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Top 10 Home Security Tips

Home burglaries are a fact of life but seem to be on the rise in the last 12 months.

 

The good news is that there are plenty of simple, low-cost steps you can take to greatly reduce your chance of getting burgled. Remember, it’s all about making your home a harder target to break into than other people’s.

 

  1. Door locks

 

Have key-operated two-cylinder deadlocks fitted to all external hinged doors. A quality knob-inlock set will have a ‘dead latch’ mechanism to stop burglars using a credit card to open it.

 

2.Sliding doors

 

A favorite point of entry for burglars! Fit key operated locks or patio bolts to all external sliding doors, such as patio/veranda doors.

Sliding doors can also be made more secure by inserting a wood or metal dowel into the track to limit movement.

 

  1. Windows

 

An open window, visible from the street, may be the only reason that your home is chosen by a burglar. Ground floor windows are more susceptible for obvious reasons.

Make sure you have a security grill, security screen or burglar bars applied to all accessible windows, or alternatively have key-operated single cylinder window locks fitted.

 

  1. Warning stickers

 

Place highly visible stickers on or near front doors and windows, which indicate an alarm system, dog or membership of neighborhood watch. Your local police station should have an anti-crime adviser who can help provide these.

 

  1. Light timers

 

Install light timers to switch on automatically if you aren’t home when it gets dark, or have gone away for a few days. The timers should mimic when you would usually switch lights on or off. They are not expensive and are available at most hardware stores.

 

  1. Exterior lighting

 

Exterior lighting is also a good deterrent, provided it is switched on and off as though someone is at home. Make sure the approach to your house, especially any entryway, is brightly lit, controlled by a light timer if necessary.

 

  1. Motion sensor lights

 

These are useful to install, especially at the back of a house or apartment. Infra-red motion sensor lights are also easily available and not very expensive. An unexpected light going on is a definite deterrent to a burglar who will wonder what other security devices you have in place.

 

  1. Alarm systems

 

Burglar alarms definitely increase the potential and fear of being caught by the police.

 

  1. Home safes

Burglars know all the hiden holes to look for keys, valuables and important documents. The price of a good home safe is falling, so setting one up could be a good investment. Home safes need to be anchored into the floor or permanent shelving, and should not be kept in the master bedroom or cupboard.

 

  1. Protect your ID

 

It’s a good idea to take photographs around your house of all your valuables – important proof for an insurance claim if you ever need to make one.

Receipts for bigger ticket items are also useful to keep for the same reason.

Consider taking photocopies of your passport, driver’s license and all the cards in your wallet and store these in a safe place.

 

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The heat is on: Brisbane’s property market is set to fire up

Should you invest in Brisbane’s property market? We say yes–and here’s why.

All the signs are that Brisbane’s property market is experiencing a high growth phase, with currently low median house prices representing fantastic opportunities to take advantage of capital growth potential.

Thanks to strong economic fundamentals, substantial investment in infrastructure development, population increases and affordable house prices, Brisbane’s housing market has been experiencing a growth trajectory which has outperformed the rest of the country’s property markets. With many factors driving demand, the market is anticipated to grow at 3-5% in the next 12 months.

The Brisbane property market has been demonstrating solid performance in contrast to the national context of fewer listings, dropping values and a general market slowdown. Brisbane’s resilience is being attributed to a robust state economy fuelled by an infrastructure boom creating jobs, as well as consistent population growth.

The state’s population growth has been stimulated by strong interstate migration (up 50.5% since 2018) together with 12.7% of all overseas migrants settling in the sunshine state. These interstate and international migrants have been attracted to invest in property in Queensland, and Brisbane in particular, thanks to lifestyle factors and the greater affordability of property in the state when compared to its Eastern competitors.

Tom Uhlich at Boss Money says:

“Not only are there lower median house prices in Brisbane than Sydney and Melbourne, but rental yields are higher as well, making it an especially attractive proposition to investors.”

In terms of capital growth, economic experts are predicting that Brisbane property prices could experience double-digit growth over next few years. Forecasting by BIS Oxford for the next three years show that the Brisbane market will see the greatest growth compared to all national property markets, with median prices expected to see a 13% increase, to $620,000.

In keeping with standard property market behaviour, of course, there is variance across sub-sectors and certain properties in certain locations are performing better than others. With property inevitably being a heterogenous, highly fragmented market, some city locations demonstrate better growth potential than others. Which sub-sectors of the market represent a better investment than others depends on factors such as geographic location, price and property type. For example, CoreLogic data for 2018 shows that apartment prices decreased by 0.5% but at the same time, house prices went up by 0.1%.

Says Tom Uhlich:

“Drill down into the figures and you find that the best performers are freestanding houses and townhouses in premium locations, such as near the CBD, by the river in the inner ring or near school catchment zones. These properties experienced much stronger growth in value, with some of these properties having double-digit growth.”

Overall, at least 68 Brisbane suburbs demonstrated greater growth than the national average. Further data from CoreLogic indicates that over the next two years Brisbane can expect to see one in 10 houses sold for more than $1 million.

So where are the most promising capital growth opportunities in Brisbane? According to Tom Uhlich:

“Looking at the longer term, we predict the best opportunities for investors are likely to be found in the inner and middle sectors of Brisbane’s suburbs such as Cannon Hill, Kedron, Tarragindi. Keperra and Ashgrove

Based on our analyses, it’s clear that Brisbane’s property market is due for a high growth phase, meaning Brisbane currently offers great opportunities for long term investment. But making a well-informed investment decision depends on being armed with all the facts to enable you to find the perfect property to invest in. We can help steer you in the best direction, so give us a call, sms or email here at Boss Money today.

0476 111 000

tom@bossmoney.com.au

www.bossmoney.com.au

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Are fixed loans really a safety net or will it become a hostage situation?

Are fixed loans really a safety net or do they take you hostage?

Do you buy your movie tickets before you leave the house? Do you like to book a table at a restaurant to make sure you don’t miss out?

There is a certain comfort in knowing what’s going to happen, especially when it comes to planning your financial future.

If you worry about the ups and downs of the official Reserve Bank rate, and the possibility of your home loan repayments increasing without warning, a fixed rate loan could be your new best friend.

Fixed interest rates are a kind of insurance policy that protects you against the financial pressure caused by interest rate movements. Depending on your personal situation, you might struggle to meet your repayments if interest rates were to rapidly increase. If you opt for a variable interest rate, you have no control over fluctuations in the market.

Ideally, you should have allowed for a few rate rises when deciding how much to borrow. But if you stretched your limit in order to buy your dream property, then fixing your interest rate is a great safety net.

Fixed rate loans allow you to be sure about your exact repayment figures for a fixed period of time. This is great for borrowers on a tight budget – because you never have to worry about interest rate fluctuations during the fixed period.

The purpose of a fixed rate loan is not to save you money on interest. Generally, these loans will cost you more in interest. Fixed rates are usually higher than variable rates, so the only way this approach will save you money is if there is a rapid fluctuation in interest rates, and the standard variable rate climbs significantly above your fixed rate.

A fixed rate could cost you money if interest rates fall. You will be locked into a higher rate when other people are enjoying a reprieve. You need to decide if you’re happy to take this chance and fix your rate for a period of time.

The biggest risk of going fixed is the penalties that you will incur if you need to get out of the loan. Many lenders charge enormous break fees for borrowers leaving during the fixed interest rate period. It’s also very difficult to change your loan during the fixed period, and generally, you can’t make any lump sum repayments.

If you have a variable rate loan, it’s a great idea to regularly review your needs every few months. You might decide that the time is right to fix your rate, depending on your circumstances, and the fixed interest rates on offer.

Beware of sitting on the fence. Many lenders promote the concept of 50/50 fixed and variable rate loans. Some borrowers see this as a no-risk alternative to choosing either fixed or variable rates. Keep in mind – if you choose to fix part of your loan and leave the other part variable, you will still be locked in because of the fixed portion of the loan.

If you want to see if a fixed rate suits your goals, contact Boss Money today.

m 0476111000
e tom@bossmoney.com.au
a 130  Vulture Street South Brisbane
www.bossmoney.com.au

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Top 5 quirky finance tips to get ahead

  1. Have a no-spend day

Sometimes spending can turn into a mindless habit. The more you do it, the easier it becomes.

For just one day this month, commit to having a no-spend day. You could save anywhere from a couple of bucks to a lot more, depending on how much you typically spend. This is a good way to hit the reset button and re-evaluate your spending habits.

2. Use cash in certain budget categories

We all have those spending categories that we just can’t seem to tame. To help limit your spending, pay cash for those categories.

Take one part of your budget and pay only in cash. I chose coffee and lunch — I take out $30 each week, and when it’s gone, it’s gone.

3. Create targeted savings accounts

Improve your finances by creating more than one savings account. Having all your savings lumped together can make it tough to be clear on your goals.

Create an emergency fund,  holiday fund, a Fitness fund, whether its cycling or triathlon or CrossFit and by sign up for automatic transfers to each savings account.

 

4. Unsubscribe from sales emails

The temptation to spend is everywhere, but the hottest spot has to be your inbox. Consider unsubscribing from sales emails using Unroll.me.

5. Start saving for the holidays now

Right after the holidays, you should start saving for next year. If you struggled to afford this past holiday season, you might wonder how you can start saving for the next one. That’s all the more reason you should start saving ASAP.

I put $200 a month in a Holiday fund starting in January. When it comes to December I will have $2,400 spending money for my holiday.

 

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Two interest rate cuts predicted in the 2nd half of 2019

The cash rate set by the Reserve Bank of Australia (RBA) could be on its way to a new historical low of 1.00% this year, which will be the result of two rate cuts later in the year, according to the major economists in Australia.

All 31 experts and economists in Finder’s  RBA Cash rate survey expected the hold at 1.50% on 5 March 2019, but their predictions that the next move will be a cut continued to pick up steam.

In the survey, over 50% forecasted the cash rate would drop to 1.00% before the year is out.

August and November were the most popular months for a forecasted cut.

With the housing market continuing to fall, and banks increasing rates outside of the RBA, experts seem to be sure we’re looking at at least one cut in 2019, if not two at the backend of this year.

Chief economist at My Housing Market, Dr Andrew Wilson, said an easing off of the cash rate is overdue.

“Although recent wage data was reasonable – not good, not bad – RBA has conditioned the market to now expect a long-needed cut.

“This cut will attempt to revive consumption, which is now likely to also be impacted by continuing weaker housing markets,” Wilson said.

How does the Australian interest rates compare to the rest of the world:

USA 2.50% last direction > UP

Australia 1.5% > DOWN

UK 0.75% >UP

Canada 1.75% >UP

China 4.35% > DOWN

Japan -0.10% > DOWN

NZ 1.75% > DOWN

Russia 7.75% > UP

South Africa 6.75% > UP

Turkey 24% > UP

What some of the economists had to say:

Shane Oliver, AMP Capital: “Things aren’t yet weak enough to push the RBA to cut but they aren’t strong enough to push it to hike either.”

Mark Brimble, Griffith Uni: “Bias is moving toward rate reduction, and while there is a case for this in my view, the RBA is likely to want to hold position for now.”

Tim Reardon, Housing Industry Association: “Insufficient data to conclude that the poor results from end 2018 will be long lived.”

Michael Witts, ING: “Their recent comments suggest the outlook for rates is finely balanced.”

Peter Boehm, KVB Kunlun: “The overall direction of interest rates appears to be at a crossroads. For now, I expect rates to stay on hold but recent mixed economic data (in particular the slowing of the housing market) not to mention what’s happening internationally (political unrest, trade wars, strains on international relationships) is adding a fair degree of volatility to the economic and financial landscape, which may well last during the course of 2019.

Leanne Pilkington, Laing+Simmons: “There’s somewhat of a stand-off in the housing market at the moment. The level of buyer interest is encouraging but reduced accessibility to finance is having a dampening impact on transactional activity. While this issue runs deeper than merely the cost of finance, a hold pattern remains the prudent course for the RBA in the current climate.”

Michael Yardney, Metropole Property Strategists: “The RBA has acknowledged that our economy is weaker and the likelihood that the next movement in rates is down. However, it is hoping for employment growth to buoy our economy and it is likely to wait a month or two and see how our property markets are faring before acting.”

Noel Whittaker, QUT: “There is no way they will raise them and a drop would be premature.”

 

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Mortgage Trick: Use every dollar twice

A magic little Aussie invention called an offset account lets you use every dollar twice. A savings account that runs parallel to your mortgage, it nets off 100 per cent off any money you have in it against your home loan balance. So if you have a $100,000 mortgage and $5000 in an offset, you’ll pay interest only on $95,000.

You might have separate savings for a holiday, for your next car, for kids’ school fees … you should instead be putting every single dollar – which you get to keep – in an offset account. That way you get to use it for its intended purpose and to save dramatic interest.

Let’s assume you have the average mortgage and an average of $10,000 sitting in your offset. You’ll save more than $22,000 in interest, and almost a year and a half.

You could also take this to a higher level by getting your salary/ies paid in and using a credit card for all your expenses, shifting the money out only when your credit card bill is due each month. At which point more salary should go in …

Do you want to see if an Offset account would work for you?

Contact the Boss

tom@bossmoney.com.au

0476111000

www.bossmoney.com.au

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How to increase the value of your home

One of the joys of home ownership is the ability to improve and add value to your place even if the market is going through a slow patch. Having a clear renovation strategy in place is essential to help you achieve your goals.

Long before you start it pays to understand why you are renovating.

Home improvements can help with extra space for a growing family. But at some point, you may want to sell the property at some point in the future, so it makes sense to plan your renovations so that they increase the market appeal – and market value – of your home.

Another reason, is that you may be planning renovations in order to secure a higher bank valuation. This can call for a different set of ground rules. Under these circumstances, you may want your property to look as good as possible while minimising the cost.

Whatever your strategy, 4 factors should be addressed in your renovation plans.

What does the market want?

A golden rule of renovating is that it’s not just about you. Always bear in mind what would appeal to buyers. Who lives in your street and suburb? Is it dominated by families, who may be interested in a 3 or 4 bedroom home with extensive living areas? Or does the location appeal more to couples or even investors, who may be looking for a low maintenance property?

Speak with your local real estate agents. They can explain what’s in demand in the area, and what will turn buyers off.

Which renovations will pay a tidy return?

The main issue we see with renovating is overcapitalising. It can occur when the cost of the project exceeds the value it adds to your home. When a modest home is renovated to the point where it becomes the best in a street, odds are it’s been overcapitalised.

It’s also a case of knowing which improvements add real value.

Research shows 65% of Australians will pay extra for air conditioning, 60% for a carport or garage and 33% are happy to pay more for a home with solar panels. But fewer than one in five buyers will pay more for a swimming pool.

The value you add also hinges on the cost of renovations. A major structural addition such lifting your home can be expensive, often calling for council development approval and possibly an architect. The greater the cost, the easier it can be to overcapitalise – and that’s critical if you’re renovating to sell.

Simple renovations, particularly cosmetic improvements like replacing worn carpets or installing new light fittings, can often be completed on a tight budget. Yet they can add instant appeal and value to your home without the headache of a major project.

The big push of late is installing a Granny Flat.

One renovation you may be considering is adding a granny flat. It’s a growing trend as the combination of housing affordability, our ageing population and increasing multiculturalism fuels multi-generation living.

But will a granny flat add value?

Since 2013, changes in planning laws have made it legal to publicly rent out granny flats in a number of cities.. So it can be a way to earn additional income, which may appeal to some home buyers.

However, granny flats can also act as a home office, guest accommodation, teen retreat, or simply providing additional storage – all of which can add value to your home.

The downside is that a quality granny flat can cost upwards of $100,000. It’s a major outlay, and one you need to be sure will be reflected in an uptick in your home’s value. It all comes back to speaking with local real estate agents to gauge whether it’s a good idea for your location.

Are you able to add plenty of “wow” for not much cash?

If your renovation is pitched largely at boosting your home’s value, it can be worth sticking to improvements that deliver plenty of bang for your buck.

Money spent on rewiring for instance isn’t visually obvious. But re-tiling, polishing floorboards, a fresh coat of paint or new carpets can instantly lift the look of your home. So can other projects like adding built-in robes to add extra storage space. A garden makeover can create instant curb appeal.

How you will fund the improvements?

A well thought-out renovation addresses how you’re going to fund the project.

Depending on your financial position, you may be able to use home equity to cover the cost of works. The beauty of this option is that cash savings can be kept intact for other uses (like unexpected emergencies). Or you could use a construction loan that lets you draw on funds as they’re needed when various stages of the project are complete. It’s especially useful for large-scale renovations, as you pay interest only on the part of the loan drawn down.

Speak with the Boss on the best ways to explore your options. We can walk you through the different strategies available. 

www.bossmoney.com.au

0476111000

tom@bossmoney.com.au

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Is your home loan best for you OR your bank?

The Australian Competition & Consumer Commission (ACCC) launched an investigation into the mortgage pricing decisions of Australia’s big four banks. According to their final report, released in December 2018^, 70% of recent borrowers only obtain one quote before taking out a mortgage.

 

Here is a great recent example…

 

  • Client was on a rate of 4.85% (mortgage = $785,000) with a big four bank. They had been with the bank for 16 years and assumed they were getting a good deal for their loyalty but really didn’t have any idea what their rate was. They just kept paying the mortgage

 

  • They were at a bbq when a friend mentioned they just refinanced their loan for renovations at a rate of 3.75%. You can imagine what happened after that.

 

  • We spoke to their bank who would only reduce their loan to 4.25%, still a saving of $4,700 per annum

 

  • The client wasn’t thrilled so we looked into the market and found them a rate of 3.55% with a non Big 4 bank  …. a total saving of $9,400 pa….YES, $9,400pa

 

  • Same product – Basic variable with redraw, no bells and whistles required

 

END RESULT – They decided to keep their repayments the same, which will reduce their home loan by 8 years and save $150,000 interest (see calculator attached).

 

It only takes a phone call, sms, email to get a home loan health check BUT could save you thousands OR you can keep adding to your banks profit. Its really up to you…

 

^ Australian Competition & Consumer Commission, Residential mortgage price inquiry – Final Report, 11 December, 2018.

Contact Boss Money to get your free home loan heath check

0476 111 000

tom@bossmoney.com.au

www.bossmoney.com.au

 

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Buyers have control of the property market, but why?

Statistics show that there is currently the highest number of properties listed for sale in Australia since 2012.

According to research carried out by CoreLogic, there are currently 115,000 homes listed for sale throughout the nation. This research also shows that vendors have been offering significant price reductions over recent months in order to sell, while properties listed for sale in capital cities are spending significantly more time on the market than ever seen before.

But why might this be?

As strict credit terms and conditions roll into play, prospective homeowners are limited from the very beginning. When combining this with pessimism about the future of the housing market, it’s easy to understand why so many people are reluctant to buy.

Tim Lawless of CoreLogic stated “Properties are being added to the marketplace at a time when conditions are weak.” In order to counteract this, sellers are being forced to offer heavy discounts or extend their sale in order to find an appropriate buyer.

There has also been a noticeable increase in how long it is taking to sell a property, particularly over the past twelve months. More than eighty percent of properties listed for sale in Sydney have been on the market for more than 60 days. This shows an increase of almost 10 percent when comparing statistics from the past 18 months. Sadly, the market in Melbourne has been just as dismal as Sydney, while properties in Canberra, Adelaide and Brisbane also struggle to sell.

Pat and Shirley Tucker have recently put their four-bedroom home in Melbourne’s eastern suburbs on the market. They’re aiming to sell in order to downsize for retirement. However, due to their location, they’ve been finding it difficult to find a buyer and have been forced to lower their expectations. The couple received a number of offers last year, though none that were considered to be good enough.

“We genuinely want to sell the place but we don’t want to give it away.” Pat said.

Homeowner Jess Phillipson also knows the frustration of trying to sell within a failing market. With a beautiful home in Brisbane’s Eastern suburbs on offer, Ms Phillipson has significantly lowered her asking price since first putting her home on the market six months ago.

“We have had some serious offers since then but unfortunately they have had issues with finance.” She said.

Sadly, data indicates that there is unlikely to be any relief for sellers in the near future.

Further adding to the matter, Tim Lawless stated: “We’re not seeing any evidence that the market’s about to turn around, we’re not seeing any evidence that credit is about to loosen either.” All the credit flows data that’s publicly available through the RBA or through the ABS statistics is showing a fairly dramatic and consistent decline.”

While things may appear to be bleak on the market, it’s important to remain optimistic and put your best foot forward. If you are seeking any assistance with finance, contact Boss Money for expert advice and tailored solutions.

0476 111 000

tom@bossmoney.com.au

www.bossmoney.com.au

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Do you have a small business but the bank won’t touch you?

Business owners can become frustrated when their bank declines their loan request. Quite often they come to Boss Money and ask, “How can that be? I have a successful and profitable business that can afford the repayments. Why won’t the bank support me?”

Part of the answer is usually explained by the decision of many business owners to legitimately take advantage of higher tax deductions to reduce the profit shown in the accounts and the resulting amount of tax paid. Whilst this may provide a preferred position with respect to the payment of company taxes it will ultimately also reduce the borrowing capacity of the business.

So simply, the bank is trying to access, ‘Is this business and are the business owners a worthwhile risk’. Most times this will simply come down to the profit shown in the accounts. How much money is left at the end of the day to cover a new debt? In saying that, the right mortgage broker will be able to understand your business financials and determine expenses that can be ‘added’ back to the bottom line to increase profit (and in turn the size of loan a bank will lend to you). Such items are Depreciation, additional Super, non-recurring expenses, interest. Also, some lenders will accept add-backs and some don’t.

In summary, while it is important to reduce the amount of tax you pay, these strategies need to be regularly assessed having regard to the medium to long term objectives and funding requirements. No point in reducing your net profit to a low amount that it stops you from borrowing for expansion.

Good planning of a business’s overall financial needs is best to maximise both their tax and borrowing capacity positions.

At Boss Money, we are also qualified accountants and have a good network of accountants and financial advisers to call upon.

If you would like a review of your business’s funding capabilities contact Boss Money today.

0476 111 000

tom@bossmoney.com.au

www.bossmoney.com.au

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Should you sell or renovate?

One of the questions most homeowners ask themselves is should we renovate or sell? Should we spend $50k, $100k or even $300k on a major renovation or sell up now and buy a home that has everything we want? This could be due to a growing family or you are ready to move on from your first home into your dream home?

Is Renovation the answer?

Once you start looking at houses you may find the houses you like are out of your budget or far away from your current suburb, so renovating your current house could be the way to go. So many people love the area they are in and with children set up in local schools it’s difficult to move.

Once you factor in Stamp Duty, Legal & Agents fees, selling, then buying can be expensive, you will easily throw away $100,000 on a $1mil home! Imagine the renovation you could do on your home for $100,000?

Before we beat the drum about renovating it can have its issues. Not many renovations go to plan, taking longer than expected and usually cost 5-10% more than the initial budget. If you are living in the home during the renovation you have the inconvenience of builders coming and going and expect plenty of mess and noise. If you are not living there you may have the additional cost of rent or live with family (which has its own fun issues).

Well worth talking to an architect and an experienced real estate agent to get ideas on what you should do. You don’t want to over capitalise. No point in spending $100k on renovations which will only see an increase in the value of the home of $50,000. Unless of course you are in it for the long haul and can see yourself staying there for 10 years post-renovation.

Here are some great tips from the website www.letsbemates.com.au

  • Install some new lighting

    Lighting is another factor that contributes a lot to the ambiance of a room. Lucky for you, lighting is also a very affordable factor to change. You can opt for a brighter or dimmer setting depending on how you want the room to feel.

    Colour is another option when it comes to changing the lighting in a room. Small colour accents can help give a room a cooler or warmer feel depending on the shade.

  • Update any room with a fresh coat of paint

    One of the most tried and true budget home renovations is a fresh coat of paint. This is an easy way to help to transform the feeling and ambiance of any room in the house without spending a fortune on extra furniture or add-ons. Paint is fairly inexpensive and is simple to apply. This ensures that money isn’t wasted hiring professionals to conduct renovations. A different colour paint can help change any room without breaking the bank.

  • Add minimalist storage ideas

    Storage is an issue in most households. Not only do you have too many things to store, but storing them in a nice way is important as well. This is when investing in some minimalistic storage is a good idea. Small cubby holes and hanging racks are a few great ideas to make storing clothing and other smaller things a breeze. These storage devices can be added to closets and empty spaces throughout the house.

Or should you move?

After you have done all your research it looks like its better to move…or is it?

We covered this off earlier, but you need to get your head around the costs of selling and buying. Also, do you buy a more expensive property in your area or move further out and pay similar to what you sell for? Will you get better growth in the new area? Has the house got more potential for growth? Do you care about growth or is lifestyle more important. ie Maybe you can’t put a pool in your current home but the new one has a pool?

So what is the best option for you?

