowners don’t know their home loan rate.

We must be clear. Any decision to refinance should not be based solely on securing a lower interest rate. At Future Finance Group, we consider your individual circumstances to determine if refinancing is suitable for your situation. Gone are the days of making minimum repayments at a similar interest rate over 25-30 years. We recommend that you review your home loan every two years. Times change, needs change, incomes change, expenses change and loan features change.

So, what are some of the reasons nearly half of us have never refinanced?

Research shows:

54% of borrowers claim to be happy with their lender

Which is valid but then most people only receive information from their lender. They can be unaware the market is now very competitive and other lenders or loans may provide greater benefits. It’s not just about rates either, with many loans offering features such as offset accounts and redraw facilities that could be right for you. Perhaps your loan includes a feature (with monthly fees) that you no longer use?

24% can’t be bothered with the paperwork

This is where your finance specialist comes to the fore as we do the work for you. The process is much easier than you think.

13% believe it’s too costly

Exit fees were banned for all loans which originated after 30 June 2011. If your loan was secured prior to this date, you will need to find out if an exit fee applies. Ask us! A new lender will often pay the exit fee for you when refinancing with them. Other fees may also apply and we will assess these to determine if refinancing delivers you an overall benefit.

9% think it is too hard to compare loans

Gathering an in-depth comparative analysis of a range of loans across multiple lenders is one of the key advantages of using a finance specialist. We aren’t tied to any particular lender. Your current lender will only look at alternate loans from their range of products.

Source and Links:

Refinancing report-Apr 16
Finder.com.au
RFi, Australian Mortgage Council

HOW MUCH CAN YOU REALLY AFFORD?

Sun, 15 Oct 2017 05:00:00 GMT

The choices you make when taking out a mortgage have long lasting implications – so you need to approach borrowing with a healthy attitude. When determining your borrowing capability, start by measuring your income against expenses, including potential mortgage repayments. While everyone’s circumstances and expenses are different, a good rule of thumb is that no more than 35 per cent of your gross monthly income should go towards servicing your mortgage. Lenders will also need to assess your circumstances to work out how much to lend you.

35 per cent of your monthly income should go towards servicing your mortgage

As a general rule, the bigger deposit you have and the higher your income, the more they should be willing to lend. All lenders will need to determine a loan suitable to your circumstances but mortgage managers can get to know your circumstances personally – and may have a little more flexibility than the banks to consider applicants on a case-by-case basis.

Here are some factors to take into account when determining how much you should borrow.

How much debt can I handle?

Don’t over commit. Borrowing too much can be a big strain on your personal life and lifestyle. Think about
what aspects of your lifestyle you may be willing to give up, and those that you can’t.

Am I being realistic?

Houses are like stepping stones – it’s probably best to start with something affordable and move towards your dream home as your personal earning capacity and equity grows.

What are my plans?

Think about what the future holds – both personally and financially. Are you a one or two income household and is this likely to change in the future?

What about interest rates?

Consider how any rate rise will impact on your ability to make repayments and factor that in when setting your borrowing limits. And don’t forget, there are added extras when purchasing a house, for example, stamp duty and mortgage duty, relevant property inspections, solicitors and application fees, as well as ongoing commitments including council rates, possible strata or body corporate costs and utility bills. Consider these costs when determining how much you can borrow.

Want to work out your borrowing capacity?

Simply click here and use our in-house Borrowing Power Calculator to determine how much you can borrow! Or email info@futurefinancegroup.com.au to organise an appointment with one of our incredible Broker’s.

WHAT IS LMI?

Fri, 15 Sep 2017 05:40:00 GMT

Lenders Mortgage Insurance (LMI) helps Australian homeowners enter the market earlier through allowing you to borrow a higher percentage of a property’s value. For first home buyers, particularly those struggling to save a deposit but more than comfortable to meet their mortgage repayments, it can be a key tool to break free of the rental trap. Through financing a higher proportion of a property’s purchase price lenders take on a higher level of risk in the event you fail to meet mortgage repayments, and the property needs to be repossessed and resold. LMI is therefore paid by you to insure your lender against loss should this happen.

