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Conversations with a Pug – Why do banks and agents value your home differently?

Posted on February 23, 2022November 27, 2021 by Frank Barragan

Why do banks and agents value your home differently? Have you ever wondered why your lender will give you one value for a house while the real estate agent has said something completely different? How do you know the real value of a property when everyone is giving different quotes? The difference in the two valuations is due to the lender and the agent assessing different aspects of the property’s value – the lender is looking at how much to comfortably lend you in relation to the cost of the property, while the agent is looking for a sale price. Bank valuations vs market valuation The property’s market value is the estimated amount for which the property should fetch on the date of valuation, assuming a buyer and seller were to enter willingly into a sales transaction. The bank valuation is the amount that the lender is prepared to lend against the property. How is the bank v...
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Conversations with a Pug – Quick tips for working out a property’s market value

Posted on February 22, 2022November 27, 2021 by Frank Barragan

Quick tips for working out a property’s market value When you are searching for the perfect property, it can be challenging to work out exactly how much you should be paying. Rather than relying completely on the word of others, you can develop your own strategy for valuing a property, so you have a better independent idea of how much it is really worth. 1. Make a comparison search Property sales are in the public domain, so you can research your chosen area and make a list of five comparable properties that have sold within the last six months. To ensure the properties are comparable, make sure they are within a kilometre of your target property, and that they have similar features, such as the same number of bedrooms, bathrooms and car spaces, and a similar land size. Also make a note if any property has additional features such as a pool, or whether it is ...
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Conversations with a Pug – How to maintain a good credit score

Posted on February 21, 2022November 27, 2021 by Frank Barragan

How to maintain a good credit score When you are applying for a loan, the first thing lenders will do is check your credit score – and this will have a strong impact on their ultimate decision. So what is your credit score and how do you maintain a good score that will impress lenders? The five elements of your credit score Your credit score is a three digit number designed to indicate how likely you are to meet your credit obligations. Lenders will look at your score to decide whether they are prepared to give you credit for a loan. The score is calculated based on five elements of credit history information – your payment history, your level of debt, your credit age, your mix of credit and enquiries. You could look at your credit score like a school grade, where different subjects have different weighting on your overall mark. Pay your bills promptly Payment history makes up 35% of your “grade.” Th...
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Conversations with a Pug – Sell or buy first? Which option is right for you?

Posted on February 20, 2022November 27, 2021 by Frank Barragan

Sell or buy first? Which option is right for you? It’s the ultimate dilemma for any home owner planning to move on to a new property – do I sell or buy first? You don’t want to sell unless you have somewhere else to live, but you don’t want to buy unless you have the money from the original home. Whichever way you go, there will be some stress involved, so it’s important to look at the pros and cons of each option to decide which is the most suitable and practical for your circumstances. Questions to consider Your decision should be based on your current equity situation and how fast you can sell your current home. In a “hot” market, a “hot” property is sure to sell fast – but don’t assume that your property will attract an immediate buyer. Do your research so you have a realistic idea of the potential selling time. The other factor to consider is how long it will take you to find your next home. You d...
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Conversations with a Pug – Top Six Reasons why your home loan might be declined

Posted on February 19, 2022November 27, 2021 by Frank Barragan

Top Six Reasons why your home loan might be declined You’re ready to buy a home, but you can’t find a lender who will approve your home loan. While this might seem discouraging and frustrating, it is not necessarily the end of your dream to become a home owner. Once you know the reason that you are considered a bad risk, you can improve your eligibility. Usually, it just takes a little more time and to improve your eligibility. Here are the top six reasons lenders might decline your loan application: 1. Low deposit If you can only place a small down payment on the property of your dreams, the lender might conclude that you are not financially prepared to take on the long term responsibility of a home loan. The lower the deposit, the more you need to borrow, creating a higher risk for the lender. A larger deposit not only lowers your repayments, it also demonstrates your long-term financial commitment....
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Conversations with a Pug – How to narrow down what you want in a home