I guess that’s a personal choice and everyone is different.

End of the day, you need to do your research. Get a piece of paper with two columns and start writing the pros and cons of each. Contact Boss Money and we can help you with all the costs.

Once you do that it will crystalise which option is best for you.

For a free consultation contact Boss Money today

tom@bossmoney.com.au

0476 111 000

www.bossmoney.com.au/contact

 

 

 

 

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What is a Rentvestor?

What is a rentvestor?

Another way to benefit from owning a home is to buy an investment property. This way you can rent where you want to live (lifestyle living) and buy where you can afford. This rent and invest strategy is known as rentvesting and it’s becoming more popular. It’s also a way for home buyers to get a foot on the property ladder.

Buying and selling an investment property means you can wait and hope that real estate prices increase over the long term. If you charge less rent than what you are making in mortgage repayments, the net loss can be used as a tax deduction, which is known as negative gearing or having a negative cash flow.

This way you could save your way to wealth. If you’re paying rent and that’s your only interaction with the property market, you’re going to be renting your whole life.   Rentvesting is simply renting where you work and buying in another area. At least if have a rental property that you’re renting to someone else, you’re in the market.

It’s important to start young in the Property market and it is like a forced savings program. If you don’t spend your money on property, you’ll probably spend it on something else: you’ll buy more holidays, a fancier car, more clothes – which are all depreciable items which decline in value the minute you buy them.

Sure we need cars, we need clothes, but you have to balance that out with saving for the future.

We read an interesting stat that house prices have surged 6556% since the early 1960s (an average rise of 8.1% each year over 56 years, according to a Bank for International Settlements white paper) – so even though markets are currently taking a hit, if you have a long term view you will end up ahead.

Given you can get a home loan without a deposit, and even borrow up to 105% of the property purchase value now is a great time to get into the market. Take advantage of this blip in the market and don’t be one of those people that look back on this time and say, wish I had bought back then.

Want to know how much you can borrow? What your repayments will be?

Contact Boss Money today

0476 111 000

tom@bossmoney.com.au

www.bossmoney.com.au

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The Pro’s and Cons of Debt Consolidation

 

 

 

 

 

While debt consolidation is a financial method that is quickly growing in popularity, many people still do not know what this means. Put simply, debt consolidation is the process of combining all of one’s outstanding debts into a single repayment.

But will this actually be helpful for you?

First, take a look at the two main benefits to determine whether a debt consolidation loan would improve your financial security.

Just One Repayment
It goes without saying that having numerous accounts and debts can be somewhat stressful to manage – At the best of times. By consolidating your debts into a single loan, you will be avoiding the run around of checking that everything is where it should be. As well as making your payments easier to manage, you will no longer have to deal with numerous creditors – Just one! An additional bonus is that debt consolidation allows you to choose a loan with a fixed interest rate. This means that you will always be aware of what is happening to your money, meaning you can plan accordingly.

Lower Repayments
Alongside the possibility of lower interest rates, individuals who opt for a debt consolidation loan may also receive the added bonus of lower, regular payment amounts.

Debt consolidation can help reduce not only your interest rate, but also your fees by combining all of your existing loans and debts into one. This helps you to avoid the stress of multiple rates and fees so you can focus on paying off your debt quickly and with less hassle.

To make this article fair, we also need to consider the potential pitfalls of debt consolidation (if not managed correctly). Take a look at these couple of points:

You may INCREASE your Debt
If you aren’t vigilant with your finances, you run the risk of accruing even more debt. Whilst most lenders will encourage you not to apply for further credit while repaying a debt consolidation loan, this decision ultimately comes down to the borrower.

If you find yourself seeking more credit and are approved to do so, be very mindful of your repayments and make sure you plan, plan, plan your financial commitments in advance.

Your Debt may last Longer
For many, a lower repayment and decreased interest rate will be highly appealing. However, it’s important to note that these “sneaky” tactics that draw people in are often the reason that people struggle with debt for longer than anticipated.

Where possible, make an effort to submit additional payments when you can afford it. By paying your loan off as early as possible, you will be reducing the overall amount of interest needing to be paid. This is an effective approach that is often overlooked when people feel “comfortable” within their loan terms and conditions as they think they are getting a fantastic deal, when really they could still be helping themselves.

 To help you make a final decision on whether a debt consolidation loan will be of benefit to you, take the time to think about the pro’s and con’s equally.  If it seems too good to be true, it likely is.

Be sure to consider your own circumstances before making a decision – Don’t just listen to others. Seek professional financial advice when needed and never be afraid to ask questions.

If you have any further queries about debt consolidation or you would like to discuss your options in the matter, please feel free to contact Boss Money for expert advice and leading knowledge.

tom@bossmoney.com.au

0476111000

www.bossmoney.com.au

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9 Different Ways to Purchase a Motor Vehicle

 

 

 

 

 

How many ways can you buy a Motor Vehicle? Answer: See my list of 9 different ways below…

And not all of those ways may be suitable for everyone.

It doesn’t have to be a Motor Vehicle either. It could be a Swimming Pool, maybe a boat, a motorbike or an amazing holiday? A caravan or a new garage? An aeroplane even?

Doesn’t really matter what it is, but if you need to spend a serious amount of money, it may be worth looking at some of the things you can do with your home loan to facilitate your new purchase.

The 9 different ways…

  1. Save
  2. Use equity in your home
  3. Refinance and save the difference
  4. Credit Card
  5. Redraw
  6. Inheritance
  7. Use your savings
  8. Personal Loan
  9. Borrow from your parents

Are you looking to purchase a new car? Contact Boss Money for more details.

tom@bossmoney.com.au

0476111000

www.bossmoney.com.au

 

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Mum & Dad Bank Ltd

 

As a parent, it’s a natural instinct to want the best for your children. You want to see them succeed and you want to see them achieve their goals and dreams. From day one, your priority becomes helping your children and looking out for them however you possibly can.

However, as a parent, you may also be faced with a difficult time in life where your children ask for your help to support them financially. Sounds simple, right? Sadly, this is rarely the case. Helping your children on a monetary level may pose a great financial risk to you in the long run, despite your best interests.

Many children ask their parents to act as a guarantor for them. Guarantor loans occur when the equity of one’s home is used to secure the loan for another family member. By acting as a guarantor for your child, you are essentially giving your home back to the bank and agree to take responsibility for any funds or debts your child may be unable to pay in the future.

Guarantor loans are increasing in popularity, particularly for first home buyers. This is because guarantor loans allow homeowners to borrow 100% or more of the purchase price by drawing upon the equity of a family member’s home. Think of it as an alternative form of insurance, if you like.

Sadly, many parents dive into this decision without fully understanding the terms, conditions and potential consequences of signing along this kind of dotted line. Many parents feel a sense of pressure and guilt to help their children, often causing them to disregard their own financial needs and stability. If you are considering acting as a guarantor for your children but do not want to hinder yourself in the process, be sure to do the following before signing into any financial agreement:

Always seek legal advice.
Before signing anything, seek expert advice from an experienced professional who is skilled in these matters. When you speak to a professional, you are putting your best foot forward by developing a better understanding of everything involved. Make sure to do this before any offer is made on a property to avoid disappointment for you or your child if they are unable to settle for any reason.

Additionally, it would be in your best interest to organise a separate meeting with your mortgage broker to discuss any concerns you may have before signing any official documents.

Educate yourself.
Educate yourself about the responsibilities involved in being a guarantor. Financial matters are rarely as straightforward as they seem, so make sure to speak to the right people and do individual research to ensure you are making a well-informed decision.

Be realistic.
It’s important to be honest with yourself when it comes to this decision. Is your child ready to take on the responsibility of a mortgage? Can you trust their financial habits? What will happen if they can no longer afford their repayments?

In these situations, it’s perfectly okay to hope for the best but plan for the worst. Consider the idea of insurance to cover illness, injury or unexpected job loss. After all, if things go south, you have signed over the responsibility for any debt left outstanding.

If you have any further questions about acting as a guarantor for your child or you would like to discuss your options in the matter, feel free to contact Boss Money for expert advice and leading knowledge.

Tom@bossmoney.com.au

www.bossmoney.com.au

0476111000

 

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Top 10 tips to paying off your mortgage real fast

 

 

Here are top 10 ways to pay off your home loan real quick

Your home loan is probably the biggest investment you will make in your life and a debt that most people would like to pay off as quickly as possible.

1. Don’t go near introductory offers

Introductory rates have long been an important marketing tool for lenders. You are initially offered a cheap rate on your loan to get you in the door but once the intro period is over, the lender will switch you to a higher variable rate of interest.

2. Make more frequent payments
The simple things in life are often the best. One of the simplest and best strategies for reducing the term and cost of your loan (and thus your exposure should interest rates rise) is to make your repayment on a fortnightly rather than monthly basis.  It works like this:

Split your monthly payment in two and pay every fortnight. You’ll hardly feel the difference in terms of your disposable income, but it could make thousands of dollars and years difference over the term of your loan. The reason for this is that there are 26 fortnights in a year, but only 12 months. Paying fortnightly means that you will be effectively making 13 monthly payments every year. And this can make a big difference.

3. Consolidate your debts

Interest rates on your credit cards and personal loans are much higher than the interest rate on your home loan. Many lenders will allow you to consolidate – re-finance – all of your debt under the umbrella of your home loan. This means that instead of paying 15 to 20% on your credit card or personal loan, you can transfer these debts to your home loan and pay it off at 5.00% (or whatever rate your home loan is).

As always, any extra repayments or lump sums will benefit you in the long run.

4. Split your loan
Many borrowers worry about interest rates and whether they will go up but don’t want to be tied down by a fixed loan. A good compromise is a split loan, which allows you to take part of your loan as fixed and part as variable. Essentially this allows you to hedge your bets as to whether interest rates are going to rise and by how much.

If interest rates rise you will have the security of knowing part of your loan is safely fixed and won’t move. However, if interest rates don’t go up (or if they rise only slightly or slowly) then you can use the flexibility of the variable portion of your loan and pay that part off more quickly

5. Use your equity
If you have already paid off some of your home, you are said to have equity. Equity is the difference between the current value of your property and the amount you owe the lender. For example, if you have a property worth $750,000 on which you owe $250,000, you are said to have home equity of $500,000, which you can re-borrow without having to go through the approval process by accessing it through your existing loan.

Many lenders will allow you to borrow using your equity as collateral. Most lenders will allow you to borrow up to about 80 per cent of the loan-to-value ratio (LVR) of your available equity. If you are careful, you can use this equity to your advantage and help to pay off your home loan sooner.

Using an equity loan to improve your property could be a good way to ensure that your home increases in value over time. But larger expenses such as cars and holidays that would have been paid by credit card are more affordable on the lower rate of your home loan.

6. Switch to a lender with a lower rate
It may sound like a simple idea but switching out of your current loan and taking out a loan at a lower rate can mean the difference of years and thousands of dollars. If you have a loan that is tricked up with all the features, or even if you have a standard variable loan, you might find that you could get a no frills rate that is as much as a percentage point cheaper than your current loan.

However, check out what it will cost you to switch loans. For example, there may be exit fees payable on your old loan and establishment fees and stamp duty on your new loan. Work it all out and if it makes sense, go for it.

7. Forgo those minor luxuries
I will be hated now. Once you have a mortgage, your life is likely to be luxury-free (or at least pretty close to it). Think of all the weight you will lose by giving up your favourite donut. For the sake of your health you should ease up on the donuts and drink less anyway. Take your lunch from home and save on bad fast food. Trust me, your body will thank you for it.

If you’re still not convinced consider the following example. A typical day may include a couple of coffees and donut ($14), lunch ($15) and a couple of beers after work ($12). That’s $41 a day or $287 a week or $1,243 a month or $14,924 a year.

**Put that extra onto a mortgage of $750,000 and you could save 11 years off your mortgage and $200k+ interest….food for thought right there.

8. Get a cheap rate and invest the difference
When interest rates are low, like now, it is usually safe to say that inflation is also low. Thus, bricks and mortar may not be the best place to invest. Try getting the cheapest home loan you can find and make the minimum repayment. This allows you to use the extra cash to invest in other, more profitable areas.

You may find that the return you get on shares or some other type of investment means that you have created a nice little nest egg which you can use to pay off a bigger chunk of your home loan than you might otherwise have been able to do.

But beware – high returns often mean high risks. Before undertaking any investment, invest in a consultation with a qualified financial adviser.

9. Get an offset account
I have been preaching this for 15 years….

Get an offset account and have your wage paid into it, then use an interest free credit card for all your expenses. At the end of the month, payout the card with the money in the offset. The power of this is your entire wage is sitting in the offset account and reducing the amount of interest the bank charges on your loan.

ie Home Loan $400,000, Offset $10,000…interest is charged on a balance of $390,000 NOT $400,000. It can make a big difference.

10 You don’t have to always use the big 4 banks!!!
Smaller lenders like ING and Auswide don’t have the overheads attached to branch networks so can offer lower rates.

Some borrowers worry about what might happen if their lender gets into financial trouble. Keep in mind that you’ve got their money – so don’t worry too much. There are some smaller lenders whose names might not be readily familiar but whose rates might be enough reason to get in touch.

If you want a review of your home loan, just email the following information to tom@bossmoney.com.au or sms to 0476111000 and the Boss will conduct a review and let you know how uch you could be saving.

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Mortgage Broker Market share reaches all time high

 

 

 

 

Borrowers are increasingly opting to secure finance through the broker channel, with new statistics reporting a sharp rise in broker market share.

According to the latest data released by research group comparator, a CoreLogic business, mortgage brokers settled 59.1 percent of all residential home loans in the September quarter 2018, up from 53.6 percent in the same quarter of 2017 – the largest year-on-year increase for any quarter over the last four years.

The data also revealed that settled broker volumes dropped between the September 2017 and September 2018 quarters from $51.77 billion to $50.19 billion, a 3 percent fall; however, the drop came amid an overall market decline of 8.5 percent from $98.79 billion to $90.33 billion over the same period.

Reflecting on the result, CEO of the Mortgage and Finance Association of Australia (MFAA) Mike Felton said: “This result has occurred during a period of severe credit tightening with brokers stepping in to provide critical assistance in the redistribution of credit demand for those seeking home lending.

“As banks have persisted in making it more difficult to secure a loan, turning many would-be borrowers away, consumers have continued to increasingly utilise the broker channel for experience, expertise, and greater market choice to secure access to credit.”

He continued: “In addition to providing customers access to a panel of 34 lenders on average, brokers are ideally positioned to help customers, especially those with more complex lending scenarios, to understand the ever-evolving application process and provide the information necessary to meet changing lender requirements.

“Mortgage brokers continue to offer choice to consumers and ensure credit continues to flow, which is of systemic importance to the housing market and a strong economy.”

If you want to deal with many lenders rather than just one, contact Boss Money today.

www.bossmoney.com.au

tom@bossmoney.com.au

0476111000

 

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When will interest rates rise – What should you expect?

As lending conditions become tighter by the day and the housing slump continues to rear its ugly head, market experts and economists alike have published their estimates for the next cash rate hike, drawing upon specialised information from the Reserve Bank of Australia.

Following the recent survey distributed by the Australian Financial Review, leading economists made a bold prediction that the Reserve Bank of Australia would increase the official cash rate to 1.75% by June of 2020.

As feared by many, it is expected that property prices will not only continue to rise over the next twelve months, but that lending conditions will become even tighter. If these estimations prove to be correct, the central bank is likely to maintain current cash rates of 1.5%, a figure that has been stable for the past two years.

Industry experts have been weighing in on the matter, and UTS Business School Professor Warren Hogan states that the Reserve Bank of Australia is fully aware of the risks posed by the current market decline. Speaking in further detail, Professor Hogan stated;

“There is a more evenly balanced outlook for interest rates than there has been for the past 18 months as the declines in house prices seen over the last six months increases the probability that the next move in interest rates in Australia is down.”

Katrina Ell of Moody’s Analytics also shared her ideas, explaining that the Australian cash rate had previously been estimated to increase by the second half of 2018. However, due to the significant decline in dwelling values that occurred, Katrina explained that this estimate had been completely malformed by the end of the year.

Top 3 Year Fixed Rates

  1. Auswide 3.76%
  2. Suncorp 3.79%
  3. Westpac 3.79%

Further drawing upon her industry knowledge, Ell believes that the likelihood of rate cuts occurring in 2019 is slim to none, though many economists are quick to disagree.

Stephen Anthony of Industry Super is one to openly doubt Ell’s predictions and instead believes that the central bank is likely to lower rates even further given the speed in which the economy is slowing. When speaking to the Australian Financial Review, Stephen said;

“But should that be the official forecast? It also knows that if it can ‘manage’ sentiment, it may also contribute to a softening of activity rather than a bust, especially via property prices and dwelling investment.”

In agreeance with Stephen, AMP Capital Chief Economist, Shane Oliver, recently published a report with Smart Property Investment. Within this report, Oliver spoke of his predictions of the official cash rate lowering to a mere 1%, given the significant lull in leading housing markets of capital cities including Melbourne and Sydney.

With just a month to wait, the central bank is set to release an official statement of its monetary policy decision when the board congregates in early February.

For further financial updates and expert advice, keep an eye on Boss Money News and Blogs to ensure you never skip a beat.

Contact Boss Money to see you should fix your loan

Tom@bossmoney.com.au

0476111000

www.bossmoney.com.au

 

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How to Pay Off your Credit Card Debt after Christmas

Spent way too much this Christmas???

As the festive season draws to an end, many Australians will find themselves feeling stressed and defeated as they fall into financial debt as a result of their extravagant holiday spending.

Recent studies have shown that Australian spendings accumulate to approximately $25 billion each and every Christmas. If we take a closer look into these figures, it’s been estimated that the average Australian woman will spend a whopping $1406 over the holiday period, while the average man is likely to chalk up $1241. Sadly, studies also show that the majority of these individuals will experience the dreaded “buyers remorse” once the New Year commences.

AMP conducted a recent survey in which it was found that 75% of participants regretted the amount of money they spent over Christmas last year, while more than half of those surveyed couldn’t even recall what their total expenditure might have been. With these statistics in mind, it makes sense that thousands of Australians will find themselves snowballing into debt or relying on credit cards to pull them through the holiday season. A similar 2017 study showed that a massive 40% of Christmas spending was linked to credit cards, resulting in a total figure of $29 billion.

It’s no secret that it can take a huge amount of effort for some people to pay off their credit card debts, particularly as interest rates continue to soar. But that doesn’t mean that all hope is lost if you’ve found yourself in credit card crux, as you do have options to get back on top of things by refinancing your existing loans and consolidating your debts.

Debt consolidation is an increasingly popular strategy in which you have the opportunity to roll multiple existing debts into a single, new debt. Your best bet is to ensure your new debt has a lower interest rate than your existing debt, meaning that your payments will become more manageable and your payoff period will be shorter.

If you’re a homeowner, you are able to take out a loan on the equity of your property. This loan is a lump sum with a fixed interest rate. You also have the option to take out a line of credit on your property, working similarly to a credit card with a variable interest rate. Both options allow you to use that money to pay off your credit card debt quickly and painlessly.

Similarly, you can also utilise a personal loan to consolidate your credit card debt. This loan should grant you a lower interest rate on your existing debt, meaning you are able to pay it off faster. If you have a low credit score, it is recommended that you seek advice from a credit union, as they are more likely to offer flexible loan terms and lower interest rates than standard banks and online lenders.

If you have any further questions about tackling your credit card debt or you would like to get in touch to discuss your options, feel free to contact Boss Money for expert advice and leading knowledge.

Contact Boss Money at www.bossmoney.com.au or Tom@bossmoney.com.au or 0476 111 000.

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The Australian housing market has reached its weakest point since 2008

Dwelling values shrunk by 4.8 per cent in 2018 when compared to the previous calendar year, marking the weakest housing market conditions since the global financial crisis, according to CoreLogic.

The December quarter saw the largest quarterly decline of 2.3 per cent since the same corresponding period in 2008, with Sydney the weakest performing city (-3.9 per cent) and Hobart the strongest performing city (+2.0 per cent) in the last quarter.

The property data and analytics company said the “accelerated” “downturn” was driven primarily by consistently larger quarter-on-quarter (QoQ) declines in Sydney and Melbourne, but also sluggish conditions in other capital cities and most regional areas.

CoreLogic head of research Tim Lawless said: “Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017.

“The two exceptions were regional Tasmania, where the pace of capital gains was higher relative to 2017 resulting in a nation leading 9.9 per cent gain in values over the 2018 calendar year, and Darwin, where the annual rate of decline improved from -8.9 per cent in 2017 to -1.5 per cent in 2018.”

Dwelling values fell by 8.9 per cent in Sydney in 2018 and by 1.3 per cent across the rest of New South Wales. The median price in Sydney at the end of December was $808,494, similar to what it was in August 2016.

Suburbs in Sydney’s inner west (-8.8 per cent), inner south (-10.5 per cent), inner south west (-10.9 per cent), and south west (-9.3 per cent), as well as suburbs like Blacktown (-9.1 per cent), Parramatta (-10.7 per cent), Baulkham Hills and Hawkesbury (-10.8 per cent), Sutherland (-10.9 per cent), and Ryde (-13.3 per cent) were in the top 10 worst performing nationwide.

In broader New South Wales, Newcastle and Lake Macquarie (-4.1 per cent), Illawarra (-6.2 per cent), and the Southern Highlands and Shoalhaven (-4.0 per cent) experienced the biggest slump in values.

Not all of New South Wales was affected, with Riverina (+3.9 per cent) and the central west area (+3.8 per cent) among the top 10 best performing regions in Australia outside of capital cities.

Like Sydney, Melbourne also saw an annual decline of 7.0 per cent in house prices, with a median value of $646,123 at the end of December. This is close to values seen in February 2017, according to CoreLogic. However, the rest of Victoria saw values rise by 5.9 per cent.

Two of the 10 worst performing areas were in Melbourne, specifically the inner southern and inner eastern suburbs where values fell by 10.5 per cent and 13.4 per cent, respectively.

But not all of Victoria saw declines, with Latrobe-Gippsland (+8.7 per cent), Ballarat (+8.3 per cent) and Geelong (+8.2 per cent), and Bendigo (+4.5 per cent) among the top 10 best performing regions in Australia outside of capital cities.

Home values dropped by 4.7 per cent in Perth, with the median price coming in at $446,011, much like what it was in March 2009.

There was a larger decrease of 7.2 per cent across the rest of Western Australia, with Wheat Belt (-4.9 per cent), Bunbury (-8.8 per cent), and Outback South (-11.0 per cent) among the 10 worst performing areas outside of capital cities.

Sluggish housing conditions were also seen in Darwin in 2018 where prices fell by 1.5 per cent to a median of $416,149, which is about what it was in October 2007.

On the other hand, home values rose by 8.7 per cent in Hobart, reaching a median price of $457,523 by the end of last year, while prices increased by 9.9 per cent in broader Tasmania.

Three of the top 10 best performing areas excluding capital cities were in Tasmania, specifically Launceston and other suburbs in the north east (+11.4 per cent), south east (+8.6 per cent), as well as west and north west (+7.8 per cent).

Canberra also saw an increase in house prices of 3.3 per cent to a median of $601,275, along with Adelaide (+1.3 per cent to a median of $434,924) and Brisbane (+0.2 per cent to a median of $493,568).

South Australia saw a slight increase in home values of 0.3 per cent, while Queensland experienced a slight drop of 0.5 per cent.

One area in broader Queensland, Mackay-Isaac-Whitsunday (+5.1 per cent), made it to the top 10 best performing region in Australia.

However, Darling Downs-Maranoa (-5.4 per cent), Townsville (-5.9 per cent), and Outback (-14.1 per cent) in Queensland were in the bottom 10.

Collectively, there was a fall of 6.1 per cent in dwelling values across Australian capital cities in 2018, and a slight decline of 0.2 per cent across regional markets nationwide.

Mr Lawless attributed this to the declining risk appetite of banks, reduction in foreign buyer activity, decrease in overseas migration, and slight rises in mortgage rates.

“On a positive note, interest rates are set to remain close to historic lows and migration is likely to remain high (albeit lower than last year) which will help to keep a floor under housing demand,” he said.

While regional Australia collectively saw dwelling values dip slightly, CoreLogic said it has been performing better than capital cities likely due to “better housing affordability, more sustainable long-term growth trends and improving economic and demographic conditions.”

Mr Lawless believes limited access to finance will remain the biggest barrier to an improvement in housing market conditions in 2019.

It is a great time to check you have the best loan that suits you, not your bank. Contact a Boss Money Mortgage Broker today.

www.bossmoney.com.au

tom@bossmoney.com.au

0476 111 000

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Is it possible to pay off your mortgage in 5 years?

We recently received a call from one of our clients that paid off their home loan in 5 years. We had to find out how, so sat down with them to get the low down.

It was very drastic but it worked. Given not everyone can follow their plan we have included a couple of other methods that will help you pay your home loan off faster.