If you default on your loan, Lenders Mortgage Insurance only covers the lender, not you.

It is important to be aware that LMI only covers the lender if you default on your loan payments and the lender is unable to secure the full outstanding debt still owing, when they sell your property. LMI does not provide you with any cover. The bigger the percentage of the property’s purchase price you have to borrow, the greater the amount you’re likely to pay on insurance. So if your deposit is less than 20 per cent of the value of the property, and especially if you have no deposit at all, you will need to factor LMI into your home loan. Remember that in some cases lenders may require LMI even if you have a lower deposit, depending on the type and style of property you’re purchasing – for example, some inner-city apartments or rural land. LMI is usually paid as a one-off lump sum at the time of settlement but in many cases it can also be added into the loan amount and paid off over the life of the loan – a term known as capitalising the LMI.

Speak with one of our broker’s to assess whether this option is right for you.

ONLINE SHOPPERS.. LISTEN UP!

Mon, 14 Aug 2017 03:45:00 GMT

Online Shopping has become a major phenomenon in our day and age. People are becoming more and more inclined to online shop rather in store, with one of the biggest reasons being the new online craze ‘After Pay’, ‘Zip-Pay’ & ‘Zip-Money’.. These are just to name a few. What people are un-aware of, is that though you are thinking it is an ‘Online Lay-By’ of some kind, it is in-fact considered a Liability when it comes to Residential Lending.

Lender’s are now catching on to these online wallet accounts and putting them down as a liability in the same category as a credit card! This being said, another thing people do not realise, is that every time you make a purchase through one of these online wallet accounts, it is putting a CREDIT ENQUIRY on your Credit Score Report. Making your Credit Score decrease rapidly with just one transaction. They don’t sound as promising now, do they?

What we are noticing with Lender’s, is that Credit Scoring is becoming one of the Major factors when it comes to residential lending. If you are worried about how this could effect you, give us a call today on (03) 8765 2335.

If you are looking at purchasing your first or new home and also have money owing on ANY of these online accounts, ensure that you let your Broker know and list them down as a liability.

Want to know more? Simply get in touch today and send us an enquiry by clicking here .

WHAT ARE INTEREST ONLY LOANS & WHY ARE THE BANK’S CRACKING DOWN ON THEM?

Mon, 24 Jul 2017 05:40:00 GMT

ING Direct has now joined the large and growing group of lenders tightening up their requirements for home buyers keen on an interest-only loan.

It has stopped interest-only repayments on new applications for owner-occupied fixed-rate loans.

And it is in good company, with major and minor banks making significant changes to their offering of this type of mortgage product.

Much of this is due to increased regulatory scrutiny during the past few months, with the banking regulator – the Australian Prudential Regulation Authority (APRA) – cracking down on this type of lending.

Since March, APRA has put a limit on interest-only lending to 30 per cent of total new residential mortgage lending, put restrictions on interest-only lending on loan to value ratios (LVRs) above 80 per cent, and asked for strong scrutiny of interest-only loans at an LVR above 90 per cent.

What’s an Interest Only loan?

An interest-only loan in the residential housing context is a type of mortgage where the home owner makes repayments on only the interestportion of the loan.

That is, they don’t pay down the “principal” component of the loan – the part that actually pays off what the asset is worth.

By comparison, in principal-and-interest loans the borrower repays both of these components. This is usually the more common type of loan, particularly among owner-occupiers, and it means that you are continually paying down the actual worth of the home.

Interest-only loans have typically been seen as more of an investment product, but this isn’t always the case.

Why would someone want an Interest Only loan?

An interest-only loan has much lower repayments than a standard loan, and this can be attractive for many reasons.

It doesn’t cost the property owner as much to pay their mortgage – making it easier to hold.

For investors, this means they might have a higher cash flow – or be less out of pocket. And for home owners, this can be a way to free up funds for other ventures.

The interest portion on an investment loan is often tax deductible while the principal portion is not.

Why is it considered risky?

When an interest-only loan is given to someone who would otherwise not be able to afford a loan, there is the risk that when the loan reverts to being principal and interest – typically after a stipulated number of years – they’ll be unable to afford the repayments.

HAPPY EASTER!