Posted on February 18, 2022November 27, 2021 by Frank Barragan

How to narrow down what you want in a home Before you can find the perfect home, you need to know exactly what you are looking for – and as you may come across desirable homes that include only a few of the features on your list, you need to know which features are the most important to you. As a further complication, you will generally be working on this list with your spouse or partner, who may have different priorities to you! So how do you work out what you are looking for in a home? Identify the “needs” and the “wants” Write your list of desirable features while your partner does the same. Hopefully, your lists will tally fairly closely! Now divide the list into two separate columns – “needs” and “wants.” The “needs” list could include anything from “must be walking distance to school” to “must be accessible for wheelchair.” The minimum number of bedrooms may be non-negotiable, although you may ...
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Conversations with a Pug – How to choose the right property for you

Posted on February 17, 2022November 27, 2021 by Frank Barragan

How to choose the right property for you Your home is perhaps the biggest investment of your life – particularly as it is not just a financial investment, you are also investing in your future lifestyle. Yet many people have a tendency to “fall in love” with a particular property, and they forget to remain logical in their thinking. As a result, they find themselves owning a property that does not suit their current lifestyle or their future financial plans. So how do you choose the right property for you? Find a property that fits your real-life needs, not your dream lifestyle You might have fantasies of living by the beach or in a small inner-city unit within walking distance of all the pubs and cafes, but how will this choice fit your budget and your long-term lifestyle? Your first home should fall within your budget and it should be compatible with your work and family life. There is no point purchasing a dream property that require...
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Conversations with a Pug – Comparing commercial and residential property investment

Posted on February 16, 2022November 27, 2021 by Frank Barragan

Comparing commercial and residential property investment If you are looking for a sound real estate investment, look beyond the typical two bedroom apartment and consider expanding your portfolio with a commercial property. There are three types of commercial property – office, retail and industrial. There are some significant differences between investing in commercial and residential real estate, each with a potential positive or negative impact on your investment. Investment returns Commercial property is also much more expensive to buy than residential property, and the risk is also considered higher because if its vulnerability to market conditions. Banks will require a larger minimum deposit, usually around 30%, and the interest rates will be higher than a residential property. While the average rental return for residential properties in Australian capital cities is 3.6%, a commercial gross ren...
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Conversations with a Pug – How to calculate your borrowing power

Posted on February 15, 2022November 27, 2021 by Frank Barragan

How to calculate your borrowing power One of the most important factors in your home ownership journey is the amount of money you can – or should borrow. You want to borrow enough that you can purchase the right property for your needs, yet you don’t want to end up out of your depth in debt. Most lenders rely on their own variation of a basic formula to calculate your borrowing power. They look at six elements of your financial situation – gross income, tax, existing commitments, new commitments, living expenses and buffer – to calculate your monthly surplus. This formula gives a good overview of your level of financial security, and tells lenders how much you are able to pay back each month. If you assess yourself based on a similar formula, you can have a realistic idea of how much you can borrow and whether you need to save and prepare a little more first. So how do all these elements combine to asses...
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Conversations with a Pug – 5 Ways To Tell If You Found The Right House

Posted on February 14, 2022November 27, 2021 by Frank Barragan

5 Ways To Tell If You Found The Right House You’ve seen a lot of homes lately. You have been out every weekend searching for the right home for you. At this point, you might not be sure it’s even out there, or if it is, you might not find it. Then you drive up to a home that gives you hope. At this point, however, how can you tell if it is the right house for you? Here are 5 sure signs that you’ve found the right house: 1. You feel excited. Just as your first love might have given you knots in your stomach, the right home could as well. You start to imagine a life in the home and it’s exciting. 2. You overlook the flaws. You are realistically seeing the negative aspects of the home and are willing to overlook them. Maybe you wanted a view and this home doesn’t have one. But the beautiful kitchen remodel and spacious landscaped yard make up for that. 3. It doesn’t have your deal breakers. You should never compromise on the real deal b...
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