Their method….we call it HALF & HALF

Julie and Michael went hard on their mortgage to have it paid off quickly. They basically lived off one of their salaries and used the other half to pay off their Mortgage.

Their budget was VERY tight, they kept a note of every dollar, I mean every dollar. They worked out their bills and set up an account for that money and had another account for food, petrol, travel…etc. Anything else was used to pay off their mortgage. This budget gave them no money for impulse buying…boring eh? Well they now own their house outright…not the bank! They also made use of an offset account…which took 8 years off the term of the loan. If you are not using an offset or have one and not using it properly, contact us now and we will show you how it works.

If this is too extreme for you (and would be for most), there is another way…15 YEARS

Instead of refinancing to the usual 30 year term, refinance to a 15 year term. On a loan of $400k, that’s an extra repayment of $250pw…saving you $142,000 interest!

If these two methods are too crazy for you…there is a sneaky way to pay off your mortgage faster.

We are surprised by how many people are still making their mortgage repayments monthly!!!! By simply switching to fortnightly repayments, you gain an extra repayment every year. Couple this with dropping any tax refunds to your mortgage you can cut 5 years off your loan term. Give this an extra boost by using an Offset account and you can easily take 10 years off your mortgage.

Some other tips in saving money which could go towards the Mortgage are….

1. Stop your gym membership and exercise outside
2. Less restaurant trips and cook and entertain at home
3. Keep money in your paypal account and transfer to the Mortgage at the end of every month
4. Make coffee at home instead of buying
5. Buy food in bulk
6. Renegotiate your utility bills and insurance

Remember, all these are not forever, short term pain for long term gain.

If you want to pay off your mortgage faster, contact Boss Money to discuss the various structures available. At minimum, make your repayments fortnightly!!

Just by using an Offset account correctly and switching your repayments to fortnightly you can easily take 8-10 years off your loan term.

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Avoid these 7 mistakes when making an offer on a house

7 mistakes you need to avoid

When making an offer on a house, you have a better chance of success if you do these things:

1. Know what you can afford and what you are willing to spend
2. Get pre-approved for your home mortgage
3. Minimize contingencies

Sellers and agents know you’re serious and give your offer more consideration (even if it’s lower) when you are pre-approved and ready to close without a ton of hoops to jump through.

Making an offer on a house: It’s a jungle out there

It took weeks of house-hunting, but you finally found the perfect home. Unfortunately, two other buyers feel the same way about the house. How can you make sure your offer will be the one the seller can’t refuse?

7 mistakes to avoid when making an offer

If you’re shopping for a home, you may find yourself in a bidding war. If so, you may be tempted to approach the situation like an eBay auction and raise your offer price.

That could be a costly mistake.

A better way to get the home you want, without overpaying, is to avoid these 7 home offer mistakes. Many of your rivals won’t avoid them, giving you a competitive edge.

1: Failing to get pre-approved for a mortgage

When buying a home, don’t start by searching real estate listings. Step 1 should be determining how much you can afford and get pre-approved for a mortgage.

Sellers give preference to buyers who are pre-approved. Pre-approval tells them that when it’s time to close, you will have the money.

So before you hit the streets, get a pre-approval letter from one or more lenders, not just a pre-qualification letter.

A pre-approval letter confirms that you’ll be able to borrow X amount based on that lender’s evaluation of your credit score, assets and income. With pre-qualification, the lender is merely estimating how much you could borrow. It’s not committing to giving you a loan.

Although pre-approval takes longer and requires an application, it’s a worthwhile investment.

2: Bidding the entire pre-approved amount

Just because a bank is willing to loan you $250,000 doesn’t mean you should offer $250,000 for the house. In fact, doing so may damage your credibility.

Experienced sellers and agents get nervous when buyers bid the full pre-approval amount. For one thing, this could eliminate your “wiggle room” in future negotiations. For another, if interest rates rise, you may no longer qualify for that loan amount and will have to back out of the deal.

Understand, also, that just because you can do something doesn’t mean you should. Your lender won’t consider your long (expensive) commute, pricey hobbies or savings goals. You may want to spend less and breathe easier.

3: Not researching the market and the seller

If you hire a buyer’s agent, she will help you formulate an attractive offer based on sales of comparable homes in the area (“comps”).

But the price isn’t the only thing that can make an offer alluring. If you or your agent search public records and real estate listings, you may unearth valuable “intel” about the homeowner’s motivations for selling. This could help you structure a winning offer for less money.

Also, check the seller’s social media for clues. You may find that you have things or people in common, and that could help when negotiating. Just don’t be a stalker or say anything creepy.

For example, you might learn that the seller is being relocated and needs a quick closing – faster than other buyers are willing to accept. Or, you might learn that the seller hasn’t yet found a home and may want to delay closing. Armed with this information, you can craft a more tempting offer than your rivals for the same price (or less).

4: Submitting a lowball offer

Submitting a lowball offer that isn’t supported by sales data could easily backfire, especially in a sellers’ market.

Buying a house isn’t like haggling at a flea market. So don’t offer $800,000 for a house worth $1,000,000, and expect a counteroffer. All too often, the seller will be insulted by your “opening bid,”.

5: Including too many contingencies

Most offers include a few standard “contingencies” – things that need to happen before the deal can close. For example, it’s wise to make an offer contingent on a home inspection and your ability to get financing within a specified time.

As a rule, however, contingencies are obstacles to successful closings. So keep them to a minimum. In red-hot markets, forgo contingencies for non-essential repairs and credits. It doesn’t hurt to ask, but be prepared to waive those contingencies to seal the deal.

Whatever you do, though, don’t waive the contingency for a home inspection. If you do, and later discover a major defect, you could lose your “earnest money” if you back out of the deal.

6: Using the seller’s agent

The seller’s agent has a duty to promote the seller’s interests. That means getting the highest price and best terms for the seller, not you. Using the seller’s agent creates a “dual agency” situation, which leaves your interests unprotected – except by you. And in that case, why hire an agent at all?

7: Letting your emotions guide you

Sometimes, buyers are so blinded by certain features – polished hardwood floors or swimming pools – that they overlook obvious defects.

No matter how much you love a house, and how good your offer, you won’t always win. Rather than overpaying, be prepared to walk away.

There will be more homes for sale that meet your needs and wants. It’s possible that your true “dream home” is still out there.

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Your mobile phone plan will affect how much you can borrow?

What you should know about mobile phone plans

These days we all seem to be glued to our mobile phones. It’s the first thing we check in the morning and the last thing we check before we go to bed. You might even be reading this article on your phone! So, before you sign your next mobile contract, let’s take a look at some of the basics below.

What do you need?
What do you need from your plan and how do you use your mobile? Here are a few things you should consider:

• Will you BYO phone or do you need one included in the plan?
• Do you need unlimited calls & texts?
• How much data do you use each month?
• Do you need international roaming?
• Is the plan for yourself or do you need one that covers the entire family?
• Do you want to bundle it with a landline or internet deal?

Do you even need a mobile phone plan? If you prefer not to be locked into a contract and just want to top up your account when needed, you might like to consider going pre-paid instead.

How much will it cost?
Knowing the cost of your bill is important so that you can factor it in to your monthly budget. Remember, the price that many service providers advertise is the minimum price of the plan. Don’t forget to consider additional costs that might not be included, such as:

• Insurance for your phone
• International roaming charges
• The cost of extra data if you go over your allowance
• Early termination fees if you cancel your plan early
• Payment processing fees & late payment fees

It’s also worth checking if you qualify for any discounts. For example, some providers offer discounts on selected plans for uni students

Read the Critical Information Summary
The Critical Information Summary is a free document that the service provider must give you about the service. You can usually find it online on the provider’s website when you’re doing your research. The Critical Information Summary contains important information about the service and what is included, information about pricing, and other important information about billing, tracking your usage, overseas usage, mobile coverage, and contact details for customer service and complaints.

It could affect your credit score
When you apply for a post-paid mobile phone contract, you are essentially applying for credit. You get a mobile service now and you’re paying for it later. Your service provider can do a credit check on you so that they’re comfortable you can pay your bill each month. This credit check will appear on your credit report as a credit enquiry and can impact your score.

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What is Rent to Buy?

Could a Rent to Buy scheme help you get into your own home?

The question of ‘Is it better to rent or buy?’ is a common one but what if there was a way to do both? While they offer a different way to get into the property market, rent to buy or rent to own schemes won’t be for everyone.

Rent to buy is a type of vendor (or seller) finance, where the owner of a property provides finance to the buyer. Sound a bit backward? Some experts think it is and warn against it. However, if the vendor is willing it becomes another way for young home buyers to enter the housing market without having to buy something up front or go through traditional lenders for finance.

What is rent to buy?
Just as they sound, rent to buy schemes are like renting a property, but you may pay a bit more in rent with the additional amount going towards potential home ownership at a future agreed date.

The property needs to have a renting or leasing contract, which outlines the market rent and basically allows you to live in the property. This will also likely include an agreed time frame of how long you want to rent the property for.

Help building a deposit
Then there’s the buy or sale component, called an option deed or option, which allows the tenant to buy the home and move into a mortgage agreement at the end of the lease term. Often an upfront option fee will need to be paid, plus additional ongoing option fees which are on top of the agreed rental payments.

These fees help the buyer build up a deposit, so at the end of the rental period, they have a smaller balance to pay on the agreed property value if the purchase goes ahead, which could be helpful for young home buyers. However, if it doesn’t, the vendor will keep the fees. The normal rental payments don’t go towards the sale as they’re covering the landlord or owners.

Improve your track record
Typically, the price of the property is agreed up front so any increases in value will be to the buyer’s benefit in capital gains, which is meant to offset the option fees being non-refundable.

Combining the rent and option fees shouldn’t cost you more than a typical mortgage would if you had bought the property initially. Depending on your credit history, employment, assets and other liabilities, these regular payments might also help you build up a good track record of payments to help you qualify for a loan from a traditional leader when buying a house at a young age.

Potential pitfalls
Before entering into this type of scheme it’s important to seek professional financial and legal advice because there can be some risks or downsides to rent to buy, including:

* The property purchase price can be more expensive than market value, making it difficult to build up equity or qualify for finance;
* The intermediary involved may take a large percentage of the rental payments, option fees, and even final sale;
* The buyer’s name isn’t on the property’s title so there are less security and no way to protect their investment, e.g. if the seller goes bankrupt others can make claims against the property; and Financing isn’t guaranteed, so if the buyer defaults or can’t secure finance when it comes time to buy, they may lose all the money they have already invested into the property.

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Property Market Predictions 2019 – 2021

Where will our property markets be in 3 years?

That’s a question people are asking now that our real estate markets have moved to the next stage of the property cycle – one of falling property values in some areas and slower growth in other locations.

We are now seeing the predicted softening in both the Sydney and Melbourne markets after many years of growth.

First time home buyers are surging back into these markets replacing some of the demand left by retreating investors.

While there are a lot of property pessimist out there, one group of forecasts — those by BIS Oxford Economics suggests we are in for a soft landing.

Their Residential Property Prospects 2018-2021 report, which predicts the Australian property market outlook, is well worth reading.

BIS Oxford Economics is the only company I know which produces residential real estate forecasts over a three-year horizon and places them in the public domain in June each year.

So what’s ahead?
House price growth around Australia has been slowing in recent months, led by falling values in many locations in Sydney and Melbourne, Australia’s largest and most expensive property markets.

That trend looks set to continue driven by tighter lending standards from Australia’s banking regulator – APRA at a time that our banks being allergic to risk following their belting in the Royal Banking Commission, along with weak wage growth, affordability constraints, an increase in apartment supply.

These tighter lending conditions – the inability for many investors who could have in the past borrowed more – are really having the same effect as a rise in interest rates.

They’ve slowed down demand especially the Sydney and Melbourne property markets

In short… we’re in for a soft landing with further price falls in the short term and the stabilising real estate values.

Taking inflation into account, modest price declines were forecast in most capital cities over the next 12 months.

And then all capital cities will turn around and show price growth over the next 3 years, but the results will be fragmented.

BIS suggests the current slowdown is due to tighter lending criteria, particularly a crackdown on interest-only loans, and record levels of dwelling construction being completed (above 200,000 per year), which may lead to an oversupply in some states.

Prediction

And the good news is that our housing markets won’t crash, being underpinned by record low interest rates, a “relatively stable, albeit subdued, economic environment” and strong population growth.

But there should be some “upside” from 2021, as “high net overseas migration inflows [are] likely to be sustained in the coming years” — and “economic conditions begin to strengthen and supply falls back below underlying demand”.

Population growth will absorb the huge supply of new dwellings from the recent construction boom, although any growth in rental will be minimal, according to BIS.

Recent research from QBE predict the following:
1) Interest rates to rise a little over the next 3 years – but only by 0.5%, not the large increase in rates some are predicting, and this is unlikely to occur until 2020
2) Inflation slowly nudging its way up
3) Employment growth continuing, albeit at a slower rate and the unemployment rate holding steady
4) Continued strong population growth due to overseas migration
5) Our economy growing much the same as it has in the last few years.
As you can see they predict strong economic fundamentals – nothing to suggest a property crash ahead.

Here is a State by State roundup:-

SYDNEY
Sydney Property Market Forecast

Median house price in June 2018: $1.12 million

Forecast median house price June 2021: $1,150,000

Growth 2018 to 2021: 3% Sydney

The downturn in Sydney prices is expected to continue, with the report predicting house prices to fall by 2 percent over the next financial year, before they start rising again

Sydney prices are expected to rise just 3 percent by 2021, the slowest out of every Australian capital city.

The Harbour City has seen its prices soar by 85 percent since 2013, with investors — which account for over half the values of mortgages in that period — pushing up prices to record highs.

In the face of retreating investor demand, the report forecasts that first-home buyer activity will support apartment prices.

While the top end of the market is suffering from lack of buyers for prestige home and the lower end markets like Sydney’s South West or the Central Coast are being held back by affordability issues, some of the inner and middle ring suburbs are strongly outperforming the averages.

BIS predicts Sydney’s median will fall by 2 percent in the next financial year (2018/19), but an undersupply of dwellings will prevent larger price falls.

“By 2019/20, a combination of the correction in prices, the undersupplied market and some improvement in the economic outlook is forecast to see prices stabilise, and potentially show modest rises into 2020/21.”

Need Finance for your next purchase or want to check you have the best loan? Contact Boss Money www.bossmoney.com.au

MELBOURNE
Melbourne Property Market Forecast
Median house price in June: $870,000

Forecast median house price June 2021: $920,000

Growth 2018 to 2021: 6%

House prices in the Victorian capital surged 65 percent in the last five years, reaching a peak of $892,000 in December 2017.

Even though the Melbourne property market it is taking a breather after 5 years of exceptional growth, there is no sign of a collapse in sight.

Record population growth continues to fuel demand for housing, maintaining an overall undersupply in the market, the report stated.

While the national population grew by 1.6% in the year ended 30 June 2017, the highest growth was in Victoria, with a 2.3% increase in population and experts have predicted it is likely to surpass Sydney as the largest city of Australia by as early as 2031.

“While new dwelling completions are forecast to continue to rise through 2018, as the large pipeline of apartment buildings under construction work their way to completion, supply will be largely met by population growth,” the report’s author Mr Angie Zigomanis said.

House prices are forecast to tread water through to 2021, rising below the pace of inflation.

The report said the emerging downturn in new dwelling construction could spark a modest uptick in prices.

Although the wider market is not expected to tip into oversupply, BIS Oxford Economics anticipates there will be pockets of apartment oversupply given the extent of new unit construction compared to houses.

Unit prices are forecast to fall 2 per cent over the next three years.

BRISBANE
Brisbane Property Market Forecast
Median house price in June: $550,000

Forecast median house price June 2021: $620,000

Growth 2018 to 2021: 13%

BIS’s forecast is that Brisbane will see the strongest growth over the next three years, jumping 13 per cent to a median of $620,000.

An oversupply in the apartment sector is dragging down Brisbane’s wider housing market, but the sunshine state is starting to see a boost in interstate migrants — particularly from Sydney — with prospective buyers lured by Brisbane’s comparative affordability.

“Some green shoots look like they are starting to emerge in the Brisbane market,” Mr Zigomanis said.

“However, any upturn is likely to be delayed until economic conditions pick up and excess stock is further absorbed.”

Brisbane real estate has been buoyed by steady population growth driving demand and underpinned by good economic fundamentals including jobs creation and a low unemployment rate.

Queensland has now become the number-one destination for internal migration, taking over from Victoria and overseas migrants are starting to see Brisbane as the place to be, bringing 12,847 residents into the city.

Need Finance for your next purchase or want to check you have the best loan? Contact Boss Money www.bossmoney.com.au

CANBERRA
Canberra Property Market Forecast
Median house price in June: $700,000 Canberra

Forecast median house price June 2021: $770,000

Growth 2018 to 2021: 10%

Canberra’s housing market has proven to be somewhat of a quiet achiever in recent years, with momentum tipped to continue in the short term.

House prices are forecast to increase 5 per cent over the next financial year before slowing over the following two years, culminating in an overall rise of 10 per cent by 2021.

Apartments were tipped to record price growth of 6 per cent over the next three years.

The report noted Canberra’s rental market was very tight, recording a 0.7 per cent vacancy rate in the March quarter.

PERTH
Perth Property Market Forecast
Median house price in June: $520,000

Forecast median house price June 2021: $570,000Perth Property Update

Growth 2018 to 2021: 10%

The Perth housing market has been in a slump for 4 years now.

Perth house prices have declined by 13 per cent since 2014 but the worst could be over.

“House prices in the Perth market appear to be bottoming out,” Mr Zigomanis said, pointing to stronger overseas migration and a reduction in the number of West Australians moving interstate.

Perth’s vacancy rate remains high at 5.1 per cent and rents have collapsed, falling by up to 30 per since since 2013.

The report predicted the recovery of the Perth market would be a “long, slow grind as the city has to work through a significant oversupply…”

Perth is expected to see “minimal growth” for the next couple of years, before it sees “stronger growth” in 2021.

HOBART
Hobart Property Market Forecast
Median house price in June: $485,000 Hobart 2

Forecast median house price June 2021: $525,000

Growth 2018 to 2021: 8%

Hobart has been the strongest property market over the last few years, but remember — it is a very small market which can be easily moved in either direction.

“However the current migration inflows largely comprise younger adults and families with children, suggesting people moving for Hobart’s affordability or expats coming back to raise a family,” he said.

The median house is tipped to rise by 5 per cent over the next year, and then slow in following years.

Both houses and unit prices are forecast to grow by 8 per cent by mid-2021.

ADELAIDE
Adelaide Property Market Forecast
Median house price in June: $510,000 Adelaide

Forecast median house price June 2021: $555,000

Growth 2018 to 2021: 9%

With South Australia’s automotive manufacturing industry shutting down, its economy and property market are currently subdued.

A soft economic environment and lacklustre population growth will result in modest house price growth over the coming years, according to BIS.

“Economic conditions in South Australia are expected to remain subdued in the short term,” Mr Zigomanis said, pointing to a high unemployment rate and the shutdown of automotive manufacturing. “Purchasers are expected to become more cautious.”

BIS predicts its shipbuilding industry will drive future employment and slowly boost interstate migration into Adelaide, lifting its median house price to $555,000 by 2021

House prices are expected to grow by 9 per cent by 2021.

DARWIN
Darwin Property Market Forecast
Median house price in June: $505,000

Forecast median house price June 2021: $520,000 Darwin

Growth 2018 to 2021: 5%

Darwin peaked in June 2014 and since then, house prices have nosedived 19 per cent

but the report’s authors said they expected them to have bottomed out.

A general oversupply means prices are forecast to remain flat over the upcoming financial year, followed by two years of limited growth.

House prices and unit prices are expected to life by 5 percent and 4 percent respectively.

Need Finance for your next purchase or want to check you have the best loan? Contact Boss Money www.bossmoney.com.au

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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 assess your borrowing power?

Gross income

The lender will look at all your sources of income to calculate your gross income. Sources include your base income, overtime, a two-year history of any bonuses, commission (if you have been receiving a regular ongoing amount for at least one or two years), any regular payments from a family trust and any rent derived from investment properties. If you have children under the age of 11, the lender will also include any Family Tax Benefits A& B.

Tax and Medicare

Your tax and Medicare expenses will be calculated to assess how these costs reduce the amount of your gross income.

Negative gearing benefits

If you already have investment properties and incur benefits through negative gearing, the lender tend to increase the amount of the potential loan.

Your new mortgage

When calculating how much your new loan repayments will cost, the lender will slightly increase the interest rate by about 1% to 3% to create a buffer against future interest rate rises. If you are purchasing an investment property, they will sometimes calculate an even higher interest rate, depending on the current market.

Your current financial commitments

Your ability to pay off your loan will be affected by your other financial commitments, such as ongoing debts and living expenses. Lenders will look at your existing mortgages, credit cards and personal loans to determine your financial status. Credit cards will be assessed as if you owe the maximum limit, not on how much you currently owe. And the lender will also calculate on a slightly higher interest rate. If you are living rent-free with a family member, the lender will calculate in a hypothetical rental payment to allow for a change in your circumstances.

You can present your lender with your own estimate of your living expenses; your lender will compare this amount to their own calculation of the minimum expenses for a family of your size. They will use the higher figure to make their estimation.

The buffer

The lender will add a hypothetical expense as a buffer against any unexpected expenses that could affect your ability to repay the loan. The purpose of the buffer is to ensure that you are borrowing slightly less than you can currently comfortably afford.

Surplus or shortfall?

Once the lender has calculated each expense, they will deduct these expenses from your gross income. If the expenses are greater than your gross income, the result will be a shortfall. If you are living within your income, the result will be a surplus – extra money that can be used to pay off a loan. A surplus is a good first step to securing a loan, although the lender will also take into account factors such as your employment history, your credit score and your savings before making a decision.

You can use this method yourself to calculate your own surplus so you have a good idea how you can manage loan repayments once you purchase a property. This is an excellent exercise in getting a strong grasp on your budget and working out ways you can make your money work for you more effectively.

For assistance in calculating your borrowing power, contact us today.

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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 time.

Keep it simple and contained

The renovations that increase the value of a home are generally in the kitchen and bathroom. A future buyer wants to know that these rooms are up-to-date with relatively new fixtures and fittings. The garden is another selling point as potential buyers will be attracted to a healthy, well maintained garden.

Take your renovations slowly, step by step, finishing one room before starting on another. This way, you can keep track of costs and also ensure that your house remains “liveable” rather than turning into a chaotic mess that will be finished one day!

Check for council approval

Before you dive into any renovations, make sure you have council approval. As part of the process, ask your neighbours to check over your plans before you start work. You don’t want the neighbours complaining that your renovation reduces the value or comfort of their home. Sometimes it just means repositioning a window that overlooks the neighbour’s yard, in order to keep everyone happy.

Consider your financing

Depending on your financial position, you could use your equity to finance the renovations, a combination of equity and savings, or you could take out a construction loan. In order to access the equity on your home loan, you need to ensure that the loan includes features such as redraw, line of credit and an offset account (this of course varies based on individual circumstances and needs).

A construction loan is written against the renovated valuation of the property, and the lender interacts directly with the builder, making regular milestone payments and monitoring a schedule. Basically, your lender has a vested interest in ensuring your renovation increases the value of your home.

If you need assistance working out the best way to finance your renovation and ensure it increases the value of your home, contact us today.

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BROKER V BANK – TIP 5

Choice – Probably the most important

The biggest advantage of a broker over a bank is simply choice.

When you sit in front of a broker you are really sitting in front of 30+ banks and thousands of products, whereas a bank only has access to one banks products.

Also, the broker will most likely have your own bank as one of its lenders so they can compare their products anyway.

As the quotes goes ‘would your bank tell you if another bank had a better deal’ – fat chance.

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BROKER V BANK – TIP 4

Mortgage Brokers are pretty much available 24/7

Unlike your bank, Good brokers are available weekends, nights, late nights and have been known to help clients on public holidays.

You can meet at their offices, your office, your home, a cafe, sport game, shopping centre… anywhere, anytime!

So, if you have found the House of your dreams and need to act quickly, brokers are only a phone call away. They can get you the answers you need and get your home loan application moving.

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BROKER V BANK – TIP 3

Get the loan amount you want

Every lender has different ways to calculate how much you can borrow. Different living expenses, different loan assessment rates, different ways they treat existing loans.

There can be $100,000 difference between Lender A & Lender Z. So if one bank says no, another might say yes.

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BROKER V BANK – TIP 2

Why use a broker over a bank – it’s a FREE service!

People often think that with all a broker does, there must be a fee involved? But there isn’t.

A broker will find you the best loan for your individual circumstances, handle all the paperwork, deal with the bank, your solicitor,
The agent and hold your hand from lodgement to settlement …. and beyond.

