Personal Finance

30. home loans 101

Home Loans 101

There are a range of home loans available in Australia, so it can be hard to understand their features and whether they are right for you. This guide explains all you need to know. Variable loans Variable loans are loans that are subject to interest rate fluctuations. Whenever your bank increases or decreases interest rates, you will end up either paying more or less for your loan, depending on what the bank has decided to do. A typical owner-occupied mortgage is taken out over 25 or 30 years, although you can reduce the overall term by making higher or more frequent payments. Mortgages are either based on principal (the amount you borrowed from the bank) and interest (the amount you pay back for having
29 smart tips for paying off your home loan sooner

Smart tips for paying off your home loan sooner

Wondering how to pay off your home loan sooner? We look at some things you could do. Australian home loan interest rates remain at historic lows, and the opportunities for paying off a mortgage early are better than ever. Used in conjunction with low rates, here are some extra steps that can speed up loan repayments and reduce your loan balance. Make higher repayments One of the easiest ways to quickly reduce the balance of your mortgage is to make larger loan repayments. The minimum repayments required on a loan are calculated on the amount owing and the prevailing home loan interest rate. Repaying more than the minimum can cut the overall term of the loan and save you thousands of dollars in interest.
28. borrowing money for renovations

Borrowing money for renovations: What you need to know.

You’ve been dreaming of that new kitchen and dining room for as long as you can remember, and now the time has come to put your plans in motion. But do you really have the budget to afford the works? Here are a few things to think about before making the leap from Pinterest board to blueprints. Work out your budget Before you look at borrowing any money, you first need to work out how much your renovation will cost. Get Ask An Architect to send you their comprehensive guide to costing a renovation. Before you finalise your plans, you can arrange for a building inspector to help identify any structural work that might be needed. Major work could significantly increase your budget, so
27. overcapitalising

Overcapitalising: What it is and how to avoid it

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

Buying to rent on Airbnb : Pros and Cons

There’s no denying that websites like Airbnb and Stayz have turned the holiday accommodation industry on its head. Anyone with a property, or even just a room to spare, can potentially make some handy cash from this new segment of the travel market. If you’re thinking of buying an investment property with the express purpose of listing it as a short-term rental, here are some things to keep in mind. Ask first, rent later Before you buy an investment property and sign on with a third party like Airbnb, make sure your planned short-term rentals will be legal. Check that your listing doesn’t breach any home owners’ association or body corporate rules and that you’re complying with applicable zoning laws. The laws around hosting paying guests vary greatly
25. understanding which home loan features are right for you

Understanding which home loan features are right for you

Loans are by no means ‘one size fits all.’  Different loan types suit different age groups, different living situations and even different attitudes to money. A common trap some home-owners fall into is to consider a mortgage ‘set and forget’. You did your research, shopped around, found the right option and now you’re reluctant to revisit the process – even if your personal circumstances have dramatically changed. Before you start shopping around for a new loan, or an upgrade to your old loan, it’s worth knowing a little bit about the options available. The three most common differentiators are variable rates, fixed rates and combo rate loans: A variable rate loan offers greater flexibility than a fixed rate loan and will appeal to you
24. three questoins to ask before you refinance

Three questions to ask before you refinance

The home loan market is constantly changing, with new and attractive deals coming up all the time. Refinancing can help you secure a more competitive interest rate, access the equity in your home, add features (such as an offset account) or consolidate your debts, but there are some important questions to consider before you get the ball rolling.   1. Has my financial situation changed since I first applied for a home loan? A refinance is effectively a brand new loan application. All of the personal financial data you had to gather the first time around will need to be produced again. The stability of your income stream, your assets, and your credit card debts and other debts and expenses will all be reviewed,
21. how to get the most out of refinancing

How to get the most out of refinancing

Everyone wants to pay less on their mortgage, and refinancing is one strategy to help lower your interest rates – but is it worth it? We take a look at how you can get the most out of refinancing. Why refinance? Generally, people refinance to negotiate a better deal on their home loan and pay it off sooner. Depending on your situation, you should be able to save money by taking advantage of lower interest rates, or new products that weren’t available when you first negotiated your home loan. To help put it in perspective, let’s say you previously took out a $300,000 loan at 7.5% over 30 years with monthly repayments of $2,098. If you refinanced to a new loan at 4%, you
19. how an offset account could cut years off your home loan

How an offset account could cut years off your home loan

Looking for ways to pay off your mortgage in record time? Whether you’re a seasoned investor or buying your first home, an offset loan can help you reduce interest payments, save on tax and pay your mortgage off years ahead of schedule. What is an offset loan? With an offset loan (also called an offset account, interest offset account, mortgage offset account or offset home loan) the borrower takes out a home loan and opens a linked savings or transaction account. The balance in the savings account is then ‘offset’ daily against the home loan. How an offset loan works With an offset loan, instead of receiving interest on your savings account each month, the account balance is offset against your home loan, reducing the amount
17. buying property with other people

Buying property with other people: Mine, yours or ours?

When people buy property together, particularly if it’s with a partner or spouse, they often register the title in both people’s names – especially if they’re going to live in the property. But other arrangements are possible, several friends might opt to own individual shares in a property, for example, or a couple might choose to have only one of their names on an investment property title. The following information provides you with a good starting point to help you on your way.  Also tax legislation and other Australian laws governing property ownership and investment are complex, so seek proper legal and financial advice before entering into any arrangement. Joint-ownership titles The two main types of joint-ownership titles in Australia are joint tenancy and
18. finding a home loan when youre self employed

Finding a home loan when you’re self-employed

There are many perks to working for yourself, but when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders. Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contractor, entrepreneur, tradesperson or freelancer. Yet by being proactive and accessing specialist advice, self-employed applicants can also enjoy a successful and hassle-free road to securing a home loan. Try these top tips for starters.  1. Seek expert advice Trying to navigate the home loan landscape solo may not produce the outcome you desire. There are many experts who can help self-employed people access a home loan,
8. broker info-min

Why does my broker ask for so much documentation?

No one likes paperwork; however, providing your broker with the right documentation will save you time and money. What information will your broker ask you to provide? When you ask to enlist the services of a broker, they will probably ask you for the following documentation: Identification, including photo ID such as driver licence Income verification documentation such as recent payslips Birth certificate, if you are applying for a government funded first home owner grant Depending on the lender or bank you would like your broker to apply to for your loan, you may also be asked to provide: A recent PAYG summary A notice of assessment from the Australian Taxation Office Tax returns Proof of your contribution toward the transaction, such as savings

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