Author: Frank Barragan

  What's A Better Strategy To Access Equity: Take Out A Line Of Credit Or Just Top Up A Loan? Lines of credit can be very useful; however, you need to be careful regarding an evergreen set-up in which no repayments are needed and the interest is added on to the loan. Years ago that was a sound strategy for increasing your tax deductible debt. This has been a very contentious subject with the ATO (and many court rulings), and my advice would be to stay away from such a strategy or ensure you seek expert advice from a tax expert that may require a private ruling to ensure you stay on the right side if you are seeking to capitalise the interest. If you are looking to access equity from your home, it is never a good idea to top up the loan for investment purposes. The reason is that you are mixing together investment debt with personal debt. As an example, if you had an $8...
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      Which is the right home loan for you? There are a bewildering variety of home loans available, and it can be confusing to figure out which type of home loan is the best for your circumstances. However, when you know the pros and cons of each type of loan, you can make a decision that will fit best with your financial situation. Fixed rate home loan A fixed home loan offers an interest rate that is fixed for a set period of time – usually 1, 3 or 5 or 10 years. The key benefit is the ability to budget, knowing exactly how much your repayments will cost each time. However, a fixed loan doesn’t have the same flexibility as other loans – you will encounter restrictions if you want to make additional repayments, such as fees or capping to a low amount. You might also be disappointed if interest rates drop dramatically and you are still paying the same fixed rate. This is a good option if you want ...
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      How To Make An Offer In Writing To Buy A Property Here is an email template you can use to make an offer on a property you are interested in buying. ======EMAIL OFFER TEMPLATE====== To whom it may concern, I would like to make an offer on _______St ______ for $…………………………….. My preferred settlement time would be ……………… Weeks. This offer is subject to finance approval, my solicitor reviewing the contract and any Strata reports and or building and pest inspections I may carry out. ======= EMAIL OFFER TEMPLATE====== Best of luck... and if you need any ideas on finance, 2nd opinion or a pre-approval to go shopping... reach out and let's chat. My Very Best To You Always,  
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        Top tips for young property investors It is possible for people to launch into the property investment market in their early twenties – in fact, this is a great time to start, when you are first launching into your career and don’t yet have any other financial responsibilities such as a family to support. However, buying an investment property can never be an impulse decision – it takes self-discipline and applied knowledge to start building a profitable investment property portfolio. Set a budget and save The first step of course is to start saving for your first deposit, which is usually at least 20% of the purchase price (can be lower, check with your broker). You will need to be focused and realistic, and quite single minded in order to save a sufficient amount. Your best option is to set a budget and create a clear financial plan that will help you remain focused and prepared once you do ...
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Why you need a property inspection Whether you are purchasing a new home or an investment property, you are about to embark on one of the most important financial investments of your life. So it is essential to ensure that you are getting a fair deal. Yet, while buyers can be scrupulous about checking contracts and researching market prices, a surprising number of people tend to skip the property inspection. This means that you are taking ownership of any issues that could diminish the value of the house, even if the property looks perfect on the surface. Here are five good reasons why you should invest in a property inspection before your purchase: 1. Detect Safety issues Not all hazards are easy to see at first glance. Asbestos, mould or carbon monoxide are only some of the hidden threats that could be lurking in your new home. Identify them now and you could save yourself some costly damage control. 2. Identify Illegal Insta...
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        Understanding the buying and loan process Purchasing a new home or an investment property can be a daunting prospect, and you might find it difficult to identify the first logical step. Here we look at the process of securing a loan so you can buy the property that suits your needs and your budget. Ask yourself what you want to achieve The first step is to establish exactly what you are looking for. Do you want an investment property or a family home? If you are looking for an investment property, are you looking for a property you can fix up and “flip” or do you want something that is a low risk, long term prospect? Is your family home intended to be a starter home, or are you planning to live there for several decades? Talk to your broker about your financial situation, so you can establish how much money you can borrow, and which loan is right for your needs. Ascertain which lender and loan is right for ...
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      What Is An Equity Line Of Credit? These loans are a great way to access the equity in your home to use for things like home renovations, investments or other personal purchases. Repayments on a line of credit loan are determined by the interest rate applicable at that time. If you have sufficient equity in your home, you will need to make a separate application for a line of credit loan. You have the added advantage of being able to make unlimited deposits / repayments as you repayments are not set. You must check the conditions of these loans as they are sometimes more expensive than standard products. A line of credit is also a popular product with property investors as it gives them instant access for a cash deposit, and the ability to keep their properties separate from each other i.e. not cross secured. Think of it like a gigantic credit card with a limit. So planning and caution is strongly advised. ...
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      How to ensure your renovation will increase your house value There are two main benefits to renovating your property – firstly, you can make it more comfortable and compatible for your lifestyle; and secondly, you can increase the value of your home. The challenge is to find the right balance between these two benefits – if you invest too much into renovations, you risk reducing the amount of profit you would make when you sell. So how do you strike the balance and turn your renovation into profit? The 10% rule One handy rule of thumb is to ensure your renovation doesn’t cost more than 10% of the property’s value. If you are planning an extensive renovation, do your research to make sure you are not over-capitalizing. If you are building a substantial extension on a family home, for example, you should regain the value through creating a home that suits your family’s needs for a considerable period of t...
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What happens when your fixed rate expires? Do you know when your fixed rate term is coming to an end? Once it finishes, the bank is free to quietly switch you to a higher interest rate – unless you act fast! Think of how costly it could be if you simply let the bank choose your interest rate. If your bank charges you just 0.5% more than the competitive interest rates, this adds up to a significant amount over the term of your loan. You can save yourself a great deal of money and perhaps even cut years of your loan, if you are proactive about monitoring your interest rates and choosing the right option for you. Switching to a variable rate A variable rate can be a great option if you want to take advantage of low interest rates, or if you want the flexibility to redraw or make extra payments. When your fixed rate term expires, the bank will automatically switch your loan to the Bank Standard Variable Rate (BSVR). Do some research to find out wh...
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      What is a repayment holiday? Exactly that... a period of time where you don't make any repayments on your home loan. Usually it's a time when your financial situation changes... for example maternity leave, and therefore there is a period of reduced income. Of course there can be other reasons too.. such as redundancies, illness etc... In any of those cases... rather than falling behind on your repayments, it's critical that you speak with your bank or broker to get some early advice to make sure you work with your lender to find an appropriate solution. If you need any information around taking a break from your home loan repayments, reach out and let's talk. My Very Best To You Always,  
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