A mortgage broker works for YOU not the bank. It’s simply not in the Banks Financial interest to give you their cheapest home loan if they don’t have to.

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BROKER V BANK – TIP 1

Make lenders compete for your loan

Even if you have never used a broker, loans today are cheaper because of brokers.

Smaller lenders don’t have the big budgets of the big four, so they need to offer their loans via brokers. This forces the big 4 to drop their rates to stay competitive.

When you go straight to your bank you lose the power of other banks offering you a better deal.

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FAMILY PLEDGE HOME LOANS

Borrow 105%+ with a family pledge loan

Family pledge loans are now the only way to borrow 100% of the purchase price as traditional no deposit home loans have been withdrawn from the market.

Did you know that there are stark differences between the family pledge supported loans offered by different lenders?

With the help of a family pledge you can borrow over 100% of the purchase price which will allow you to buy a home and pay for purchasing costs such as stamp duty at the same time.

How much can you borrow?

  • First home buyer family pledge loan: 105% of the property value.
  • Second home buyer family pledge loan: 105% of the property value.
  • Investor family pledge loan: 105% of the property value.
  • Construction family pledge loan: 105% of the property value & cost of construction.
  • Low doc family pledge loan: Not available with a no deposit family pledge mortgage. See below for our 80/20 method of financing low doc loans with the help of a family member.

Note: Most lenders will cap the loan amount at 100% of the purchase price with a family pledge or will require that you have saved a small deposit. Some of our lenders are happy to consider lending 105% which allows you to buy a property with no savings whatsoever.

The benefits of “going family pledge”

From the banks point of view, if you are borrowing more than 80% of the value of your property then there is a chance that the bank will lose money if you can’t make your repayments. Because of this they charge you a fee known as Lenders Mortgage Insurance to protect themselves in case there is a loss. This fee can be quite significant. Recently no deposit home loans have been withdrawn from the market making family pledge style family pledge loans the only way to borrow 100% of the purchase price or more.

Family pledge loans have several benefits for you as the borrower:

  • Save money by avoiding Lenders Mortgage Insurance (LMI).
  • Borrow more money.
  • You can consolidate some minor debts such as credit cards when you buy your home as long as your loan does not exceed 110% of the purchase price.
  • You don’t need a deposit.

What types of family pledges are there?

**Security guarantee: With this type of guarantee the family pledge uses real estate that they own as additional security for your loan. If the family pledge already has a loan on their property then in most cases the bank can take a 2nd mortgage as security. This type of guarantee is most often used when first home buyers are buying a home, have an excellent income, but no deposit. The family pledge is also called an “equity family pledge” by some lenders.

Income guarantee: With this type of guarantee the family pledge is not required to provide any property as security. The family is pledging their income to be used to help to make the repayments. This type of guarantee is often used when someone is trying to buy a house in their name but is receiving help from someone who will not own the house to make the repayments. The income guarantee allows the bank to consider people in these circumstances who would otherwise be unable to qualify for a loan. Usually this type of guarantee is only for a short period of time where the borrower is on an initial low income period, such as student, probation, traineeship, etc. Once your income is enough to service the loan, you must remove the guarantee. You cannot borrow more than 80% of the property value with an income guarantee in place unless there is also a security guarantee (see below). Note that not all lenders would consider income guarantee, and usually only on a case-by-case basis.

Security & income guarantee: This is a combination of the above two guarantee types. A security and income family pledge is most often a parent helping their son or daughter who is a student or who has a low income to buy their first property.

Family guarantee / parent guarantee: This is the name given for when the family pledge is directly related to the borrowers. Banks refer to this as a “parental guarantee”. Grandparents, siblings and other family members as pledgers can be considered on a case by case basis.

**Limited guarantee: A limited guarantee is where only part of the loan is guaranteed by the family pledge. This is most often used with security family pledge so as to reduce the potential liability secured on the pledgers’ property. Guarantees can be either limited or unlimited, depending on both the family pledge wishes and the lenders requirements.

Why do you need expert advice?

  • Home loans supported by a guarantee go by many names and are offered by many lenders. There are many aspects to consider when applying for this type of mortgage:
  • Getting approval: Lenders are more conservative than ever, did you know that lenders are particularly conservative with family pledge loans? We know which lenders accept which types of guarantees and which lenders will accept someone in your situation.
  • Know the terms and conditions: Some banks have simple terms and conditions for their family pledge loans and allow you to limit the amount of the guarantee. However many lenders will not limit the guarantee which means the family pledge could lose their home if you are unable to repay your loan.
  • The exit strategy: The loan may have a term of 30 years however you don’t need to keep the guarantee in place for that long. We can help you work out a strategy of either making extra repayments or refinancing to remove the guarantee in as little as 2 to 5 years.
  • Consolidating debts: Very few lenders will allow you to buy a home and consolidate your credit cards or personal loans at the same time. We know which lenders will allow you to roll everything into one simple, low repayment each month. Note that you can only consolidate a few minor debts, if your debts are over 10% of the purchase price then you will not be able to roll them into the mortgage with any lender. Your repayments must be on time, every time, before a lender will allow you to combine them into your new mortgage.
  • First home or 2nd home?: Many lenders will not allow 2nd home buyers to buy a home using a family pledge loan as they expect that you should have a strong enough asset position to buy a property on your own. Still other lenders ask first home buyers to explain why they are able to pay a loan if they haven’t been able to save a deposit! We know which lenders are less conservative when assessing their family pledge loans.
  • Investment loans: Only two or three lenders in Australia will accept investment loans supported by a family pledge.
  • Family pledgers with a loan on their property: Many lenders will not take a 2nd mortgage as security for a guarantee. We have access to lenders that can accept family pledgers that are still paying off the home loan on their property as long as they have sufficient equity.
  • Do you have any savings?: Even though family pledge loans allow you to borrow 100% of the purchase price many lenders still require you to prove that you can save at least 5% of the purchase price on your own. Talk to us to find out which lenders do not require genuine savings.
  • Elderly family pledgers: Most of the banks and other lenders in Australia will not accept a security guarantee from an elderly family pledger. We know of lenders that can accept guarantees from pensioners and self funded retirees over 65 years of age.

How is the mortgage for the guarantee structured?

The loan is secured by both the property that you are buying and the property owned by the family pledge. It is quite simple, and if you use a limited guarantee then the family pledge can reduce their exposure to your mortgage.

Borrowing more than 105%

In the past lenders commonly allowed people to borrow 120% with a family pledge home loan and in some cases as much as 150% of the purchase price. These loan types are no longer available. The maximum you can borrow is 105% of the purchase price with most lenders and 110% if you have debts to consolidate.

Many people wishing to buy a home have significant consumer debts such as credit cards and personal loans. If you are in this situation then generally you will be able to consolidate debts as well as purchase a property as long as your total debts are not more than 10% of the purchase price.

Who can be a family pledger?

Most banks will only allow parental guarantees, i.e. a guarantee from the borrower’s parents. Some lenders can consider guarantees from immediate family members such as siblings, grandparents, spouses, de facto partners or adult children. This is because banks want to make sure that the family pledger has a strong relationship with you.

Some lenders will allow anybody to be a family pledger, as long as you can explain why they are helping you. This allows more extended family members such as cousins or other people
such as friends to help you with your loan.

Generally if your family pledger is not part of your immediate family then you may be required to prove some savings as evidence that you are financially stable and the lender is also likely to restrict your loan to 100% of the purchase price.

How much is the guarantee limited to?

In the vast majority of family pledge loans we ask the lender to limit the guarantee secured on the family pledge’s property. This means they are not liable for the entire amount of the loan, only a portion of it.

The size of the limited guarantee is calculated as follows:

Size of the limited guarantee = Purchase price x 25%

For example if you are buying a property for $300,000 and are borrowing $315,000 to cover your expenses such as stamp duty then the calculation would be:

$300,000 value of the property you are buying x 25% = A limited guarantee of $75,000 How do lenders work out if your family pledge has enough equity in their property?

The total debt secured on the family pledge’s property, for example their current home loan plus the new limited guarantee, must be less than 80% of the value of their property.

For example if your family pledge had a home loan with $100,000 owing and they needed to give a limited guarantee of $75,000 then the total debt secured on their property would be $175,000. Their home must be worth $219,000 or more for the family pledge loan to be approved.

Don’t worry if this seems complicated! We’ll work it all out for you.

What names are used for family pledge loans?

Every lender seems to have come up with their own name for family pledge loans! St George Bank uses the term “Family Pledge”, CBA uses the term “Family Support” or “Family Equity”, Rams uses the term “Fast Track” whereas ANZ and Westpac use the term “Family Guarantee”. Confused yet?

Don’t worry, they all mean essentially the same thing. Most of these terms refer to a security guarantee, as only a few select lenders allow other types of guarantees. There are big differences between the bank’s credit guidelines, loan types and discounts for family guarantee loans.

Removing the guarantee
Ultimately you do not want the guarantee to be in place for the entire term of the 30 year loan. You should apply to the bank to remove the guarantee when the following conditions have been met:

  • You can afford the repayments without any assistance.
  • Your loan is for less than 90% of the property value (ideally 80% or less).
  • You haven’t missed any payments in the last 6 months.

Most people are able to remove the guarantee somewhere between 2 and 5 years after they initially set up the loan, although this can vary significantly. Because many guarantees are set up because the borrower has no deposit, removing the guarantee most often depends on how much the property appreciates in value and how much in extra repayments the borrower can afford to make. You can still remove the guarantee if you owe more than 80% of the property value however you may have to pay Lenders Mortgage Insurance (LMI) to achieve this.

Get legal and financial advice
Guaranteeing somebody else’s loan is a major commitment and so you should always seek advice from the appropriate professionals such as your solicitor before deciding to proceed.

More information?
If you want to discuss anything here in more detail, or find out which Family Pledge Loan may best suit your situation, please get in touch with me, Tom Uhlich, any time.

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HOW SWEEPING CHANGES TO THE FINANCE INDUSTRY WILL AFFECT YOU?

You have probably noticed in recent months that financial institutions have started to increase interest rates independently of the Reserve Bank’s decision to keep the cash rate on hold.

Not only are interest rates increasing but financial institutions are now starting to significantly change the lending rules and criteria sometimes on a weekly – and even daily – basis.

  • Interest only loans are under scrutiny, for investors AND owner occupiers
  • Preferred lending ratios are decreasing – that means larger deposits are required
  • Lending criteria is tightening, particularly for investors and off the plan purchases – potentially a headache for those who entered into contracts at a more flexible time
  • Bank valuations are starting to come in lower than expected in most states across Australia

If you have been sitting on the fence waiting for lower interest rates or looking to refinance your debt, then your opportunity may already be lost.

We are finding loans that were easily financed only a few months ago are now not being approved by many lenders.

What is driving the constant changes?

At a time of record low interest rates you would expect the news for borrowers to be all good!

Instead, lenders and regulators tend to become very nervous about how borrowers will manage their debt when interest rates eventually rise, so they take steps to lessen the impact.

Bank lending rules are not a set and forget. Lenders introduce changes over time largely due to funding pressures. In addition, APRA (Australian Prudential Regulation Authority) has continued to exert pressure on lenders in an effort to slow down lending in a low interest rate environment.

With constantly shifting goalposts there has possibly never been a more important time to regularly review your home loan and take steps to protect yourself from any future mortgage stress.

What are the signs of potential mortgage stress?

  • If you are living week to week now, you will not survive a rate increase. CALL US URGENTLY before it is too late.
  • If you have multiple investment loans and are highly geared, DO NOT CALL YOUR BANK FOR A REVIEW – you could end up in a worse situation. Call our office.
  • If you have an INTEREST ONLY loan coming off the fixed interest period, CALL US URGENTLY.
  • IF YOU HAVE ANY FINANCE COMING OFF the fixed interest period in the next 3-6 months. Call us.
  • If you have a loan approval in place that is older than 1 month, call us to confirm your approval terms HAVE NOT CHANGED.
  • If your credit cards are maxed out and you are struggling to pay out the balance – yes, you too need to call us.

How can we help?

The reasons that more than 50% of Australian home owners NOW use mortgage brokers are:

  • We do all the research (that takes time and patience) to understand different lending products and can recommend several options for you across many different lenders. Your bank can not do that.
  • We are a professional service provider and we educate you throughout your finance journey with us and beyond.
  • When rapid changes are happening in the world of finance, we are best equipped across the range of lending products to help you identify how to get through these changes and come out singing!

These are interesting times and although we are currently in a low interest rate environment, that doesn’t stop the landscape from changing.

You are best to catch up with us at least every 18 months – preferably every 12 months. Even just a 10 minute phone call to the office may help relieve the stress of not knowing whether you should be taking action.

It is much easier for us to help you BEFORE mortgage stress sets in. Please do not leave it until it’s too late for us to review your finance.

Call the office TODAY because we are going to be busy over the coming months.

If you have friends or family, please forward this article on to them as well. We want to help everyone else you know who has a mortgage to be informed.

Wait – there is good news!

Before you head off from this article, please envisage a relaxing stress free holiday all paid for… to take those finance worries away. Enter our competition for your chance to win this magical holiday.

Every time you share this with your friends and family, you will get more entries. As they say, ‘you gotta be in it – to win it!’

We look forward to your urgent call.

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TEN QUESTIONS TO ASK A MORTGAGE BROKER

Using a mortgage broker to help you choose a home loan can save you considerable time and could result in huge savings. However, before you decide on a broker, you need to make sure they’re going to meet your needs. Here are some questions to ask.

1. How long have you been a mortgage broker?

It may help you feel more comfortable with your decision if you know the person you intend to choose as your broker is experienced and has a solid track record. This question will let you know how long they’ve been a broker and what sort of lending they’re involved in. Also ask them to provide client testimonials, if possible.

2. Are you a licensed broker and a member of a professional mortgage industry body?

It’s important to check a broker’s qualifications and credentials. Major lenders require that brokers complete at least a Certificate IV in Financial Services and either hold an Australian credit licence or be authorised under a licensed home loans aggregator or lender. They should also be a member of the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA).

3. Do you have access to a range of different mortgage lenders?

The mortgage broker you choose should be able to offer you loans from a large number of Australian lenders. Ask how many they have access to and if they can provide you with a full list. That way you can have confidence in their contacts and know that they have a wide selection to choose from. Some brokers only have 20 lenders, some have 40.

4. How do you determine the best lender?

Your broker’s primary job is to source the best home loan for your specific needs. Securing a low interest rate is key, but a broker should also assess your requirements and then present a number of product options. They should be able to demonstrate how they research and rate their selections, and which loan best fits your circumstances.

5. What fees and commissions are you entitled to?

This question may seem blunt, but keep in mind that brokers generate income from every transaction they complete. It’s good to understand how they are paid, and how that may affect you.
The broker must disclose all payments and commissions they receive.

6. How much can I borrow?

As part of the process, a broker should provide an idea of how much you can borrow based on your deposit, income, assets and liabilities. This will help you understand what type of property you can afford to buy.

7. Do you help with first home owners grants?

First-time home buyers may be entitled to government grants and other incentives. Your broker should know what’s available in your state or territory and assist with any paperwork.

8. What’s the best loan structure for me?

A good broker should advise you on which loan structure makes most sense for you. Ask whether a variable interest rate loan is best, or whether you should have a loan with split portions providing both variable and fixed rates.
Does it include an interest offset account, a redraw facility, and should you pay principal and interest, or interest only?

9. What are the next steps?

Ask about the process for getting your loan application underway, including any information and documentation you need to provide them as the intermediary between you and the lender. Your broker should be able to give you a checklist.

10. How long will it take?

This will determine how quickly you can start shopping around. Ask the broker to estimate when you should get pre-approval from the lender and also how long the full approval and settlement process should take from start to finish.

To get the ball rolling on your home loan, talk to a mortgage broker today.

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WILL INTEREST ONLY LOANS BECOME A DINOSAUR OF THE FINANCE WORLD?

Many of the banks in Australia have tightened up their requirements for home buyers keen on an interest-only loan.
Interest only loans are being stopped for Owner Occupier loans and reduced to 80% for Investment loans.
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.

At Boss Money, we have found that switching from interest-only to principal and interest has become increasingly difficult.

What is 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 interest portion of the loan.
That is, they don’t pay down the amount they received from the bank to buy the property – the part that actually pays off what the asset is worth.

By comparison, in principal-and-interest loans the borrower repays both the interest and the amount received from the bank. 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 things like school expenses, holidays and lifestyle.
The interest portion on an investment loan is often tax deductible while the principal portion is not.
Those who have plans to sell the home in the short-to-medium term and are anticipating substantial capital gains could find this attractive.

Why is it seen as risky?

In March 2016, APRA chairman Wayne Byres said the higher proportion of interest-only lending was indicative of a “higher-risk profile” it would be monitoring.

So what is this risk?

Without paying down the principal, the only way an owner can accrue equity in their home is to hope for rising prices, LF Economics co-founder Philip Soos said.

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.
This can “easily cause payments to jump by 20 per cent”, Mr Soos said. If interest rates increased, which would affect all borrowers on variable rate loans, this could climb even higher.
“Basically, interest-only loans are predicated on prices always rising and not falling,” he said.
And while home loans can sometimes be refinanced back to interest only, personal circumstances can change and the property market could fall in value.

There are also concerns that interest-only lending encourages people to borrow more than they would otherwise – particularly when investing, Uno Home Loans chief executive Vincent Turner said.
“In short I’d say that they are, by definition, only applicable when you expect to buy and sell property for a profit with some certainty,” Mr Turner said.
“Someone who is paying interest only is not intending to pay off the loan through normal repayments, but through capital appreciation only. Which adds up in a rising market but not so much in a sideways or dropping market. That is also a risk but to be fair that impacts investors and home owners alike.”

Interest-only borrowers, by definition, don’t pay down the principal and so the home owner is not building a “buffer” into their mortgage. If prices fell the home owner still has to pay off the entire property value and may hold an asset worth less than the loan.

A recent survey of a panel of economists by comparison website Finder found more than half thought those switching from interest-only to principal and interest may face difficulties refinancing.
The panel also anticipated interest rates’ next move would be up – which would leave interest-only borrowers more vulnerable than other mortgage holders because the interest portion would rise more.

What has been changing?

It’s getting tougher for those who want to get an interest-only loan.
ME Bank, Commonwealth Bank of Australia, Westpac, AMP, Citigroup and, now, ING Direct have been among those to make changes to the way they offer interest-only loans.
Some have banned these loans above a certain LVR, and others have significantly increased the interest rates charged on these products.

As Compass Economics chief economist Hans Kunnen explains, banks are now “reining it in”.
Under these changes, some borrowers might find themselves ineligible for an interest-only loan under the changes and may need to “cash out” and sell the property, he said.
Starr Partners chief executive Doug Driscoll said it wasn’t “prudent of banks at all to have lent on so many interest-only loans because the worry is that we are a nation riddled with debt”.
“The market has been massively out of kilter for some time now; it’s an overheated investor market. I’m very pleased with APRA’s recent crackdown because, at the end of the day, people need to be in a position to service their loans,” he said.

There are still many lenders that offer interest only loans for owner occupier and investment at 90%, so if your bank is not offering these, speak to a Boss Money Consultant.

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THE BANK OF MUM AND DAD

The Federal Budget is looming AND there are rumoured initiatives to help first home buyers (FHBs) into the property market. So if you – or your children – are potential FHB’s it might pay to stay tuned…

Housing affordability has been a hot topic as a barrier to entry into the Australian property market. Despite this, the younger generation ARE starting to enter the property market in a variety of ways – as singles, couples, rent investors, in co-ownership and also with help from family.

So if extra government initiatives are possibly in the wings what NEW opportunities might this open up for potential FHBs?

Will you be ready to act?

Going it alone

One of the biggest hurdles for many FHBs is the deposit – on average it takes a working couple 4 years to save 20% deposit1. With price increases in some areas the required deposit could increase faster than it can be saved!

Don’t yet have 20%?

Some lenders will allow you to enter into a home loan with less than 20% however lenders mortgage insurance (LMI) will then apply. LMI covers the lender but is paid by the purchaser. A one-off premium can potentially run into tens of thousands of dollars and is rolled into the mortgage by the lender.

The dilemma for many FHBs is whether paying LMI and getting into the market NOW is more beneficial than waiting and watching prices increase. That’s a discussion that is worth having with us – your finance specialist.

Are there alternatives to 4 years of saving?

The bank of Mum and Dad…

In 2010 the average helping hand from parents was $23,000 – today it is more than $80,0002. In fact the bank of Mum and Dad is one of the fastest growing finance sources in Australia! The percentage of FHBs receiving help from family to enter the property market has more than doubled since the 1970s3.

But parents don’t necessarily have to contribute the whole deposit. If FHBs don’t have quite enough now to avoid LMI family may be able to assist with a guarantor loan for the shortfall to 20% and/or other upfront costs.

Of course not every family is in a position to help nor should we enter into home ownership seeing it as a short term goal. Saving the deposit is just the start – home ownership will probably require trimming expenses and making sacrifices for the foreseeable future.

If added incentives become a reality it’s certainly worth doing the sums to see if this may assist you to take action sooner.

Interest rates remain at an all-time low but they WILL increase at some point. While lenders generally determine loan serviceability on a higher rate it may be preferable to borrow less than you can afford to build in breathing space. Other strategies worth considering might include:

  • Your FIRST property doesn’t need to be your dream home. Perhaps consider entering the market with a smaller, cheaper property? If you rent it out while continuing to live at home and save you may find your savings plus equity over time will assist you towards your dream home.
  • Consider co-ownership with family or friends now with a view to going it alone further down the track.

The most important step is to DO YOUR HOMEWORK. As your finance specialist we can help you explore any new initiatives and options that may be suitable to YOU and your individual circumstances.

1. CoreLogic RP Data (based on two incomes across all states)
2. digitalfinanceanalytics.com
3. HILDA Release 15

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.

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SHOULD YOU PURCHASE RESIDENTIAL PROPERTY THROUGH A SMSF

SHOULD YOU PURCHASE RESIDENTIAL PROPERTY THROUGH A SMSF?

SHOULD YOU PURCHASE RESIDENTIAL PROPERTY THROUGH A SMSF
Let’s face it, buying a house is an exciting achievement. Many Aussies dream of growing their wealth through property investment. And given Australia’s real estate market grown and grown over two decades, who wouldn’t?

Luckily, if you dream of joining the property-investing elite, there are ways to do so. Buying a house through your self-managed super fund (SMSF) is a great way to enhance your wealth and create a comfortable retirement.

But before you dive into that seemingly perfect investment, you need to know whether buying a house through your SMSF is right for you.

Diversify your assets

If your SMSF has enough assets, purchasing a residential property is a great way to further diversify your investments. Ensuring you have diversified investments is an important strategy to mitigate potential losses. Put simply, if the market falters, or one of your investments fails, you want the rest of your portfolio to have your back.

Earn extra protection through hard-to-get loans

It is more difficult to obtain a loan through a SMSF than a regular loan. While this may seem like a drawback, it’s actually a benefit because it provides a little extra protection on what can be a risky investment. SMSF loans are limited recourse loans, which means that if your property investment fails, the rest of your fund is not at risk. This, in turn, makes lending rules stricter and you’ll need to put down a larger deposit of at least 20-30%. Thankfully, a smaller loan also means the fund will pay the loan off quicker.

Enjoy great tax incentives

Despite generally yielding lower rental income, well-bought residential properties typically appreciate in value more than commercial properties. So if you hold onto your residential property long-term, your fund could make more money. If you sell, capital gains on SMSF investments are taxed at the rate of 10%, providing you’ve held the property for over one year. However, if you decide to sell your investment once you’re drawing a pension from the fund, the property will be exempt from capital gains tax.

Rental income is taxed slightly higher at 15%. Again, you can enjoy tax-free rental if you’ve already retired!

Don’t buy from family and friends, or let them live there

Buying a property is never simply sunshine and roses. There are rules you have to follow. You can’t buy a property through your SMSF from a person you know, like a friend or family member. Nor can you let them live there, or live there yourself. The same goes for a holiday home – no one you know can stay there. Ever.

There are very strict laws around this – and breaching them is never worth the risk. On the upside, these rules are designed to protect your fund by ensuring transactions are made on a commercial basis and with wealth accumulation in mind.

It’s important not to get caught up in the excitement of buying a residential property. It’s vital that you carefully consider whether buying a residential property through your SMSF is right for you. For more information about SMSFs contact a Boss Money Consultant today.

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OVER 60% OF CLIENTS ARE FIXING THEIR HOME LOANS

OVER 60% OF CLIENTS ARE FIXING THEIR HOME LOANS
Since the Trump election win we have found that 63% of clients are choosing to fix their home loan. This has increased further over the last 2 weeks as Banks have decided to increase their variable rates, outside of any RBA rate change. The most popular is fixing 50% and keeping 50% variable with an 100% offset to help pay that portion down. I guess it could be seen as hedging your bets!