Thu, 24 Mar 2016 01:04:00 GMT

Wishing you a Happy Easter! May the Easter bunny bring you lots of chocolate and may it be a wonderful time spent with friends and family. Lots of love from the family at Future Finance Group.

FIND OUT MORE ABOUT OUR DIRECTOR, AMIE TENNANT

Tue, 08 Mar 2016 02:04:00 GMT

Amie Tennant has a passion for property. With endless award nominations such as Young Broker of the Year (2012 – 2015) and Individual Business of the Year , Amie’s customer service and work ethic is like none other. Amie loves helping clients realise their goal of purchasing their first home, next home or investment property and showing them how to save money in the process.

Amie’s experience includes over five years with Mortgage Express and My Mortgage Freedom, managing 10 office and employing 65 agents. During 2010-2011, she joined the Harcourt Real Estate team becoming the #1 Mortgage Consultant nationwide . She went on to achieve Platinum Achiever with Choice Aggregation Services in 2011, 2012 and 2013, 2014 & 2015. She has successfully settled over $200 million plus in mortgage settlements alone.

WHAT ARE THE BENEFITS OF USING A BROKER?

Fri, 04 Mar 2016 07:09:00 GMT

There are a number of benefits to using a mortgage broker. Here is a list below of just a few, but come in for a meeting or give us a call to find out how we can help you:

Saves you the legwork

Mortgage brokers shop around for you on your behalf. Having been in the industry for numerous years, Amie & the team have networks of people, some of whom you may not even know about. A broker has regular contact to numerous industry experts who have knowledge and offers not offered to the general public. The alternative to working with a broker is to call up dozens of lenders and compare their mortgage terms and rates. A mortgage broker will do this for you to save you the hassle and stress between all the terms and conditions. A broker can also steer you away from certain lenders with onerous payment terms buried in their contracts.

Brokers have more access

Some lenders work exclusively with reputable mortgage brokers and reply on them to be the gatekeepers to bring them suitable clients. Amie has fantastic relationships with all lenders to make sure your needs are directed to the best lender. Amie has access to more lenders than most, allowing you to be in safe and capable hands. Amie gets better rates from lenders to the volume of business generated.

Saves you paying some fees

There are several types of fees that accumulate when organising a home loan or new mortgage. Be careful you read all terms and conditions as well as the contract and small print. There are fees such as origination fees, application fees and appraisal fees. Due to Amie’s network and relationship with her mortgage lenders, some or all of these fees can be waived – resulting in saving you hundreds to thousands of dollars.

Knowledge and one-stop-shop experience

A mortgage broker is there to help. We can make sure we give you all the right advice, point you in the right direction and answer all the questions you may need. Amie & the team have been in the industry for over 10 years and are up to speed with all the latest regulations, fees, contracts and more. Our team work together with you to make sure you get the best result.

WHAT IS A MORTGAGE BROKER?

Tue, 01 Mar 2016 11:44:00 GMT

A mortgage broker acts as an intermediary who brokers mortgage loans on behalf of individuals or businesses. They go between the borrower and the lender (usually a bank) and negotiate on your behalf so it’s hassle and stress free.

Traditionally, banks and other lending institutions have sold their own products. However, as markets for mortgages have become more competitive, the role of the mortgage broker has become more popular. Today in most developed mortgage markets (especially in Australia, Canada, the U.S., the UK, and New Zealand), mortgage brokers are the largest sellers of mortgage products for lenders.

Mortgage brokers exist to find a bank or a direct lender that an individual seeks with a specific loan the individual is seeking.

The majority of mortgage brokers are regulated to ensure compliance with banking and or finance laws in the jurisdiction of the consumer; however, the extent of the regulation depends on the jurisdiction.

THE LAUNCH OF OUR BRAND NEW WEBSITE

Wed, 11 Nov 2015 18:34:00 GMT

Welcome to our brand new website filled with helpful advice, services, calculators and more. This blog will be updated once a week with informative articles to help you get more for your money. We are always here to help, so please get in contact if you have any questions – we would love to hear from you.

Now time for you to have a sneak peek around the site…go on, I know you want to! Amie x