Blog

What is an offset account? There’s been a lot of discussion lately around offset accounts and how they can shorten the length of your home loan and even reduce your repayments.   How does this work?   An offset account is a transaction account that is attached to your home loan.   You can use it the same way you would use your everyday banking account, as you’ll receive a debit card and your salary can be deposited directly into it.   So what’s so special about it?   Offset accounts can dramatically change the amount of interest you are paying on your home loan. Everyday, the amount you have in your offset account will be compared to the balance of your mortgage and this will determine how much of your loan you’ll pay interest on.   For example, if you have a $300,000 home loan and $10,000 in your offset account, you’ll only be charged interest on $290,000.   Tell me more…   Becau...
Read More

The Pros and Cons of Buying New or Existing Property I’m often asked whether it’s better to purchase an established property or something new.   Just like the smell of a freshly purchased car, some people really vibe on having a brand new house that no-one’s ever lived in before. It’s free of defects and nothing needs to be repaired.   While they’re often built in up-and-coming areas with brand new parks and facilities nearby, new developments tend to lay on the outskirts of cities, with limited access to public transport.   Existing homes on the other hand tend to be in established suburbs that are close to amenities such as hospitals, schools and transport. They might need a lick of paint or even a full face-lift but the cost of those repairs are minimal compared to the overall value of the house.   Stamp duty exemptions are also something to consider.   If you’re looking at buying property and wondering if you are eligibl...
Read More

How Much Money Will The Banks Lend You? When you finally reach the approval stage of your home loan application, you will be told what your borrowing capacity is. This is the maximum amount of money a bank will lend you.   To work out your borrowing capacity, lenders will look at three key areas. Here’s a brief rundown on each:   1. INCOME How much money the home loan applicants earn on a regular basis is the most important factor. If you’re in a PAYG role then you’ll need to have been in it for at least six months. If you’re self employed, there’s a few extra steps you’ll need to take to verify your earnings.   2. REGULAR DEBTS Everyone has different living expenses and demands. Cutting out home delivery meals, take-away coffees and expensive haircuts is a good idea in the lead up to your loan application. With fewer expenses, lenders will have greater confidence that you can cover your repayments.   If you have an...
Read More

Is it smarter to invest in property than buy my first home? If you’re young and considering buying your first home, it pays to know about the other often-overlooked option for those just beginning their property journey.   Choosing to invest in property while you’re still young means you’ll get all the benefits of owning while still having the flexibility of being able to rent in a hot suburb.   The best part is that investment loans give you a larger borrowing capacity because your salary and any potential income from renting your investment property out are both taken into account.   What’s in it for me?   Your tenants pay for your asset while you rent, so you’ll still have extra funds to do what you love.   There’s a lot to consider when it comes to investing. I can put all your options on the table and help you work out if it’s the right choice for you.   Let’s chat! My Very Best To You Always, ...
Read More

LVR - What is it and what does it mean for you? Loan to Value Ratio (LVR) is a complicated term that even financial institutions can have trouble simplifying.   At its core, it is a measure of how much of your property’s value you do not have debt against.   It is a calculation of your loan balance divided by the assessed value of your property. For example, a 75% LVR would be a $750,000 loan balance against a property value of $1,000,000.   If you’re looking to purchase a property it’s critical to know all the costs involved. This will give you a true indication of your loan size and how much your LVR will fluctuate as you look at different properties valued at different prices.   Many banks offer loan discounts and other savings if you have an LVR below 80%.   Still don’t understand?   Don’t worry, you can call me anytime and I will break it down for you. My Very Best To You Always,  
Read More

Could You Be Eligible For a Home Loan Discount? Who doesn’t love a good discount?   You might be surprised to learn that lenders are pretty happy to offer lower interest rates to the right customers.   If you: Have a low Loan-to-Value ratio (LVR) Want to upgrade the size of your loan or; Are looking for a loan for an owner-occupied purchase It could be you!   To see if you’re eligible for some of these savings let's talk! My Very Best To You Always,  
Read More

Tips For Finding That Perfect High Yield Property 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.   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! Look for dual income properties such as a house with a granny flat. You can potentially have two streams of rent coming i...
Read More

Fixed or Variable Rates? Do you know the difference between a fixed and variable rate?   If you don’t have a background in finance, it can be difficult to understand how they work.   Here’s a quick breakdown;   Variable Rates (Move Up and Down)   A variable interest rate will move up and down as lenders react to decisions made by the RBA and the marketplace. Variable interest rates do not have a fixed term but some can have discounted interest rates over a period of time. These are known as Introductory Rates or Honeymoon Rates.   Variable rate loans can be quicker to pay off as they allow more flexibility on your repayments.   Fixed Rates (Stay the Same)   A fixed rate loan will stay at the same rate regardless of anything that happens in the market or with the RBA. This means your repayments will be regular and you’ll always know how much money will be withdrawn from your account. This makes budgeting ...
Read More

Which cash flow strategy works best for investors? Before you invest in property you need to decide on a cash flow strategy. There are two main options to choose from and they both offer different tax benefits.   Positive Cash Flow Strategy   If you are making a profit from a rental income this is known as positive cash flow. This is a popular choice when interest and vacancy rates are low because you can capitalise on loan-to-value ratios (LVR) and reduced repayments. You can claim on depreciation and take advantage of special loan features such as offset accounts.   Negative Cash Flow Strategy   If your rental income is less than the expenses your property generates, never fear. This is a strategy some people use to reduce their taxes and make more money in the long term. It’s a great option if you have a reliable salary as you can offset any losses against your income.   Negative gearing can be complicated so I def...
Read More

What is a Redraw Facility on a Home Loan? One of the great features of a home loan is the ability to redraw any of the money you’ve made in extra payments on your mortgage.   It’s a handy service for those needing access to a lump sum of cash and is often used for household renovations or unexpected expenses.   The biggest drawcard is that the compound interest you are making on your mortgage payments is most likely more than you’d get from a savings account. Savvy borrowers know this means more bang for their buck and that if they exercise restraint they can save thousands of dollars over the life of their loan.   The only drawback?   Depending on your lender, you may have different fees and restrictions on your withdrawals. It always pays to speak to a broker, who can advise you on which loans will work for you, if you are factoring redraw into your home loan plan.   I am happy to chat with you about these facilities ...
Read More