This was very similar to what occurred after the GFC, as those with low risk appetites decided to fix their loans. The only issue being the variable rate dropped significantly meaning most were left paying much more for the fixed portion of their loans. That’s the risk you take.

When considering a fixed rate, it is important to work out why you want to fix. Don’t fix because you think rates will go up or down. That’s like gambling and it is very tough picking the market nor beating the banks. This is their game and 9 times out of 10 they win. Fix because you want security of knowing your repayments will be $X over the next X years. If you want your cake and eat it, then fix a portion (for security) and leave the rest variable for some flexibility.

End of the day, with all loans, it really depends on a client’s individual needs and circumstances. Everyone is so different and if I had 10 people in a room, I am 100% sure each would get a different loan structure, different lender and different product.

As a comparison, at time of writing the best rates (for a $500k Owner Occupier loan @ 80%) were:

Variable 3.59%
1 Year Fixed 3.69%
2 Year Fixed 3.65%
3 Year Fixed 3.64%
4 Year Fixed 3.74%
5 Year Fixed 3.99%

If you want your loan requirements reviewed, flick Tom a quick email tom@bossmoney.com.au or call on 0476 111 000.

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THE PATH TO SUCCESSFUL PROPERTY INVESTMENT

path-to-successful-property-investment
Property has been considered a popular path to wealth 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.

Do your homework

You are not buying from the heart, but from the head, so it 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).

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.

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.

Choose the right loan

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 best loan type will be dependent upon your individual circumstances so it is best to talk to us.

Find out how much you can borrow

This is an essential step to be realistic in your expectations and focus your property hunting time on properties you can afford.

Calculate your up-front costs

Remember to factor in stamp duty, loan application fees and legal costs into your plans. A building and pest inspection are also a must to avoid expensive headaches down the track.

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 wont receive rental income straight away).

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!

Find a good property manager

It could be a good idea to look for personal recommendations from tenants and landlords you may know.

Cover yourself with suitable insurance

Some insurance companies now combine building cover with specialist landlord insurance. You should also consider life and income protection insurance to ensure your family doesn’t suffer financial hardship loans if the main income earner is unable to work.

 

Kind Regards,
Tom Uhlich
Boss Money

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IS THERE LIFE AFTER CHILDCARE FEES?

is-there-life-after-childcare-fees
When we live in a busy and expensive world we are often so focused on the money going OUT of our pockets that we sometimes don’t notice what’s coming IN.

When you stop and think about it, there are a number of events in our lives when we DO actually have financial wins but because of our busy lifestyles we often don’t register them.

A change in financial circumstances could start as early as when your children grow out of nappies. Did you know that from birth to toilet training the average amount spent on disposable nappies alone is over $3,250¹ per child? And that doesn’t include additional costs such as prams, cots, car seats, medications, baby wipes, creams, dummies, bottles, formula etc. The list goes on!

So what happens to that $135+ each month when your kids are toilet trained? For most of us it simply gets absorbed into our daily living. Instead, it could be a great opportunity to start paying down your mortgage and increasing your equity so you can start planning your steps into property investment.

What’s next? Our kids progress to ‘BIG SCHOOL’!

‘Big school’ means a lot of things, however from a financial perspective it usually means NO MORE CHILDCARE FEES!

When the median cost of 50 hours of long day care nationally is $364², even with a rebate it is not unusual for parents to spend a minimum of $10,000 per child per year on child care. In city areas this can blow out to $19,000 or more! What difference would it make to YOUR mortgage if you were able to redirect those funds to additional mortgage repayments?

The start of school is also an opportunity for a lot of parents to increase their hours of work or return to the workforce on a part or full time basis. This can also have a significant effect on family income and lifestyle.

So if you are one of around 270,000³ parents with a child starting school in the new year what are you planning to do with the extra cash you may find you have to ensure it does not simply disappear into your everyday spending?

It’s a great time to review!

When your children start school and/or your employment circumstances change it is always a great time to re-assess your overall financial situation.

Over the years, having worked with many clients who have young children, we have at times observed the following may occur as they adjust to the additional costs associated with raising young children:

1. mortgage payments are reduced to minimum levels,
2. personal debts and/or credit cards build up,
3. they have limited refinancing options due to lower income levels, and/or
4. investment plans or decisions are placed on hold.

‘Investments are typically the first item we see families put on hold while their children are young.’

We have also observed that when our clients re-enter the workforce many forget that they actually managed quite well on a lower income level. Instead of investing, saving or paying off debt any additional cash flow is often absorbed into their new daily lifestyle, holidays or new cars.

With both parents working and the elimination of childcare fees, an investment property may become an affordable option. Remember you don’t need to pay off your own home before considering an investment property. Depending on your individual circumstances we may be able to assist you to structure your finances to help you pay off your home sooner by investing in property. Sounds weird doesn’t it?

‘People often underestimate their potential to invest.’

Even if you think this doesn’t seem like a possibility for you, why not call us for a chat anyway? You may just be surprised at how close the dream could be. Remember, it is never too early to start planning!

1. babybeehinds.com.au 2. pc.gov.au/2014 3. abs.gov.au/ausstats

 

Kind Regards,
Tom Uhlich
Boss Money

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BANKS INCREASING FIXED RATES

banks-increasing-fixed-rates

The Commonwealth Bank of Australia is lifting rates on fixed term owner occupied and investment loans by up to 65 basis points, reports Boss Money.

The rate hike comes following increases by Westpac, ING, National Australia Bank and numerous other smaller lenders, at a time of growing uncertainty in the lending market.

This was reflected last week when Australian Broker reported on the growing gap between the most expensive and the most affordable loan rates for residential property, which has now widened to nearly 240 basis points.

Lenders have been citing “increased costs of funding” as one of the main drivers of the increases and, something many are attributing to the “Trump effect”, with CBA following suit.

The changes affect customers taking out new fixed-rate loans on two, three and five year fixed rate products for owner occupier and investor home loans, and CBA is blaming a mix of international and domestic reasons that have occurred in recent months for the rises, such as rising costs on global capital markets for loan swaps, which influence long term home loan product pricing.

“In the past two months swap rates have risen significantly, which has increased the cost of providing some of our fixed rate home loan products,” Dan Huggins, executive general manager of home buying said.

In monthly repayment terms, CBA’s rate increase will mean a rise of more than $355 for a borrower with a 30-year fixed loan paying the new rate of 4.74%.

Two-year fixed rates will rise 0.15% to 3.99%, while standard five-year fixed rates will increase 0.6 % to 4.74%. Three-year fixed loans are up by 20 basis points to 4.09%.

The Reserve Bank of Australia’s recent figures show continued strong growth in investor loans, and CBA’s changes show that the major, like other banks, is also rushing to attract investors with better deals.

The bank has decreased its interest rates on four-year fixed rate products for both owner occupier and investor home loans by 20 basis points to 4.54% for the standard rate and 4.39% for the packaged loan.

If you want to look at fixing your loan, please contact Boss Money for a quick review on what your lender is offering and how that compares to the best rates in the market.
 

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Tom Uhlich
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REAL ESTATE CHEAT SHEET

real-estate-cheat-sheet
If buying or selling for the first time, you might be bamboozled by all the real estate jargon bandied about. Here is our A-Z guide to what it all means.

ACCRUED DEPRECIATION

The total depreciation of a property over a period of time. Usually the difference between the replacement value at purchase and its present appraised value.

APPRECIATION

An increase in a property’s value over time. Property can appreciate in value due to increased demand, inflation and/or interest rate changes.

AUTHORITY TO SELL

The official contract a vendor signs to give an agent permission to sell a property on their behalf. The contract also usually details the agent’s fees and any advertising costs.

BREACH OF CONTRACT

When a seller or buyer dishonours one of more of the conditions in the sale contract, such as a vendor failing to make agreed repairs or a buyer changing their mind after the cooling-off period.

BRIDGING FINANCE

A short-term loan to help cover costs between selling one property and buying another.

BUYER’S ADVOCATE

Also known as a buyer’s agent, this is a licensed professional who negotiates the sale on a buyer’s behalf. Think of it as the opposite of a regular real estate agent, who works on behalf of the seller. A buyer’s advocate can also help source property for you.

CAVEAT

A legal notice that someone (the caveator) has claimed a particular unregistered interest in a property.

CERTIFICATE OF TITLE

The legal document certifying property ownership. If you have a mortgage, your lender will hold the certificate until your loan is repaid.

CONVEYANCING

The area of law that deals with the transfer of property from one party to another. Your conveyancer represents your interests as a buyer or seller. They will prepare the contract of sale, research the property and its certificate of title, calculate any owed rates and manage settlement with the lender.

COOLING-OFF PERIOD

A period in which a buyer can legally withdraw from a property sale. Different states and territories have different cooling off periods and a termination penalty may still apply if you withdraw. There is usually no cooling-off period when you buy at auction.

COVENANT

A condition placed on the use of a property, such as a height restriction or a stipulation about building materials.

DEPRECIATION

The wear and tear on a building or fixtures, which you can claim on your income tax if your property is for investment and built after July 1985. You will need a quantity surveyor to prepare a schedule of depreciation on your property to calculate how much you can claim.

EASEMENT

A section of land registered on a property title that someone is entitled to use even though they are not the owner, e.g. a shared driveway.

ENCROACHMENT

When a neighbour violates the rights of an adjoining property owner by building something on their land.

ENCUMBRANCE

A restriction or notice placed on land, which is usually listed on the certificate of title. A covenant is an example of an encumbrance, as is an easement (see above). Governments can also register an encumbrance on a property to let buyers know of a prior land use.

EQUITY

The value built up in a property minus any money owed.

LENDERS’ MORTGAGE INSURANCE (LMI)

The cost of securing a loan when you need to borrow more than 80 per cent of a property’s value. LMI covers the lender’s risk should the property value fall, even though the insurance is paid by the borrower.

NEGATIVE GEARING

Borrowing money to buy an investment property and the cost of owning that property (interest repayments, rates, repairs etc.) is more than the income received from rent. In other words, you make a loss, which can be claimed against your income tax.

OFF THE PLAN

Buying a dwelling, usually an apartment, before it is built.

STRATA TITLE

Ownership of an individual unit in an apartment or townhouse complex, which also has shared areas, such as a driveway, garden or swimming pool. These shared areas are owned and maintained collectively with the other unit owners.

TENANTS IN COMMON

When two or more people own a property and each person’s ownership interest is specified as a certain percentage.

TITLE SEARCH

A title search researches the historical and current ownership and usage of a property.

TORRENS TITLE

When a purchaser owns both the house and the land on which it is built. This is the most traditional form of home ownership in Australia.

ZONING

The usage category applied to a parcel of land by a local council or other government authority. Zoning will determine, for example, if you can build units or operate a business on a property.

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MORTGAGE CONSULTANT VS THE BANK

Mortgage Consultant Vs the Bank
So many of my clients have been going straight to their own bank for years before finally coming to see the Boss.

There are countless reasons why it pays to use a mortgage consultant when shopping for your home loan, and even if you want to use your own bank for your mortgage, you can still use a consultant to help process paperwork and manage the application on your behalf, plus there is no direct cost to you.

But if your heart’s not set on using a particular lender, a consultant can be your best friend. Here are my six arguments as to why every borrower should seek out a qualified mortgage consultant when trying to obtain property finance:

1. Choice

When you sit in front of a consultant you are sitting in front of 40+ banks and thousands of products versus visiting a banker who has access to only one bank’s products.

2. Experience

Ask your lending manager how long they’ve been helping people with home loans. Consultants often own their own businesses and are committed to their clients in the long term, with many years of industry experience. Banks are big companies; they move their staff around and reward good performers with promotions away from their customers. If a consultant doesn’t find you the best deal and you don’t take the loan with them they don’t get paid! It is in their interest to find you the best deal.

3. Follow Up

Following up the progress of your loan application is time consuming and frustrating. At Boss Money our Client Care Managers look after you from lodging the loan to settlement and beyond. A Bank will do the loan and then you are on your own to make sure everything comes together at settlement. Dealing with the bank can often mean dealing with a call centre from another country.

4. Personal Banker

Your mortgage consultant is ‘like the perfect personal banker’ . They know what needs to be done, they make sure it happens and because it’s their own business, they’re in for the long haul. Bank staff change often so even when you find a good personal banker they change jobs before you know it.

5. Expert advice

Mortgage Consultants are experts in the mortgage industry, they only focus on mortgages whereas a bank focuses part on mortgage but also on transaction accounts, credit cards, insurance, personal loans and car loans.

6. Power of accessibility

Mortgage Consultants understand the power of accessibility – our priority is our clients, and if that means working with you outside of the Monday to Friday, 9am to 5pm, then we will do it. How many banks will come out to your house at 5pm on a Sunday? Or attend an auction with you? Or take your desperate call at 10pm.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a Boss Money Mortgage Consultant can help. Access loans from 40+ lenders, get help with paperwork – plus there is no charge for this service.

 

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Tom Uhlich
Boss Money

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HOW DOES A MORTGAGE CONSULTANT GET PAID?

How does a Mortgage Consultant get paid
Our services are free, as we get paid by the lender for doing the work that would otherwise be done by a bank manager and more often than not, can get you a better deal than going to the bank directly.

Did you know that some larger mortgage consulting companies are part owned by one of the banks?

We are privately owned and can arrange loans with the four major banks as well as several reputable non-bank lenders.

 

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Tom Uhlich
Boss Money

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WHY USE A MORTGAGE CONSULTANT?

Why use a Mortgage Consultant
A Boss Money Mortgage Consultant is a home loan expert. Given that a home loan/mortgage is probably the biggest exopense you will ever have, it pays to get free professional assistance and advice.

Banks only have access to their own range of products, so would they tell you if another bank had a better deal? No way! A Boss Money Mortgage Consultant has access to thousands of products from over 40 lenders, including the big 4 banks. Essentially, they help you avoid taking out a loan you might later regret.

 

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Tom Uhlich
Boss Money

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WHAT IS A MORTGAGE CONSULTANT?

what-is-a-mortgage-consultant
A Boss Money Mortgage Consultant will evaluate your needs to get a detailed picture of what you need from a home loan. They can calculate your borrowing power so you know what you can afford. Then from a panel of 40+ lenders they will compare all the loans to find the right one for you, NOT the bank.

We do all the legwork and look after the entire process from lodging the loan to settlement.

ALL of this at no cost to you, a completely free service, that doesn’t affect the loan you receive and 9/10 we can get you a better deal than if you went straight to the bank.

 

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Tom Uhlich
Boss Money

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WHAT ARE GENUINE SAVINGS? GET APPROVED TODAY

WHAT ARE GENUINE SAVINGS GET APPROVED TODAY
Genuine Savings For A Home Loan Deposit Explained

Just when you thought that you could get the best home loan deal by simply having a lump sum of cash, you might have to think again. Not all cash deposits are acceptable in applying for a home or investment loan when your deposit is less than 20% of the purchase price.

These days you can obtain a home loan with as little as a 5% deposit. That means a bank can lend you up to 95% of the purchase price.

If you are considering applying for a home loan with a deposit that is less than 20% of the purchase price then here are some of the things that you need to know. At least 5% of your deposit needs to be made up of genuine savings.

1. What exactly are genuine savings?

These are savings that are held or accumulated in a savings account for at least three months.

2. What other assets might be considered as genuine savings?

Other assets that can be considered as genuine savings are term deposits, shares, and equity in property that are held for at least three months.

If you have any debts, e.g. a personal loan, and you have been paying extra off your debt above the minimum requirement, you can use this extra repayment towards your genuine savings calculation.

If you are currently renting for 12 months or more through a Real Estate agent, you may be able to use those rent payments towards your genuine savings calculation as well. Please contact us to discuss your personal circumstances to see if you qualify.

3. What does not qualify as genuine savings?

Gifts from parents
Tax refunds
Income Bonuses
Inheritance money
Cash kept at home

If any of these apply, we recommend that you place those funds into a personal savings account and hold them there for three months to qualify.

4. How much do I need for a home loan deposit?

You can obtain a home loan with as little as a 5% deposit. The major lenders may provide a mortgage up to 95% of the value of the property. In some instances you may be able to borrow the whole amount, contact us to see if you qualify.

5. Can I buy a property if I don’t have genuine savings?

We have access to lenders where you can borrow up to 95% of the purchase price without having genuine savings. Of course you still need to come up with at least a 5% deposit plus funds to complete (stamp duty, legal costs etc). Contact us today, simply click the ‘Message’ button above and our home loan specialists will answer all your questions and assist you with finding the right home loan for your situation.

 

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Tom Uhlich
Boss Money

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WHAT IS A MORTGAGE OFFSET ACCOUNT?

WHAT IS A MORTGAGE OFFSET ACCOUNT
An offset account is a transaction account that can be linked to your home or investment loan. The credit balance of your transaction account is offset daily against your outstanding loan balance, reducing the interest payable on that loan.

Offset accounts enable you to make the most of your income and other funds to reduce the interest payable on your home loan, thereby reducing your loan term.

How an offset account can work for you:

A customer with a $150,000 home loan over 30 years would pay approximately $167,190 in interest.

If the customer had an offset account linked to the home loan for the entire loan term with a constant balance of $10,000 in it, they would pay the loan off in 26 years and 4 months and pay just approximately $127,553 in interest.

This represents a saving of three years and eight months and approximately $38,636.95 in interest.

Please note: These figures are based on a Standard Variable Rate of 7.36% p.a.

We not only assist our clients with finding the right loan for their situation, but our post settlement service is second to none. Post settlement we help our clients and show them how to correctly set up their banks accounts and how to link them the right way with their loan accounts.

Click the Contact Us tab above and ask us which lender is offering the right loan for your situation! (We have access to all the major banks and many other leading lenders).

 

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Tom Uhlich
Boss Money

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WHAT IS AN EQUITY LINE OF CREDIT?

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.

For more information please click the ‘Contact Us’ tab at the top to request a specialist finance consultant to call you.

We start with a review on your current situation, answer any of your questions and explore any opportunities available to save you money and/or invest.

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Tom Uhlich
Boss Money

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HOW DO I PAY OFF MY MORTGAGE SOONER?

HOW DO I PAY OFF MY MORTGAGE SOONER

Pay more, more often.

Want to pay off your mortgage early? Then make bigger mortgage repayments, more frequently. You’ll own your own home sooner and save a bundle on interest.
E.g. paying an extra $10 per week on a $350,000 home loan (@7% average) saves nearly two years off your mortgage and $34,382.65 in interested expenses

Act now – you pay most interest up front

Most mortgages are structured so that you pay off most of the interest in the early years. If you are serious about wanting to reduce the interest you pay on your Home Loan, you’ll act now.

Get rid of car loans and credit card debt

You’re generally paying a higher interest rate on small loans (e.g. a car) and your credit cards so it makes sense to eliminate those debts first. So, put a rein on your credit card usage and then tackle your mortgage.

Make sure you’re paying off the right mortgage

When you entered the mortgage market, you might not have been as well informed as you are now. Or the market might not have been as competitive. Stay in close contact with with us to stay informed you have the right loan. I can can let you know if there is a new home loan product that will save you money over the term of the mortgage.

Flexible mortgages

Most debt-retirement strategies depend on you being able to pay off more of your mortgage sooner. Read the fine print or talk to us to see if you have the flexibility you need to reduce your interest charges.

Pay more and pay often

Assuming you have a mortgage that lets you pay extra, you should pay more and pay often. The interest charged on a $ 300,000 home loan at a rate of 7.15% over 30 years with monthly repayments is over $420,000. By paying off an additional $50 a month, you’ll reduce the interest bill by $39,000 and your loan term by 2 years and 4 months. You could look at making repayments weekly or fortnightly rather than monthly. Over 30 years the savings add up. To learn more, talk to us today today.

Information source: MFAA

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PREVENT A NASTY PROPERTY SURPRISE

PREVENT A NASTY PROPERTY SURPRISE
HOMEBUYERS and real estate investors are being warned to watch out for the hidden traps that may be lurking in their potential purchases.

Leaky showers, cracked ceilings and self-opening doors and among the signs pointing to bigger and more costly “nasty surprises”, the Association of Building Consultants says.

Spokesman Chris Short says understanding a building’s condition and the likelihood of future repairs is vital when assessing a property purchase and managing a mortgage.

“Many homes are tidied up for sale, with the pre-sale spruce ranging from a basic clean through to bogging cracks, repainting, retiling and re-grouting, and even new floor coverings,” Short says.
“The makeover might look good, but it also masks what might be more sinister problems such as termite damage, salt damp, structural issues, unlicensed and dangerous electrical work, and more.
“For example, a leaky shower might seem harmless on the surface but if the leak is allowing water to flow into the soil next to your home, it’s likely to attract termites.”

Short says building inspections can be particularly valuable for investors who will not be living in the property they buy.

“You need to know it well so that you’re clear about urgent maintenance requirements to meet your obligations as a landlord – such as ensuring smoke alarms are hardwired – and the cost of long-term maintenance,” he says.

Property academic and author Peter Koulizos says beginners should always consider a building inspection.

He adds to make sure the report is a written one, rather than a verbal agreement.
“Some of my students have been able to negotiate the contract down by the repair amount or they have just pulled out,” he says.

Koulizos says when entering any property, potential buyers should take in a deep breath.
“If there is a musty smell, it’s a sign of salt damp,” he says.

Another thing to check is the perimeter of the house and make sure there are paths surrounding it.
“You can minimise cracking by keeping the moisture content of the soil fairly constant,” Koulizos says. “Paths around homes are not just there for decoration.”

HIDING A BIGGER PROBLEM?

  • Cracks in ceilings and walls are hallmarks of footings sinking or rising, which causes the walls to flex.
  • Other signs are doors out of square in their frames, self-closing and self-opening doors.
  • Leaking hot water services, rainwater tanks and airconditioning pipes can create moisture that attracts termites.
  • New floor tiles installed over old tiles can trap moisture between the tile layers.
  • Cracked tiles and mould at the shower base and plaster bubbling on the wall in the room next to the bathroom are also signs of moisture.
  • Any repair work to the building’s paths can provide an entry point for termites.

Source: Association of Building Consultants

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Tom Uhlich
Boss Money

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WHAT’S A BETTER STRATEGY TO ACCESS EQUITY: TAKE OUT A LINE OF CREDIT OR JUST TOP UP A LOAN?

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 $80,000 home loan and you took out a $20,000 investment loan, your total single loan amount would be $100,000. This would equate to a ratio of 80% personal debt to 20% investment debt.

The challenge is that if you wanted to make accelerated repayments onto your home loan you would simultaneously be wiping out your investment debt.

This would mean that every time you made a $1,000 principal repayment (not taking into account the interest portion charged) you would be – staying with the example of 80/20 – reducing your home loan by $ 800 but also wiping out $ 200 of the investment debt.

Why is this bad?

Well, if you had a home loan for $100,000 and an investment loan of $100,000, it would make sense to discard the home loan first since it is not tax deductible.
A great set-up would be to have both loans as interest only.

Attach a 100% offset account against the home loan and drive all of your extra income into the offset account to eliminate interest repayments on your home loan. This also gives you the choice (should you ever move out of your home) to take all of the money out of the offset account and buy a new home, and instantly the entire interest is charged again against your old home, making it now tax deductible. It is never a clever idea to top up your home loan for investment purposes.

A better strategy:

So how do you get around this without using your home as security against a new investment purchase?

It’s simple: you apply for a separate loan against your home.
Using the previous example, you would leave your $80,000 home loan in place and apply for a separate loan of $20,000 for investment purposes.

This also makes accounting very simple because now you know which loan is for investment purposes and what to provide to your accountant at tax time.

If you are accessing equity from a property that you are already renting out, meaning that the existing loan is already tax deductible, it is still a good idea to use a split loan.

From an accounting perspective it makes it easier to know which expenses belong to which property.

This serves a number of purposes. From a business point of view, you can review your properties and work out what their holding costs are and their overall performance.

Also, if you decide to sell any of your properties, you know which loans belong to which property and you can make a choice to either wipe out those loans or, from the sale, reduce one of the smaller loans to zero without paying it out, providing you with redraw capability should you wish to buy again (effectively turning that loan into a line of credit type function).

Using line of credit:

Line of credit loans, in my view, are a good tool for two reasons.

Firstly, they are great to have as a buffer. In cases of emergency repairs, etc., there is instant access to funds to assist you.

Secondly, they provide instant access to cash, should there be a property-buying opportunity and you require funds quickly for a 10% deposit.

The negative aspect of a line of credit is that it can be more expensive than a normal investment loan. There can also be a negative impact on your borrowing power if you have a large line of credit. This is because a line of credit is like a gigantic credit card with a limit.

Let’s say you have a $200,000 line of credit with zero owing.

Lenders, at the time of an application for new finance, will consider repayments as if the entire line of credit is drawn, therefore drastically diminishing your capacity to borrow. This could mean the difference between being approved or declined for finance.

A balanced approach is needed: a line of credit limit that takes into account your income and expenses position, leaving sufficient surplus funds from your monthly income (assuming your line of credit is fully drawn) to ensure a fresh loan application would be successful. A competent banker or consultant can assist in calculating various scenarios to ensure your strategy works for you.

One way to get around a line of credit is to simply take out a normal interest-only investment loan. For example, instead of taking out an $80,000 line of credit, apply for a cheap, no-frills investment loan.

Once the money is available to you, simply transfer the $80,000 onto the loan, reducing the balance to zero.

No interest is charged, and, if you require funds, simply use redraw for access. This way you have a low-cost loan with a line of credit functionality.

All these matters require forward thinking and planning. Take into account your overall goal and strategy. Devise a plan and then research the finance market, or seek expert advice to ensure that not only can you execute your plan today but you don’t get stuck at your next intended property purchase due to poor research, planning and execution.

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Tom Uhlich
Boss Money

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PROPERTY TO SPRING INTO ACTION

PROPERTY TO SPRING INTO ACTION
Welcome to the Spring market!

It’s the busiest time of the year for our industry and an exciting time for buyers and sellers, as more properties come onto the market and sales activity increases.

In Sydney, this Spring is going to be very important. The city has experienced a significant shortages of homes for sale all year, and hopefully, Spring will end the drought.

According to the latest stats from CoreLogic, new listings in Sydney are down 27% on last year. By comparison, new listings in Melbourne are down 16% and Brisbane listings are down 5%.

Stock shortages make life very hard for buyers and sellers, because although sellers can usually sell at a premium, the trouble is buying back in. They don’t want to risk having to rent and move house twice, so many hold off.

That leaves buyers having to compete for a very small amount of stock. It’s very frustrating, and sometimes, they have to pay much more to secure their new home.

Eventually, this market stand-off ends and Spring should provide the impetus this year. People love selling in Spring, they love the change of season and they’re generally aiming to buy again in time to enjoy Christmas and the end-of-year school holidays in their new home.

Clearance rates will be an important market indicator to watch this Spring.

Sydney’s weekend clearance rates have been high all year – I’m talking boom-level high – in the 70-80% bracket for most of 2016.

If there’s a substantial lift in stock, it will be interesting to see if the clearance rate holds firm, or starts to fall. A fall would indicate supply is starting to meet or exceed demand.

Over the past few years, the pattern we’ve seen is a rush of new stock in September, with even more homes coming onto the market in October/November, at which point we get a softening in prices. In the New Year, old stock gets absorbed and we go back to a state of demand exceeding supply by around March.

Some time soon, after four-and-a-half years of boom growth in 2012-2015 and steady growth in 2016, that’s going to change. I don’t know if 2017 will be the year in which we see a return to truly normal market conditions, but I can guarantee that change is coming soon. That’s the nature of cyclical markets like property.

One interesting trend for Spring this year is the spike in the number of apartments for sale, mainly in Sydney, Melbourne and Brisbane.

This was entirely expected and it usually always happens after a boom.

When markets boom, developers begin building, but the long process means there’s usually a hangover of great new stock that hits the market after the boom ends. Not only that, there’s also the risk that some people, especially investors who purchased off-the-plan a year or so ago, won’t complete their purchase because they start worrying about the oversupply effect, not just on their asset’s value, but also its rentability. So they sell too, which adds more stock to the market.

New research from CoreLogic shows that across the combined capital cities, about 36% of homes for sale in July were apartments, compared to 26% five years ago.

In Sydney, about 45% of homes for sale were apartments, up from 40% last year and 35% in 2011. In Brisbane, 26% of homes for sale were apartments, up from 22% last year and 19% in 2011. In Melbourne, almost half or 49% of all properties for sale were apartments. A year ago it was 42%, and in 2011, it was 29%.

It might sound like our east coast cities are facing a massive oversupply, but it’s important to remember than the bulk of apartment development right now is centred around CBDs and inner-city suburbs. These are prime locations and highly desirable over the long term. I see great opportunity for apartment owner-occupiers over the next two years. You’ll be spoilt for choice and have negotiating power on your side.

The overall prediction for Spring 2016 is a strong season, with early Spring sellers benefitting most from the shortage of stock that will probably still be felt in September.

There will be a pause in the market over the school holidays in late September/early October, before the bulk of Spring’s new listings come onto the market.

Source: http://switzer.com.au/the-experts/john-mcgrath-property-expert/property-to-spring-into-action/

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5 IMPORTANT REASONS WHY YOU NEED LIFE INSURANCE

5 Important Reasons Why You Need Life Insurance
Insurance can be confusing and it’s hard to know what you really need or want. But here are five very good reasons why you need life insurance.

As we grow older, get married, build families and start businesses, we come to realize more and more that life insurance is a fundamental part of having a sound financial plan. Depending on your type of policy, life insurance is fairly cheap, which means there’s no excuse not to get coverage now. Plus, over the years, you’ll find comfort in knowing money will be available to protect your loved ones in the event of your passing. Here are a few other reasons why having life insurance is important.

TO PROTECT YOUR FAMILY AND LOVED ONES

If your loved ones depend on your financial support for their livelihood, then life insurance is a must, because it replaces your income when you die. This is especially important for parents of young children or adults who would find it difficult to sustain their standard of living if they no longer had access to the income provide by their partner. You will also need to provide enough money to cover the costs of hiring someone to cover the day-to-day household tasks, like cleaning, laundry, cooking, childcare and everything else a growing family needs.

TO LEAVE AN INHERITANCE

Even if you don’t have any other assets to pass to your heirs, you can create an inheritance by buying a life insurance policy and naming them as beneficiaries. This is a great way to set your kids up for a solid financial future and provide for any monetary needs that will arise.

TO PAY OFF DEBTS AND OTHER EXPENSES

In addition to providing income to cover everyday living expenses, your family needs insurance to cover any outstanding debts, like the mortgage, credit cards and car loans. Other expenses include funeral and burial costs that can easily run into the tens of thousands of dollars. You don’t want your spouse, parents, children or other loved ones to be left with any extra financial burden in addition to the emotional burden they’re already suffering.

TO ADD MORE FINANCIAL SECURITY

Like most parents you probably want to know your kids will be well taken care of when you’re gone. You not only want them to get a quality college education, but to provide for other life ventures like getting married or starting a business. For this reason, additional coverage is absolutely essential while your kids are still at home.

TO BRING PEACE OF MIND

We can’t know when we’ll pass away. It could be today, tomorrow or 50 years from now, but it will happen eventually. No amount of money could ever replace a person. But more than anything, life insurance can help provide protection for the uncertainties in life. Without a doubt, having life insurance coverage will bring you and your family peace of mind. It’s one thing you can be sure of and you’ll no longer have to question whether they’ll be taken care of when you’re gone. Life insurance protects your heirs from the unknown and helps them through an otherwise difficult time of loss.

Source: https://www.payoff.com/life/money/5-important-reasons-why-you-need-life-insurance/

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6 REASONS YOU SHOULD INVEST IN INCOME PROTECTION INSURANCE

Why You Need Income Protection

Why You Need Income Protection

You can’t underestimate the importance of peace of mind. It’s easy to think your income is going to be a permanent fixture in your life – if you’ve got a stable job, why should you worry about losing your stable income, right?

Unfortunately, you can’t predict the future. While we all feel invincible, accidents and illnesses can happen. Should you fall ill or sustain a nasty injury, you may find yourself unable to work. We have prepared a simple and convenient list of those 6 things you need to know to understand why it’s important to have Income Protection insurance.

1. Income Protection guarantees ongoing quality of life

There’s nothing better than having the assurance that your finances will be covered, no matter what happens to you. Income Protection insurance brings you this guarantee: if you suffer a serious illness or injury, you will have financial protection that will keep you afloat until you can get back to work. Income Protection can provide up to 75% of your gross earnings.

2. It provides peace of mind for you and your family

It’s never easy to raise a family. With a couple of kids, you (and often your partner as well) have to work extra hard to give them a comfortable life.

If you find yourself incapacitated and unable to work, that loss of income can substantially impact on your family’s finances.

Thanks to Income Protection, you won’t have to worry about the implications of losing an important income. Your family can rest easy that you will all be cared for, regardless of the situation.

3. It allows you to keep up with repayments

When you’re seriously ill or injured, the last thing you need is to worry about debts. It can be stressful to think about how you’ll cover daily expenses, let alone pay off a mortgage, a car loan or credit card debts.

Income Protection can be a great help to people who need to keep up with any debt repayments. By supplying up to 75% of your income, it can ensure your debts will be paid so you can get on with the task of recovery.

4. It can provide an extra level of protection

Income Protection can be a great supplement to other insurance plans. While it’s important to keep yourself covered in case of an unforeseen death, an Income Protection plan can help keep you covered in case of unforeseen disabilities that could keep you from working and making a consistent income. You can purchase Income Protection insurance as part of a Life Insurance package.

Income Protection can also be a valuable supplement alongside a worker’s compensation cover like WorkCover. Not all workplace injuries are eligible for WorkCover compensation (since they have to be a result of the employer’s negligence), so having Income Protection gives you an added level of protection in any event.

5. Income Protection allows you to focus on recovery and recuperation

Many people at some point in their lives will find themselves needing some rest and recuperation from a serious illness or injury. But without the right protection, they may find themselves unable to put all their effort into getting better.

Having to worry about funds is always stressful, not to mention your additional concerns about when you’ll be able to return to work and begin earning money again.

An Income Protection policy will help make sure your income doesn’t cease during these trying times so you can focus on the most important task at hand: your recuperation.

6. It could happen to you!

For many, the biggest hope of their lives is to be able to have the consistent income to provide for themselves and their family well into old age.

Unfortunately, not all of you will be able to see that dream come true.

It doesn’t matter how much you try to stay healthy and steer clear of danger. While we like to deny it, many things operate outside of our control. There will always be risks you simply can’t avoid. Sometimes, all your careful planning and smart decision-making can be for naught if you don’t have the right protection.

In 2013, over 1,000 Australians were killed on our roads. But many more were injured. You may be thinking that 1,000 is a small number – surely it won’t happen to you? Those injured on the roads were probably thinking the same thing. Is it worth the risk?

Of course, there’s much more to worry about than car accidents. Every year, some 55,000 Australians suffer a heart attack and an estimated 128,000 new cases of cancer are expected to be diagnosed this year, with that figure rising to 150,000 by 2020.

Do you really want to be caught out? With all the risks out there, it may be a risk not to get Income Protection to protect you and your family in the future. Guarantee your children, your partner, and yourself peace of mind and get a quote with us today.

Source: http://www.wealthsmart.com.au/2014/07/6-reasons-invest-income-protection-insurance/

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DOCTORS SAVE THOUSANDS IN LOAN FEES

DOCTORS SAVE THOUSANDS IN LOAN FEES
DOCTORS are being treated to discounted home loans, saving them tens of thousands of dollars, because they are a safer bet for banks than the average Aussie.

Medicos and other highly paid professionals including lawyers and accountant are gifted massive mortgage savings through home loan deals almost impossible for others to get.

Experts say banks have a list of preferred borrowers and doctors are right at the top.
News Corporation Australia has learned medicos with deposits of just five per cent and no history of “genuine savings” are avoiding costly Lenders Mortgage Insurance (LMI) – cover if the borrower fails to repay.

MONEYSAVERHQ: For the latest money news and tips

Remove the “Dr” honorific, and the LMI bill on a $500,000 loan soars to as much as $17,500. Because most people with small deposits don’t have that kind of money, it is usually added to the loan. This inflates the cost of LMI by another $24,400 to a total of nearly $42,000 over a 30-year term. And that’s only if the borrower can show their five per cent deposit is genuine savings such as term deposits or shares and not a gift from family.

LMI and the savings test are being waived for medicos because they are considered a safer bet as borrowers: doctors’ incomes will rise faster, there is high-demand for their services and years of study indicate they see things through.

“These loans very rarely go bad, the only time being (as a result of) divorce,” said Hank Hong of Sydney’s Home Loan Experts, who arranges doctors-only deals.

Another reason for their favoured treatment is they are a better “calibre” of customer, said John Paynter of JP Loans, who also sets up mortgages for medicos.

“I’ve never had any misleading or lying,” by a doctor or specialist, Mr Paynter said.

“It happens pretty regularly outside of the medical space,” Mr Paynter said, such as understating credit-card debts or asking him to “bodgy-up” an application so more can be borrowed.

The sweetheart deal market is expanding rapidly. ANZ recently re-entered, joining CBA and Westpac as providers. The large building society Wide Bay Australia set up a medico loan book last year. Macquarie is said to be about to join in and St George Bank recently widened the range of qualifying professions to include engineers and lawyers.

Home Loan Experts’ Mr Hong said it was possible for other people to get loans on these terms and Wide Bay’s head of medico finance Peter Clements said: “We will look at things on a case-by-case basis.”

Finder.com.au money expert Michelle Hutchison, who brought these special loans to light, said other borrowers could “ask their lender to match” the terms.

Alternatively, she advised finding a better deal, spending more time saving a bigger deposit or looking at a lower-priced property.

GET THE DR TREATMENT

  • You’ll need annual income of $150,000+
  • It helps if you are a vet, psychologist, dentist, lawyer, accountant, financial planner or engineer
  • Join your professional association. Most lenders will want evidence of membership
  • Go through a consultant. It’s harder to get these deals direct from a lender
  • And ring lots of consultants. Only about 5 per cent have access to these special deals.

 

Source: http://www.news.com.au/finance/money/doctors-save-thousands-in-loan-fees/story-e6frfmci-1226891202875

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HOW YOUR PROFESSION DICTATES YOUR HOME LOAN DISCOUNT

How your profession dictates your home loan discount
Some jobs have all the perks – including better deals on home loans. Find out if you can bargain for a better rate…

If you’re in the medical profession and paying a standard mortgage rate, then it’s probably time to do a check-up on your home loan.

According to Home Loan Experts director Otto Dargan, banks have a list of preferred borrowers and doctors are at the top.

“Some banks have special home loan packages for medical professionals such as doctors. In the past there were specific discounts for the lawyers and accountants as well, however in recent times these have been less competitive than a professional package with a negotiated interest rate.”

Banks consider doctors to be good risks, which is why they get the best deals.
“The banks actually monitor the default rate of particular professions and then use this data to tweak their lending policies,” Dargan says.” Doctors are known to be a very low risk in fact they almost never default on their loans. In addition to this their income tends to grow exponentially as their career progresses, and so they buy investment properties and apply for many more loans with their bank.”

And there are some incredible deals out there, Dargan says.

“We recently helped a client with several large loans to negotiate a 1.10% discount below the Bank Standard Variable rate, which would have been unheard of a year ago. Doctors, people borrowing less than 75% of the property value and people borrowing over $500,000 should all be negotiating with their lender or using a mortgage consultant to shop around for a better interest rate.”

Doctors can choose between waived lenders mortgage insurance and a discounted interest rate. If you are borrowing more than 80% of the property value, it is usually best to go for waived LMI. But, if you are borrowing under 80% and LMI is not an issue, Dargan advises borrowers to negotiate a lower interest rate.

Teachers and nurses are also considered significantly lower risks for banks than other professions, as both have stable employment and tend to be conservative with their spending habits. While banks do not offer special discounts for these professionals they will bend their lending guidelines to approve their loans.

On the flipside, Dargan says developers and builders (not tradesmen) are considered high risk due to the fluctuating nature of their income. As well, professional property investors that rely on investment as their sole source of income are also considered high risk as many become overcommitted.

“In particular banks are very conservative when assessing a low doc loan for people in these professions. However if you can prove your income, have a good credit history and genuine savings then you should have no trouble getting an approval.”

Recent graduates

Dargan says each lender has their own policy regarding length of employment.
“Most lenders will require that you are not on probation, or that you have been in your job for at least six months. However there are lenders that can approve your loan even if you have just started your job today.”

University graduates will usually find it harder to get a good deal on a home loan because they cannot prove they have been working in the same industry for at least two years. As a result, they will not meet the approval criteria of some lenders.

However, Dargan says some lenders will consider lending to new university graduates if they are now working in a job that is in the same field that they were studying in.

“They just need to apply with a lender that has more flexible policies for employment history and ideally to be at least one month in their new job,” he says.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That’s why it’s important to not only check the right rates, but make sure that you’re getting the right features in your home loan.

Source: http://www.yourmortgage.com.au/article/how-your-profession-dictates-your-home-loan-discount-109247.aspx

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WHAT IS A REPAYMENT HOLIDAY?

what is 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 consultant to get some early advice to make sure you work with your lender to find an appropriate solution.

Contact us for further info.

Kind Regards,
Tom Uhlich
Boss Money

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UPGRADING YOUR HOME BEFORE SELLING?

UPGRADING YOUR HOME BEFORE SELLING

Most people have walked through beautiful model homes and wished their own home had all those modern features. Model homes showcase the latest in upgrades and decorating styles. When we get home all we can see is the tile in our bathrooms and yesterday’s details in our kitchens. These things can become overwhelming if we are considering a home sale in the near future.

“Can I even sell my house with granite countertops anymore?”

Before you grab the sledge hammer and plan a DIY weekend of expanding your family room, take a breath. Your home doesn’t need to be the latest and greatest to fetch top dollar in the resale market.

As you evaluate making changes to your home prior to listing it for sale, the first thing you should do is talk with your real estate agent. They have market experience which allows them to speak with you about how your home compares to others in your area. They work with buyers and sellers every day and know what features and upgrades are top sellers…and which don’t matter at all. While the urban modern home in the magazine looks great, changing the details in your country house into industrial loft style is not an improvement.

Some improvements do translate to better sales price in every case. Outdated wallpaper, dirty and worn carpet and dark rooms can always use improvement. New or cleaned carpet and a fresh coat of paint, coupled with light bright lighting, will really showcase the best features of your home.

Each neighbourhood is different. As you work with your agent, you might find that there are upgrades which will net you a significantly higher sales price. For instance, if you are located in a high end, luxury neighborhood, those buyers expect updated kitchens and bathrooms and you might want to put some money into those rooms to market your home in the top end of the market. But again, talk with your agent before you guess. You don’t want to spend thousands of dollars in upgrades that your buyers don’t care about…or worse…. don’t want.

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5 WAYS TO TELL IF YOU FOUND THE RIGHT HOUSE

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 breakers in your criteria. That might be tempting if the master bathroom is perfect, but if you have to have 4 bedrooms and this is really just a 3 bedroom, you’ll regret buying the home.

4. It fits your overall criteria. The home is located in the school district, city or neighbourhood you want. The larger lifestyle aspects line up with the home.

5. You can afford it. So important! There is no reason to go see homes you truly can’t afford, but it happens. The right home is in your budget.

Of course there are many more aspects which goes into knowing if the home is the right home for you and your family. One of the best ways to know you’ve found the right home is how badly you want the house. Once you’ve left the showing have you compared all other houses to this one? Do you talk about it, think about it? Can you imagine yourself in the home? If so, you’ve found the right one.

So if you’ve found the right home, write that offer! Don’t let it get away!

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WHAT IS A SPLIT HOME LOAN?

SPLIT HOME LOAN
It’s simply dividing your home loan into two or more loans.
For example, let’s say you have a $200,000 home loan. You could divide your loan into one portion being $150,000 and the other $50,000.

Why would you do that?

It can protect you against rate fluctuations if you, as per in this example, say fix the $150,000 for three years and keep the other $50,000 portion variable with a 100% offset account.
Simple strategies like this can give you security in the home loan market whilst at the same time keeping the flexibility of making extra repayments and redraw with the variable portion.

There are a lot of different options with split loans and every situation is different depending on the clients needs.

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WOULD YOU LIKE TO SHAVE 10 YEARS OFF YOUR MORTGAGE? HOW MUCH INTEREST COULD THIS SAVE YOU?

SHAVE 10 YEARS OFF YOUR MORTGAGE
It’s not rocket science, it’s simply a matter of making more repayments more often and making sure you’ve got the best mortgage for your situation.
Of the millions of homeowners, only some are getting out from under mortgage payments years, sometimes decades, before their neighbours. How?

They make an effort to pay off their mortgage early.
The average home loan is now over $400,000 NSW), but living mortgage-free is not a pipe dream.
You may only need to find an extra $200-$500 every month so that you can exceed your mortgage payments. While many think they can’t afford that, you’d be amazed at how much money you can save on a monthly basis.

KNOW YOUR BUDGET

Suncorp Bank executive manager of personal lending Tony Meredith says many people don’t know exactly where their money goes.
“Get to know your incomings and outgoings, and identify where savings can be made. You may be astounded to learn just how much you’re spending on eating out, takeaway or coffees each month,” he says. “By paying even an extra $20 per fortnight off your mortgage, you can make a significant difference to the balance.
“Spend your tax returns wisely. For example, depositing a $2000 tax return as a lump sum into an average $300,000 mortgage can potentially shave about eight months off a 30-year-term, saving a mortgage holder almost $12,000. Do this each year and watch the years drop off your loan.”

WORK IT OUT

There are plenty of free online mortgage payment calculators which will show you exactly how much money you can save by ramping up your repayments.
The monthly repayments on a $300,000 mortgage over a 25-year term at 7.25 per cent are about $2168. But a person could pay the loan off 10 years earlier and save $158,277 in interest by increasing their monthly repayments by $575.
Finding the extra money might not be easy, but it’s surprising how much people can reduce their incidental spending if they scrutinise their household budget. Ask yourself if you really need it, or do you just want it?

PAY FORTNIGHTLY INSTEAD OF MONTHLY

AMP financial planner Dianne Charman says on a $300,000 mortgage, a person can cut four years and six months off the life of the loan and save $82,823 in interest simply by swapping to fortnightly repayments.
“The loan is reduced faster as there are 26 fortnightly repayments each year, instead of 12 monthly repayments. If the person was to also boost repayments by $180 a fortnight, it would shave 10 years off the mortgage,” she says.

LUMP SUM REPAYMENTS

People can also attack their loan faster by making lump sum repayments whenever they can.
Charman says tax returns, work bonuses or inheritance money can all be pumped straight into the mortgage to help reduce interest.
“On a $300,000 mortgage, one lump sum payment of $5000, made five years into the loan, would save $15,681 in interest and reduce the term by 10 months,” she says.
“While it’s tempting to spend cash windfalls, people should try to stay focused on the main prize, that is to be debt free sooner.”
Brontie Chambers, manager of products and member value at Community CPS Australia, says even $5 extra each week can save you thousands of dollars in interest over the life of the loan and reduce your home loan term.
“However, make sure your loan allows you to make additional repayments without penalty,” she says. “Fixed-rate and basic (or ‘no-frills’ loans) often have restrictions on extra repayments or charge a fee for the privilege.”

KEEP YOUR SAVINGS IN AN OFFSET ACCOUNT

Since the global financial crisis, Australians have started saving again. While many people choose to park cash in high-interest online accounts or term deposits, it may be better to save in a 100 per cent mortgage offset account.
Any money in the offset account will be working to reduce interest and pay the loan off faster.
Another advantage of mortgage offset accounts is the cash can be easily accessed if necessary.

CONSOLIDATE YOUR DEBTS

You could can end up paying less interest because home loan interest rates are often much lower than personal loan, credit card and store account rates.
Chambers says that by reducing your monthly repayments into just one home loan repayment, you could reduce your monthly commitments so that you have extra cash available to make additional repayments off your home loan.
“However, this option requires discipline around future use of credit cards and store accounts, such as reducing limits or closing the account,” she says.

SWITCH CAREFULLY

Home loan exit fees have been abolished on all mortgages taken out from July 1, 2011, making it easier for consumers to shop around for a better deal.
However, people with loans taken out before this date need to carefully consider the costs associated with moving a mortgage.

There can be numerous exit and set-up charges which include early termination fees, application fees, discharge and registration fees, mortgage insurance and valuation fees.
Before making the switch, it’s important to check whether all these costs will outweigh the potential savings from having a lower interest rate, and how long it will take to break even.
Edwards Marshall Financial Solutions manager Grant Edwards says one of the biggest mortgage-busting tips is to make sure that your interest rate and bank fees are competitive.
Reduce or stop using your credit cards it’s too easy to spend other people’s money. Any reduction in discretionary spending will reduce credit card repayments and the money saved can then be allocated to increased mortgage repayments.

“Don’t spend your tax refund, pay it off your mortgage. Make sure your gas, electricity, phone and internet providers are the best deals you can get,” Edwards says.
“Allocate whatever you can save on these costs to increasing your mortgage repayment. If you’re offered overtime or a second/part-time job, consider taking it and allocate the increased income to reduce your mortgage.
“Even if it might not seem like much, every extra dollar you pay off your mortgage goes off the principal, which is the real driver to mortgage reduction. For example, a 10 per cent increase in mortgage repayments will reduce the term of the mortgage by 20 per cent.”

LOW MORTGAGE RATE AND INTEREST RATE

Make sure you have the best interest rate you can find. Get your consultant to check if your loan is suitable for you. If you are higher, refinance now. Keep track of every penny that you spend for a month or two and you’ll be amazed at how much of it is frivolous.

PLAN AHEAD

It is a good idea to factor in further rises in interest rates and, if possible, start making contributions at the higher rate. It will ease the stress when repayments do increase and will also put you ahead of the scheduled loan term.
Alternatively, if rates decrease you should keep your repayments at the higher amount to enable you to pay off your loan sooner.

Source: News.com.au

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FIRST HOME BUYER CHEAT SHEET: 10 TIPS TO BUYING YOUR FIRST HOME

So you’re going to take the plunge into real estate ownership. Congratulations! You’ve just made a smart decision in securing your financial future.

Let me help you with my top 10 tips for buying your first home.

1. Decide what you can afford

Take a look at your salary, debt levels, cost of living and the repayments you’d face on your ideal property. Be honest with yourself about lifestyle costs so you don’t over-stretch yourself.

2. Get your finance pre-approved

Do this before you start looking. Don’t risk missing out on a great property because you haven’t got your finance organised. Shop around too as the banks are offering some very competitive rates right now!

3. How to buy where you want for less

Take a look at the neighbouring suburb. It might be a five-minute walk away but often so much cheaper. If you can’t afford your favourite area, consider what you like about it and seek the same in another region.

4. Top features to look for

Major items to look for include a quiet suburban location away from major roads and traffic noise, lots of natural light, close proximity to shops and transport, a good floor plan, good internal size (apartments)/land size (houses) and ideally, off-street parking. Your first property purchase will not be your last, so be willing to compromise on the smaller things but not the headline items above.

5. Properties to avoid

Company title apartments often have by-laws restricting owners’ rights to rent their apartments. This might not matter right now, but if you ever want to rent it out or sell it later, company title could be problematic. Stick with strata apartments – there’s plenty around. Also avoid new apartments in inferior locations. They’re often keenly priced because the developer bought the site cheaply.

6. Recognising potential

It’s really off-putting to walk into a dirty, untidy property. But stop yourself and try to see past the mess. How would it look with new paint and carpet and a professional clean? A poorly presented property in a good location is a gift for budget-conscious buyers as you’ll face less competition.

7. Buying at auction

You can make an offer prior but you risk paying more than you need to. Pre-sales usually occur when there is lacking interest or when one buyer is offering a lot more. Plan your walk-away price and attend some auctions to experience the atmosphere and observe a few bidding strategies. Organise contract amendments beforehand in writing. If you really don’t want to bid yourself, you can authorise someone else to act on your behalf.

8. Bidding at auction

If you’re going to start the bidding, start low. Project confidence and make the other bidders think you have no limit. Make your bids fast and assertive. Agonising over your next bid is a sign of weakness. Call out your offer in full (that is, say “$ 350,000” instead of the increments, such as “$ 5000”). If it’s going to pass in, make sure you’re the highest bidder as you’ll usually be given first right to negotiate afterwards. Stick to your walk-away price. Short-term disappointment beats long-term remorse!

9. Buying via private treaty

Don’t offer the most you can first-up, as vendors will always assume you can do better. Put the offer in writing and mention your pre-approved finance. To make it more seductive, sign a contract and attach a deposit cheque. If it’s rejected, look for ways to help the vendor. Offer a shorter settlement or early release of the deposit if they accept the price. After one or two rejected offers, try offering an odd number such as $337,500 instead of $340,000, as it implies you’re stretched to your financial limit.

10. Get a pest and building report

I strongly recommend this but there are also ways to identify major defects yourself. These include checking the power board in the electricity box to see how old it is; checking for sagging floors; and looking for water stains on the ceilings or dark stains around the skirting boards, which could indicate leaks or rising damp. Also, turn on a tap to check the water pressure.

Good luck!

Source: John McGrath – Switzer Published: Wednesday, November 16, 2011

Great advice from a leading real estate agent. It is really important to understand the cost involved in buying a home. We are offering you a free assessment which will provide you with a finance recommendation (comparing all the major banks and other leading lenders) and a total cost analysis to ensure you know all the ins and outs when buying.

Kind Regards,
Tom Uhlich
Boss Money

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HOW TO COMBAT ATM FEE CHARGES

How To Combat ATM Fee Charges

CONSUMERS who use ATMs not owned by their own banks paid $660 million in mostly unnecessary fees. A large chunk of this money could be kept in people’s pockets with some good planning and budgeting.

The fees, known as foreign ATM fees, are those charged by the ATM operator when consumers use an ATM that does not belong to their own bank, or is not in a network arrangement with their bank. The fees usually average $2 or more.

The Australian Bankers’ Association says 40 per cent of all ATM transactions in 2011 were done at a foreign ATM. That figure is likely to be the same today.

“It’s no different from going to a shop and buying a coffee – you’re purchasing a service from someone,” says the ABA’s chief executive, Steven Munchenberg. “You are paying for the convenience.”

He says the best way to avoid these fees is planning and to be aware of where your own bank’s ATMs are located.

“You can also get cash out with Eftpos transactions, particularly at the supermarket.”
Munchenberg says for people who may not always have easy access to their own bank’s ATMs – such as those in outer suburban or regional areas, the answer is to avoid making lots of small transactions.

Legislative changes introduced in 2009 meant ATM customers had to be notified of the foreign ATM fee on the machine’s screen before the transaction was completed, and since then transactions at foreign ATMs have fallen.

Many financial institutions now offer free ATM locator applications for smartphones.
Source: news.com.au

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HAVE YOU EVER REFINANCED YOUR HOME LOAN?

Refinance Home Loan
A recent survey of Australian mortgage holders found 45% had NEVER refinanced their home (i). The report also found customers who DID refinance saved an average of $240 per month ($2,880 pa) by refinancing a 30 year loan.

What would YOU do with an extra $240 each month?

Why consider refinancing?

You no doubt know the cash rate set by the Reserve Bank of Australia (RBA) is at an all-time historical low. In turn, most lenders are offering the lowest home loan rates ever seen.

So… If there are potential savings in the wings why do so many home owners neglect to explore if refinancing their home loan may benefit them?

Well apparently we dislike talking about money!

It is interesting that another recent survey found 42% of Aussies claimed they would rather avoid the topic of money. Is this a coincidence? Even religion, politics and sex came higher up the list of preferred topics!

In fact, one in three home owners don’t even know their home loan rate (ii).

YES! That’s one third of us!!

Let’s be clear – any decision to refinance should NOT be based solely on a lower interest rate. As your finance specialist we will 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. It is recommended you review your home loan every two years.

Times change. Our needs change, our income and expenses change. 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

That’s 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 could provide greater benefits. And it’s not just about rates – many loans offer features such as offset accounts and redraw facilities that could be right for you. Or perhaps your loan includes a feature (with monthly fees) that you no longer use?

24% said they couldn’t find the time for all that paperwork

This is where your finance specialist comes to the fore – we do most of the legwork for you. The process could be much easier than you think!

13% think it would cost too much

Exit fees were banned for all loans originated after 30 June 2011. If your loan originated prior to this you will need to find out if an exit fee applies. Ask us!

However a new lender will often pay the exit fee for you when refinancing with them. Other fees may also apply – these will also be assessed to determine if refinancing delivers an overall benefit.

9% think it is too hard to compare loans

Comparison 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 one lender. Your current lender would only look at alternate loans from their own range of products.

What are the benefits?

We’ve plugged in some numbers – see the table below – based on an average mortgage of $380,320 at the average interest rate of 5.22%.

If you refinanced at today’s average variable rate (4.64%) you would save $134 per month ($1,608 pa). At today’s average 3 year fixed rate (4.38%) you would save $193 per month ($2,316 pa) – and then most likely revert to the variable rate. These savings could provide much needed financial breathing space.

Alternatively, if you maintained your current repayment level this would deliver substantial interest savings and reduce your loan period by 4-5 years – see the last two columns! What difference would this make to YOUR life as a mortgage holder?

So… Is it worth exploring the possible benefits of refinancing after all?

(i) Refinancing report-Apr 16
(ii) RFi, Australian Mortgage Council

Based on $380,320 average mortgage at 5.22% average interest rate
(30 year loan)*

Interest rate Monthly repayment Total interest paid (30 yrs) Interest saved @ reduced repayment level Interest saved @ $2,093pm^ Time to repay loan @ $2,093 pm^
5.22% $2,093 $373,189 30.0 years
4.64%** $1,959 $324,845 $48,344 $95,825 26.2 years
4.38%*** $1,900 $321,264 $51,925 $128,278 24.9 years

* National averages as at May 2016 ** Average variable rate (May 16)
*** Average 3 year fixed rate (May 16) – thereafter revert to average variable rate of 4.64%
^ If repayments maintained at pre-refinancing level

 

We’re here to help! Please feel free to get in touch today.

Kind Regards,
Tom Uhlich
Boss Money

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BREAKING NEWS – INTEREST RATE UPDATE

RBA rate update

The RBA has cut the official cash rate to 1.5%.

This result was widely predicted with many experts tipping the RBA would lower the rate to provide some stimulus for the economy following last week’s disappointing CPI numbers. Amidst the dramatic U.S. election campaigns of Clinton vs Trump, a turbulent market in the EU following Brexit and the Turnbull government remaining in power, the RBA has opted to try and trigger an increase in consumer spending this month.

What does all this mean for home owners and buyers?
This may also give the property market a boost provide an opportunity for Australians to take advantage of the record low interest rates and competitive offers available in the market.

Here is a table showing how Australia’s average mortgage sizes may be affected:

Loan amount examples Likely decrease in repayments
$150,000 $31.25 per month
$250,000 $52.08 per month
$350,000 $72.91 per month
$450,000 $93.75 per month
$550,000 $114.58 per month
$650,000 $135.41 per month

 

What are the median dwelling prices in the nation’s capital cities?
Melbourne $585,000
Sydney $775,000
Brisbane $477,500
Adelaide $417,500
Perth $490,000
Hobart $327,800
Darwin $497,500
Canberra $561,000

 
While the official cash rate has been slashed, banks and non-bank lenders continue to move their rates out of cycle and there may be a better product for your circumstances. If you want to discuss your home loan rate, fees or structure, please feel free to get in touch today.

 
Kind Regards,
Tom Uhlich
Boss Money

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WHAT ARE THE BENEFITS OF DEBT CONSOLIDATION

Benefits_of_debt_consolidation

A debt consolidation loan is often cited as a worthwhile financial solution for individuals that are dealing with a lot of separate debts.

What are the benefits that may be enjoyed by using a debt consolidation loan as a financial solution?

1. One Payment Rather than Several

One of the biggest challenges with managing multiple debts is dealing with the number of payments that leave your bank account each month. Even the most organised individual can struggle with this element.

As well as the financial element you’ll also be spending time making sure you’re going to have enough money to make payments at various times throughout the month. If the payment amount varies, you may also struggle with keeping on top of what exactly is leaving your bank account each month.

If you take out a debt consolidation loan, you will repay those debts and simply pay one lender, one regular repayment. What’s more, taking out a debt consolidation loan will often mean you have longer to pay. Although your repayment period may be longer you’ll may still save money, as interest will usually be lower and you won’t be accruing any more interest on your existing debts.

When you take out a debt consolidation loan with now FINANCE , we’ll pay your creditors so you don’t need to worry about making a payment to your existing creditors. You’ll then just need to make your regular weekly or fortnightly payments to us.

“One of the biggest challenges with managing multiple debts is dealing with the number of payments that leave your bank account each month. Even the most organised individual can struggle with this element.”

2. Reduced Stress

As alluded to above, paying off numerous debts can be stressful, particularly if, in addition to dealing with numerous creditors, you’re in such a financial position that you’re taking calls or having to respond to letters on a regular basis.

In some respects, a debt consolidation loan can help to change your life, as immediately the need to deal with a large number of creditors will cease, and you won’t spend your days fearful of the telephone ringing or another letter being pushed through the door.

If you feel you may be getting behind with your debts but not to the extent that you’ve started to miss payments and damage your credit score, then a debt consolidation loan could work for you.

3. Reduced Interest and Money Savings

Individuals often find with large credit card debts that their monthly payment achieves little more than servicing the interest that has accrued, particularly if their minimum payment is large yet it is all they can afford to pay. Such a scenario is even more challenging in cases where there are numerous debts to be paid.

With a debt consolidation loan, the overall interest you will pay will often be reduced against what you’d pay on credit cards. While you should check the interest rate of a debt consolidation loan before applying for one, it may be a solution that can lead to money savings.

This is definitely true if you face a scenario similar to the one above, where you’re financially ‘treading water’ and doing no more than paying off the interest each month.

“With a debt consolidation loan, the overall interest you will pay will often be reduced against what you’d pay on credit cards. While you should check the interest rate of a debt consolidation loan before applying for one, it may be a solution that can lead to money savings.”

4. Help with Your Credit Score

The easiest way to look at this is to imagine you continuing with your current financial situation against taking out a debt consolidation loan.

By continuing as you are, if you have numerous debts, then your credit score may get worse, particularly if your outstanding debts remain the same and you’re not making significant progress into clearing them.

In contrast, if you were to take out a debt consolidation loan, those debts would immediately be marked as having been paid, and the only debt on your credit report would be the consolidation loan. The outstanding balance would be consistently reducing due to you making your single, regular payment, and as long as you keep up your repayments – and make additional payments if you wish to – this will help to maintain and potentially improve your credit score.

If you decide to take out a debt consolidation loan because you’re struggling with your repayments, you should avoid taking out further credit while paying off this loan.

Source: https://nowfinance.com.au/what-are-the-benefits-of-debt-consolidation/

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WHAT DOES BREXIT MEAN FOR THE AUSTRALIAN PROPERTY MARKET?

What-does-Brexit-mean-for-the-Australian-property-market

On June 24, the UK held a referendum on the nation’s membership of the European Union (EU). If the majority voted to leave, they would do so, effectively ending their financial, trade and economic ties with the other member countries as they currently know it.

The results of the referendum came through, and it showed that 52 per cent of people voted to leave – early estimates on the day actually said more than 16 million people had voted to leave the EU. What many voters didn’t know, however, is what would happen in the country when that membership ended. After the Sterling dropped when the results came in, people began to panic, and there is now a petition to hold a second referendum that has garnered over three million signatures.

How could Brexit affect the Australian property market and make it necessary to enlist the services of a buyer’s agent?

Regardless of the situation overseas, the British Exit, or Brexit, is rippling all the way around the globe. How could it affect the Australian property market and make it even more necessary than ever to enlist the services of a buyer’s agent?

FINANCIAL INSTABILITY ON THE HORIZON

While the global economy has been unstable for quite some time already, the fact that a reasonably major player on the EU trading landscape has just voted to end its membership has already thrown a spanner in the works.

Before the vote even came through, a US investor speaking to Smart Company predicted that the Sterling could depreciate by as much as 15 per cent. Over the course of the year so far, the Sterling had declined 6.5 per cent, and is now set to plummet even further.

One of the biggest factors at risk in Australia is trade – as businesses in the UK see less certainty in their trading ability with EU counterparts, they won’t have as much freedom to import from down under. Furthermore, many residents of Australia who have bonds, shares and other assets in the UK could lose a portion of their wealth as it depreciates as a direct result of the Brexit. With UK assets falling from grace, Australian assets could become much more valuable.

As housing in the UK declines, as it is likely to do, the ripple effect in Australia could be similar. Domain Group suggests that in the long run, rents could drop as a result of people evacuating to escape the financial uncertainty. Property is not an unstable investment, and so won’t be as affected by the volatility that Brexit will bring with it.

Brexit

 

What does Brexit mean for the Australian property market?

“My feeling, and the consensus, is that staying feels secure and thus gives some confidence to the economy, and leaving breeds uncertainty and wobbles,” said Xavier Wiggins, the director of Europe for Investorist.

According to realestate.com.au, London is one of the primary markets for property investors from Asia, so with that market essentially closed off as unstable, it will shine a golden light on Australia as a far more concrete destination for property buying.

This increase in competition for residential property will only serve to drive property prices higher.

WHAT DOES THIS ALL MEAN FOR THE MARKET?

If investors do turn to Australia as the next main target for their purchases, many people who are already struggling to get into a home will face more demand from opposition buyers than ever.

When sellers see this occurring, they will look to take advantage of it and push prices higher. CoreLogic RP Data monthly indices already shows that the median dwelling value in Sydney is $984,790, and in Melbourne it’s not much better with a figure of $797,150 for the month of June. These values have increased by 13.05 per cent and 13.9 per cent respectively in the past 12 months, so any external factors driving that growth even higher would be bad news for current hunters.

With market experience and great relationships, they’ll know where to look for your dream home.

It might be excellent news for existing home owners, but buying is going to become more of a struggle. That’s why a buyer’s agent can come in so handy. With market experience and great relationships with other property professionals around the scene, they’ll know where to look to get you into your dream home – they’ll even be able to get you the best price possible for it.

A buyer’s agent can work in your favour heading into auction too, so if you’re unsure of what to do under the pressure of the hammer, Cohen Handler has you covered.

Shayne Elliott, ANZ CEO said Brexit was “certainly a surprise and while it was always tipped to be close, I think most in markets globally expected a vote in favour of remaining.

“[It has] caused significant volatility and dislocation in markets that will impact funding costs in at least the short term.”

While Brexit looks to be having dire effects on the British economy, it could also prove negative for the Australian property market. Buyers will struggle to make any headway toward buying their home while more and more investors potentially look south for their own next purchase.

Source: Cohen Handler
http://www.cohenhandler.com.au/what-does-brexit-mean-for-the-australian-property-market/

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WILL YOU BE RENTING FOR THE REST OF YOUR LIFE? PERHAPS NOT

Will you be renting for the rest of your life

With the ongoing concerns about increasing property prices, home ownership, the cost of living, and small or no wage increase, the question that continues to come up in general conversation is ‘how will our children ever enter the property market?’

Did you know that approximately 28% of our Australian population at any time are in rental accommodation (1)?

The percentage of owners (including those with a mortgage) vs renters has not changed significantly since the very first census of population and housing in 1966. In 1966 the proportion of owner occupied private dwellings vs rental was 71.4% (2). The most recent census information of 2006 shows home ownership has dropped slightly to 69.8%.

Although there has been a slight drop in home ownership, the population has more than doubled over the same time from 11.65M to currently over 23.8M (3). In fact, home ownership rates in Australia still put us in the top five of all OECD countries.

So what can renters do?

Home ownership

The legal rights and obligations that home owners have in relation to the property they live in vary considerably according to the type of housing.

For example, those who own their home:

  • have greater security of tenure than most renters whose occupancy rights are subject to review at relatively frequent intervals.
  • generally have more freedom than renters to modify the property to suit their specific needs and tastes (eg to keep pets, take in boarders or run a business from home).

In the course of repaying their home loan, owners usually accumulate wealth in the form of home equity that can then be used to secure finance for other purposes.

Conversely, they face considerable costs associated with buying and selling property, so home owners have less flexibility when it comes to moving house.

Renting

On the other hand, renting can have advantages over home ownership, such as:

  • greater flexibility to move elsewhere at short notice,
  • lower housing costs than many owners repaying a mortgage,
  • the opportunity to invest in other assets which may yield higher returns than home ownership, plus
  • renting avoids repair and maintenance costs, rates and insurance bills that are all part and parcel of home ownership.

Can you rent AND buy?

Sometimes it makes more sense to become a renting investor, ie continuing to live in rental accommodation and buying an investment property before buying a home. Young investors in particular may do this for a number of reasons:

  • They can rent in the trendy, lifestyle driven areas they want to live – but cannot afford – and still get a foot in the property market. An investment property may not necessarily be in the area – or even state – that they want to live but can be chosen purely for affordability and good rental returns.
  • They may still be living at home with their parents rent free, enabling them to save and invest.
  • Their lifestyle is still transient – travelling, moving around with jobs or relationships. They may not be sure where they want to plant their ‘property roots’ yet.
  • They don’t see a large, non tax-deductible mortgage on a home as the best use of their money at this stage of their life.

Co-ownership scenarios may be another option for younger buyers. Pooling financial resources with family or friends may allow them to enter the property market faster than they would be able to do on their own. However, this option is a little more complex than a typical individual owner/occupier or investor purchase so you need to establish a borrowing arrangement to protect your investment.

1. Abs.gov.au
2. Abs.gov.au
3. Sources include: World bank, ABS population clock

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DON’T LET LIFE TRAP YOU. WE CAN HELP YOU GO PLACES YOU’VE ONLY EVER DREAMED OF

Do not let life trap you Boss Money can help you go places
Borrow $4,000 to $35,000 today!

Finance is usually associated with the purchase of big ticket items like cars and houses. But did you know finance can also be utilized in improving your day to day living?

Finance can be used for anything from travel expenses to home improvement costs. This kind of finance is generally classified as personal finance.

Most people don’t realise that personal loans can be quick and easy to get. Once you decide to take out a personal loan funds could be in your bank account within 48 hours. This is what makes personal loans so fantastic, they’re relatively easy to get and they can improve your life!

As finance consultants we pride ourselves on being able to determine the best finance solution for you, so if you are interested in a personal loan, please contact us so we can get you funded ASAP!

Regards,
Tom
Boss Money

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ARE YOU MAXIMISING PROPERTY TAX DEDUCTIONS?

Are you maximising property tax deductions

 

According to the ATO there are around 1.9 million property investors in Australia and 2.7 million rental investment properties*.

Surprisingly, many landlords fail to claim all allowable tax deductions simply because they are unaware of all the expenses they can claim as a tax deduction.

There are two types of investment property strategies – positively geared or negatively geared.

Positively geared properties – where rental income is higher than interest payments and tax deductible outgoings. Tax is likely to be paid on the net income.

Negatively geared properties – where rental income is less than interest payments and tax deductible outgoings. The loss can be offset against other income earnings, reducing assessable income and therefore your tax payable.

The strategy most suited to you will be dependent on your individual circumstances and your long term investment goals and objectives.

More recently, proposed tax changes to negative gearing has been a political hot potato. Let’s face it – nobody likes the goal posts shifted half way through the match! Whatever the outcome, property investment is likely to continue being a popular path to wealth creation for Australians – even if the scales tip in favour of positively geared property investment.

So… If YOU have an investment property are you sure you are claiming all possible deductions?

Regardless of the property investment strategy you adopt all investors will see benefits in claiming all possible deductions. As a starting point review the lists below and ensure you have paperwork for the expenses you have incurred.

Initial borrowing expenses

  • stamp duty charged on the mortgage
  • loan establishment fees
  • title search fees charged by your lender
  • costs for preparing and filing mortgage documents
  • mortgage consultant fees
  • fees for a valuation required for loan approval
  • lender’s mortgage insurance – this is insurance taken out by the lender and billed to you

Interest

Interest is usually the largest tax deduction, particularly in a negative gearing arrangement. You can claim the interest charged on the loan used to:

  • purchase a rental property or land to build a rental property
  • purchase a depreciating asset for the rental property (eg an air conditioner)
  • make repairs to the rental property
  • finance renovations on the rental property

Other expenses

  • advertising for tenants
  • bank charges
  • body corporate fees
  • council rates
  • gardening and lawn mowing
  • insurance
  • land tax
  • legal expenses for preparing a lease or evicting a non-paying tenant
  • pest control
  • property agent fees or commissions
  • repairs and maintenance
  • water charges (if not paid by the tenant)

Capital works

You may be able to claim a deduction (usually at the rate of 2.5% per year in the 40 years following construction) for the construction cost of:

  • buildings
  • structural extensions such as a garage or patio
  • structural alterations such as adding an internal wall
  • structural improvements such as a gazebo, carport, sealed driveway, retaining wall or fence

Depreciation

The plant and appliances in your property reduce in value over time as a result of normal wear and tear. The ATO allows you to claim deductions for this reduction in value each year.

In order to substantiate these deductions you should consider getting a professional quantity surveyor’s report for applicable capital works and depreciation deductions during the life of your property.

Most importantly… make sure you keep all receipts as no receipt = no deduction.

* ABS Census 2011

maximising property tax deductions guide for rental property owners

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BREAKING NEWS – INTEREST RATE UPDATE

Interest_Rate_Update

The end of the financial year is nearly upon us, and the Reserve Bank of Australia has just announced the outcome of its board meeting. The Reserve Bank of Australia has decided to leave the official cash rate at 1.75%.

In making this decision the RBA resisted the temptation to lower rates further despite Australia’s low inflation rate which has dropped below their target range of 2 – 3%. Better than expected GDP figures, albeit strongly driven by exports, appear to have influenced the Reserve Bank to take a patient approach for the time being.

Even though the cash rate has remained unchanged, it’s still wise for us to talk to ensure you still have the appropriate financial solution for your current circumstances.

Get in touch today to make sure you are taking advantage of daily changes in the increasingly competitive mortgage market.

Kind Regards,
Tom Uhlich
Boss Money

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LIFESTYLE NEWS – CHARGING KIDS RENT

all_in_the_familyThe trend for adult children to remain in the family home for longer is putting a strain on their parents. But there are ways to make it work for everyone.

If you have a happy marriage and a comfortable home, studies indicate it’s more likely your children will delay moving out.

Well, they’re not silly are they?

But, confirming the cruel irony of life, the same studies also show that having adult children remain at home can put a strain on parental relationships and finances. So you end up broke and unhappy, then they move out – right?

Well, there is another way. Handled correctly, the arrangement can benefit everyone, and help 20-somethings launch successfully into the world.

Today, about one in four, or 23 per cent of people aged 20- 34 live with their parents, up from about 19 per cent in the late 80s. Interestingly, significantly more men (27 per cent) than women (18 per cent) stay at home into adulthood.¹

While some have never moved out, about half have left and returned, earning the tag ‘boomerang kids’. Some are shellshocked at the cost and responsibility of flying the nest, others want to save for a house deposit, and some return after a relationship breakdown.

No matter the reason, there are some basic rules to help minimise ‘boomerangs’ and reduce the impact on your sanity and hip pocket.

Teach your children to read, write and budget

Most would agree it’s never too early to teach your children the value of a dollar. Entertainer Toni Braxton raised eyebrows a couple of years ago when she revealed her primary school-aged children paid rent.

It was a nominal amount from their pocket money, but Braxton explained: “It’s so they can understand that when you get older and have to leave, you have to pay bills. It was a shock to me when I found out I had to pay bills, like, ‘What do you mean rent?’ So I thought I should instill that into my little boys.”

In today’s ‘swipe and go’ credit card age, young children are often unaware money is even changing hands, so it is more important than ever to take the time to explain financial transactions. And while pocket money can be divisive, if it comes with financial responsibility – to make your own decisions about spending/saving – it can be an important learning tool.

Have that hard conversation early

If your adult children decide to stay on after they have finished their study, or if they return to the family home after moving out, it is important to have a frank discussion. This can be hard but it will pay off in the long run to set ground rules early.

Experts agree adult children should contribute to the household costs, regardless of your financial situation. So it may be a good idea to research average rents in your suburb and discuss this with your children. Even if you only decide to charge a nominal rent, it is important they acknowledge real world costs. Also, let them see your electricity, rates, grocery and fuel bills and discuss how they will contribute.

If your child is studying or only working part time, charging them the same amount of rent that’s expected of a full time worker may not be reasonable or achievable. As a guide, it’s generally recommended to spend no more than 30 per cent of your gross monthly income (before tax) on rent.

If your child is saving to buy a car or a first home deposit, instead of paying the market rent rate, you might consider having them trade off some of the money for extra jobs around the house.

Setting up a direct deposit arrangement for rent payments can also save friction. And if you feel uncomfortable taking money from your children, and can afford the costs of having them under your roof, consider paying their ‘rent’ into a savings account and gifting it to them when they move out.

Accept that your children will struggle… and learn from it

Australian Parents Council Director Ian Dalton told The New Daily last year: “One of the issues we see quite a bit is that too many parents don’t want their kids to struggle.”

Dalton hits on a pivotal issue. Baby boomers recognise it is harder for their children in many ways – higher education now comes with fees, housing costs have soared and the job market is tight. No one likes to see their kids do it tough, but it is possible to ‘help’ your children too much, stunting their independence. Many well-meaning parents subsidise their children’s phones, cars and travel into adulthood.

Allowing your children to make financial mistakes (and learn to live within their means not yours) is part of allowing them to grow.

Seek help

Financial planners are now advising new parents to plan to support their children into their 20s. Nicknames such as KIPPERS (Kids in Parents Pockets Eroding Retirement Savings) and SLOPS (Singles Living Off Parents) indicate the problem.

This can put an additional financial burden on parents who should be saving for retirement. Financial advisors estimate having an adult child at home can cost anywhere from $10,000 – $24,000 a year depending how much parents subsidise extras, such as cars, phones, travel, entertainment and food.²

Some parents end up curtailing their own travel plans, retiring later or delaying downsizing so they can help their offspring. Discuss your situation with a financial planner. Charging your children as little as $150 a week adds up to nearly $8,000 a year. You could use this to supplement your retirement savings or to pay down your home loan or other debts.

Consider renovating your family home with a long term view

Talk to your mortgage consultant about using the equity in your home to upgrade the family home. The extension you might like to build for your boomerang children could end up being your granny flat when it is time for you to pass the family home to the next generation and downsize your own living arrangements.

Try to remember there is an upside

This can be particularly true if your adult child returns with his/her own children in tow. You will in all likelihood be doing some extra babysitting, but embrace the bonds you are building. They could come in handy as you head into the territory where some extra help around your home could be just what you need.

1. Young Adults Then and Now, Australian Social Trends, 2013, Australian Bureau of Statistics.
2. Mother Can You Spare a Room?, Grind, Kristen, Wall Street Journal, May 3, 2013.

Source: AFG

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BREAKING NEWS – INTEREST RATE UPDATE

Today, as the end of the financial year draws closer, the Reserve Bank of Australia has announced the outcome of its board meeting and it has decreased the cash rate by 25 basis points.

The official cash rate is now 1.75%.

Interest_Rate_Update

In taking this decision it appears the Reserve Bank has reacted to concerns around the relative strength of the Australian Dollar and the impact this is having on exporters and tourism, talk of a slowing housing market and new data showing inflation has dropped below their target range of 2.5 – 3%.

The market is speculating that lenders may not pass the decrease on in full, citing increased funding and regulatory costs.

Therefore a fresh round of competition is likely to be sparked amongst lenders so it is a great time for us to review current finance arrangements.

How does this impact the average mortgage holder? Here is a table showing how Australia’s average mortgage sizes may be affected:

Loan amount examples Likely decrease in repayments
$150,000 $31.25 per month
$250,000 $52.08 per month
$350,000 $72.91 per month
$450,000 $93.75 per month
$550,000 $114.58 per month
$650,000 $135.41 per month

 
Please get in touch if you would like to discuss the current finance market in light of today’s announcement and how it may impact you.

Kind Regards,
Tom Uhlich
Boss Money

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WHAT IS NEGATIVE GEARING AND WHY SHOULD I CARE?

UNLESS you’ve been living under a rock these past few weeks, you would have heard a lot of talk about negative gearing and proposed government changes to it.

But what does it actually mean? Allow us to explain.
Gearing is just a fancy financial term associated with investment properties and repayments on mortgages.
Positive gearing is when the rental income on an investment property is greater than the loan repayments, so you are making a profit straight up.

Neutral gearing is when the rental income meets the loan repayments.
1
Gearing is just a fancy financial term associated with investment properties and repayments on the mortgage.
And negative gearing is when your loan repayments are higher than your rental income, meaning you’re losing money.

So, why is it used in a positive sense when you’re actually making a loss?
Let’s say you borrow money from the bank to buy an investment property and your loan repayments are $1,000 per week. You get $900 per week in rent, but that still leaves you $100 out of pocket.
Over the year, this adds up to $5,200 you’ll need to cough up to cover the costs of your mortgage. This is where the government comes in to the picture.

PM Malcolm Turnbull declared no changes to negative gearing at weekend.
Under the current laws, you can offset that loss against your tax, so you’re getting your money back at the cost of taxpayers. On top of this, assuming the value of your property rises – let’s say, by $40,000 – you’ve still made money, regardless of the helping hand.

So why is everyone up in arms about this at the moment and why should you care? Opposition Leader Bill Shorten wants to limit negative gearing to new dwellings only, starting in 2017.
The suggestion has been met with a mixed response, with many property experts slamming the idea, claiming the changes will push property owners to raise rents and drive house prices up even further.
2
Property investment in Australia.

On the other side of the coin, when negative gearing was removed in the mid 1980s, rents didn’t go up in spectaculary fashion.
The property lobby also claims “mum and dad” investors will be hurt the most. Other experts are saying that is just not true.

Whether you buy into those claims or not, the statistics provided by the RBA suggest negative gearing is used overwhelmingly by wealtheir, older people. AKA the baby boomers, otherwise known as the generation that likes to badmouth Gen Y for being “slackers”, even though they had it easy. But now I’m just ranting.
Like any big topic in the political spotlight, it can be confusing, and can leave you asking whether it’s even worth giving a damn about.

At the end of the day, whether it affects you directly or not, you should arm yourself with enough knowledge. Then, when it comes time to decide which middle-aged white man should run the country, you can choose the one who’s actually in the country’s best interests.

Source: Daily Telegraph

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BECOMING A FIRST HOME BUYER

Buying your first home is an exciting, but big step to take and one that comes with many questions and decisions. The first big question is how much you can borrow and what your likely repayments will be.

That’s where a Boss Money consultant comes in. Your consultant is there to do all the legwork for you. A Boss Money consultant will be able to compare home loans across over 800 products available from Australia’s leading lending institutions.

And because you’re a first home buyer, you may be eligible for a first home buyer grant. This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 months of settlement. As grant conditions vary from state to state, contact a Boss Money consultant to find out how much grant money you could receive.

A general First Home Buyer FAQ guide

image001

How much money can I borrow?
We’re all unique when it comes to our finances and borrowing needs. Get an idea of how much you could borrow and what your likely repayments would be with our online calculators. A Boss Money consultant will then help determine the next steps on your road to owning your own home.

How do I choose the loan thats right for me?
Loan types and loan features will give you a good idea of the main options available, but because there are hundreds of different home loan products available, and individual circumstances are all different, contact us today to take a look at your options.

How much do I need for a deposit?
A deposit is usually between 5% – 10% of the value of a property, which you pay when signing a Contract of Sale. If you can’t organise a deposit in time, your conveyancer/solicitor may be able to arrange a deposit bond until settlement – although you’ll have to pay extra for this. If the deposit requested is 10%, your conveyancer may be able to negotiate this down to 5%.

How much will regular repayments be?
Go to our Repayment Calculator for an overall idea of what your likely repayments may be, but because there are so many different loans available, some with lower introductory rates, a Boss Money consultant can help you navigate your options.

How often do I make home loan repayments – weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your pay cycle. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and time off your loan.

What is the First Home Owner Grant and can I get one?
This is a grant available to Australian citizens or permanent residents who wish to buy or build their first home, which will be their principal place of residence within 12 months of settlement. As grant conditions vary from state to state, contact a Boss Money consultant to find out how much grant money you could receive.

What fees/costs should I budget for?
There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all of the usual costs:

  • Stamp Duty – This is the big one. All other costs are relatively small by comparison. Stamp duty rates vary between state and territory governments and also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself. To find out your total Stamp Duty charge, visit our Stamp Duty Calculator.
  • Legal/conveyancing fees – Generally around $1,000 – $1500, these fees cover all the legal rigour around your property purchase, including title searches.
  • Building inspection – This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems you have the option to withdraw from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000, depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Pest inspection – Also to be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection, so if any unwanted crawlies are found you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent or conveyancer may arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Lender costs – Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. Your Boss Money consultant can let you know what your lender charges but allow about $600 to $800.
  • Moving costs – Don’t forget to factor in the cost of a removalist if you plan on using one.
  • Mortgage Insurance costs – If you borrow more than 80% of the purchase price of the property, you’ll also need to pay Lender Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
  • Ongoing costs – You will need to include council and water rates along with regular loan repayments. It is important to also take out building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan, but make sure you actually take out enough building insurance to cover what it would cost if you had to rebuild. Likewise, make sure you have enough contents cover should you need to replace everything if the worst happens. Boss Money provides both home building and contents insurance. Speak with your Boss Money consultant to obtain an estimate.
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HOME LOANS FOR ENGINEERS

Engineers make it happen. That’s why the banks want to help you make your new home or investment property happen with special discounts for certain engineering professionals.

Some of our banks have chosen certain occupations which they consider to be low risk, and so, eligible for special discounts.

  • Mining engineers: Must be a member of Engineers Australia.
  • Surveyors: Must be a member of the Institution of Surveyors.
  • Mine surveyors: Must be a member of the Australian Institute of Mine Surveyors (AIMS).
  • Quantity surveyors: Must be a member of the Australian Institute of Quantity Surveyors.
  • Geologists: Must be a member of the Fellowship of the Australian Institute of Geoscientists (FAIG).
  • Geophysicists: Must be a member of the Fellowship of the Australian Institute of Geoscientists (FAIG).
  • Other professions and industry associations may be eligible for other mortgage discounts.

If you are one of the above mentioned eligible professions then you may be eligible for one of the below discounts:

  • Negotiated interest rate discounts.
  • Waived Lenders Mortgage Insurance (LMI) – conditions apply.
  • Our banks may waive the requirement for genuine savings.
  • Higher exposure limits when purchasing multiple investment properties.
  • Flexible credit criteria and income verification for FIFO workers.
  • No location restrictions when buying a home or investment property in a mining town.

Borrowing over 80% of the the purchase price of your new home can be expensive! This is because of Lenders Mortgage Insurance (LMI) which is a once off fee payable when your loan is settled.

LMI protects the lender, not you. However, since you are a low risk borrower we may be able to get the lender to waive this requirement entirely!

What are the criteria to get your LMI waived?

  • Your income must be over $150,000 (including rent income although some exceptions apply).
  • Your loan must be for a maximum of 90% of the property value (90% LVR).
  • You must be a member of an accepted industry association to be eligible.
  • You must meet all standard lending criteria.

If you are a member of Engineers Australia then you may be eligible for a no LMI loan. Please speak to us to find out more.

Generally speaking though, all engineers are a preferred profession for several of our lenders and are eligible for professional discounts on their interest rate depending on the size of their mortgage.

Do you qualify for a discounted interest rate or waived LMI?
Give us a call on 0476 111 000 or fill in our form on our contact us page to find out more.

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HOME LOANS FOR DOCTORS

Home loans for doctors were created by the Australian lenders because they favour doctors above all other professions. From a risk perspective doctors are known to be low risk borrowers, earn high incomes, and often approach the bank later in life for a business or investment loan.

Doctors have one of the lowest default rates of any profession so you’re in a unique position to negotiate significant discounts that aren’t available to other borrowers.

In Australia, home loans for doctors are mortgages offered by lenders to certain types of doctors.

These types of mortgages differ from normal mortgages due to the following reasons:

  • The maximum amount that you can borrow is usually higher than what is offered to the public. For example, some lender will lend up to $4.5 million for your home and investment properties. Larger loans are available on a case by case basis.
  • Lenders create these products to attract doctors.
  • Home loans for doctors offer special discount not available to normal borrowers.
  • Home loans for doctors can be used to buy a new property or refinance your existing loan to buy more properties.

Medical practitioners who are eligible for doctor home loans can get either an interest rate discount, a lenders mortgage insurance (LMI) waiver, or both. Home loans for doctors vary from lender to lender so the type of discount will depend on the lender.

For example, if you’re buying a home for $1,000,000 and borrowing $900,000 then you would normally pay around $24,500 in LMI. As you can see, this is an incredible discount!

Not all doctors are considered to be eligible for the ‘Medico Package’ discounts. Below is a list of preferred medical professionals:

Anaesthetist
Cardio Thoraci Surgeon
Cardiologist
Chiropractor
Clinical Pharmacologist
Cosmetic Surgeon
Dentist
Dental Specialist
Dermatologist
Ear and Throat Surgeon
Emergency Medicine Specialist
Emergency Surgeon
Endocrinologist
Gastro Intestinal Surgeon (Upper/Lower)
Gastroenterologist
General Practitioner
General Surgeon
Gynaecologist
Haematologist
Hepatologist
Herpetologist
Immunologist
Intern (Hospital Employed)
Nephrologist
Neurosurgeon
Neurologist
Obstetrician
Oncologist
Opthalmologist
Optometrist
Oral and Maxillofacial Surgeon
Orthopaedic Registrar
Orthopaedic Surgeon
Otolaryngologist
Paediatric Surgeon (Neonatal/Perinatal)
Pathologist
Pharmacist
Physiotherapist
Plastic Surgeon
Psychiatrist
Radiologist
Reconstructive Surgeon
Registrar
Resident Medical Officer
Residents (Hospital Employed)
Respiratory/Thoracic Surgeon
Rheumatologist
Specialist Physician
Staff Specialists (Hospital Employed)
Surgeon
Urologist
Vascular Surgeon
Veterinarian

To be eligible you must also be a member of one of the following associations:

Australian Association of Practice Managers
Australian College of Rural and Remote Medicine (ACRRM)
Australian Dental Association (ADA)
Australian Dental Council (ADC)
Australian Medical Association (AMA)
Australian Medical Council (AMC)
Australian Veterinary Business Association
Australian Veterinary Association
Australasian College for Emergency Medicine (ACEM)
Australasian College of Cosmetic Surgery (ACCS)
Australasian College of Dermatologists (ACD)
College of Intensive Care Medicine of Australia and New Zealand (CICM)
Medical Practitioners Board of Australia
Royal Australasian College of Dental Surgeons (RACDS)
Royal Australasian College of Medical Administrators (RACMA)
Royal Australian and New Zealand College of Obstetricians and Gynaecologists (RANZCOG)
Royal Australian and New Zealand College of Ophthalmologists (RANZCO)
Royal Australasian College of Surgeons (RACS)
Royal Australasian College of Physicians (RACP)
Royal College of Pathologists of Australasia (RCPA)
Royal Australian and New Zealand College of Psychiatrists (RANZCP)
Optometrists Association Australia
The Australia and New Zealand College of Anaesthetists (ANZCA)
The Royal Australian College of General Practitioners (RACGP)
The Royal Australian and New Zealand College of Radiologists (RANZCR)
Urological Society of Australia and New Zealand (USANZ)
Other associations on a case by case basis

Yes, interns, residents, registrars and staff specialists are all eligible!

Do you qualify for a discounted interest rate or waived LMI?
Give us a call on 0476 111 000 or fill in our form on our contact us page to find out more.

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HOME LOAN DISCOUNTS FOR LAWYERS

Legal professionals are great borrowers and the banks know it!

That’s why you may be eligible for special discounts on your home loan or flexible lending criteria when funding your legal practice.

What discounts are available?

Lawyers, solicitors and barristers can all qualify for special discounts on their home loan. Other legal professionals are considered on a case by case basis.

  • Negotiated interest rate discounts.
  • Waived Lenders Mortgage Insurance (LMI).
  • Higher exposure limits when purchasing multiple investment properties.
  • Flexible credit criteria when financing your legal practice.

Normally if you borrow over 80% of the property value then the lender will charge you a fee known as LMI. This can be quite expensive and works out to be around $24,000 for a 90% loan on a $1,000,000 property.

But what if you could have it waived?

One of our lenders can consider waiving LMI for legal professionals if they meet certain criteria:

  • Your income must be over $150,000 (including rent income, some exceptions apply).
  • Your loan must not exceed 90% of the property value (90% LVR).
  • You must provide a current Practising Certificate for your state or territory.
  • Your credit history, employment and asset position must be within standard bank policy.

Normally if you borrow over 80% of the property value then the lender will charge you a fee known as LMI. This can be quite expensive and works out to be around $24,000 for a 90% loan on a $1,000,000 property.

But what if you could have it waived?

Some lenders will require you to be a member of:

  • Law Council of Australia
  • Law Society of NSW
  • Law Society of South Australia
  • Queensland Law Society
  • The Australian Bar Association
  • Law Institute of Victoria
  • Australian Labour Law Association
  • Australian Corporate Lawyers Association
  • The Commercial Law Association of Australia
  • Australian Insurance Law Association

Some other industry bodies are accepted on a case by case basis. Several of our lenders do not require evidence of your membership however they will require a copy of your degree or evidence that you are currently practising in order to get access to special discounts.

Do you qualify for a discounted interest rate or waived LMI?
Give us a call on 0476 111 000 or fill in our form on our contact us page to find out more.

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TO BUY OR BUILD? GUIDE FOR FIRST HOME BUYERS

Many buyers struggling to find the right home are going back to the drawing board and building rather than buying an existing home.
There are obvious benefits to a brand new home: you can build exactly what you want and enjoy shiny new surrounds, with no wear and tear costs for years to come. But there can be downsides to creating your castle.

We looks at some of the pros and cons of building versus buying.

THE PROS OF BUILDING

You get what you want
The great pleasure of building your own home is choosing what you want for today’s lifestyle. If building, you have two options: a project home or a custom-built one.
Project homes offer a suite of designs, usually with options to mix and match or upgrade some features. They are cheaper than custom-built homes because the builder works on an economy of scale for the building materials and products and knows exactly how much money will be made on each design. The other benefit is that you can tour display villages and see exactly what you will get.

A custom, or architect-designed, home will cost more but allows you to create your dream home. Just remember, the higher the quality of your materials and fittings, or the harder they are to source, the higher the cost. Size also matters, with builders working on square meterage.

You can go green
The Nationwide House Energy Rating Scheme requires all new homes to have a minimum energy rating of six stars (one being the lowest and 10 being the highest), which means lower energy and water bills for your household, plus the feel-good factor of helping the environment. Green design includes the home’s aspect to make the most of natural cooling and warming, water tanks, energy efficient lighting and better-insulated windows.

You can be part of a new community
In a world where increasingly few of us know our neighbours, a new home in a new estate can help knit you into a community. New estates are generally located in high-growth areas that attract young families, a plus for those with kids who want to feel part of a neighbourhood. These estates are also carefully planned, often with new parks and purpose-built shopping centres. Some are even large enough to have their own schools, heightening the sense of community for residents.

THE CONS OF BUILDING

Time and stress
Building a new home, even if you opt for a project design, requires your input and time. Even the simplest projects can take their toll, especially if couples disagree about certain fixtures, bad weather impacts timelines or the builder gets something wrong.
Busy people might struggle to find enough time to make decisions, liaise with the builder and other contractors and visit the building site. If that’s the case, buying an existing home might be a less stressful option.

Locating land
While new homes are generally part of new communities, the trade-off is that the land is often located in outer suburbs, with fewer public transport options and longer commutes.
Finding vacant land in established areas is nigh impossible in some cities, so older homes in poor condition are being snapped up and knocked down. For many, the cost of buying and demolishing a home and building a replacement is prohibitive. If you are looking to settle in an established suburb with ample infrastructure and amenities, buying a home and renovating it to suit your needs may be more affordable and convenient.

A HELPING HAND

Whether you decide to buy or build there are still come government grants available for first home buyer to lighten the load. Check out what’s on offer at www.firsthome.gov.au

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EXPLAINING THE LOAN PROCESS

HOW DOES THE PROCESS WORK?

Arrange a pre-approved loan

If you haven’t started your property search, or are still looking, a pre-approved loan can be useful. It gives you a clear picture of what you’re spending limits are and gives you peace of mind that if you find a property you really interested in you can move quickly to make an offer. And it may put you in a stronger negotiating position than other potential buyers who don’t have pre-approval. A consultant can take care of the paperwork to lodge a loan application.

Find your property

Make sure you do plenty of homework when you’re on the hunt for a new property. Research property prices in the area, potential capital growth and existing and planned infrastructure, such as roads, public transport, schools and shops. If you’re unfamiliar with property values in the area, consider a full valuation carried out by a registered valuer before making a final decision.

Make an offer and sign a Contract of Sale

Whether you buy property at auction or make an offer on a listing, your agreement with the vendor only becomes a legal commitment when a Contract of Sale (Offer of Acceptance in WA) has been signed by both parties. This contract will confirm the selling price as well as any terms and conditions. Your commitment will usually be subject to lender approval, a building inspection report and a pest inspection.
The period from signing a Contract of Sale to Settlement – when the property becomes legally yours – is usually six weeks (shorter in some states, such as Queensland).Note: even if you have a pre-approved loan, your lender will still need to complete a valuation of the property you have chosen before issuing full approval.

Pay a deposit

A deposit is required once a Contract of Sale has been signed by both parties (sometimes called ‘exchanging contracts.’) You won’t yet have access to your home loan, so your deposit will need to come from savings or elsewhere. You may also be able to arrange a deposit bond until settlement. Speak to Boss Money about your deposit options.

Appoint a conveyancer

You will need a solicitor or conveyancer to check the legalities of the Contract of Sale. Your conveyancer will also check all rates and taxes have been paid, check land use or building approvals for the property and order any relevant searches. They may also help sort out any inspections.
On settlement day, the conveyancer will check the correct amount of money has been transferred from your lender to the seller and all fees – such as Stamp Duty – are paid, so you can take legal ownership of the property.

Cooling off period

If you didn’t buy your property at auction, you may have a cooling off period when you can cancel the contract, although there may be a small penalty. Cooling off periods vary from state to state so check with your relevant state authority in terms of what your rights may be.

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INTEREST RATE UPDATE

interest_rate_update

The Reserve Bank of Australia has again decided to leave the official cash rate at 2.00%.

This decision was forecast by most commentators as the Reserve Bank continues to assess the impact of recent upward movements in the Australian dollar and positive economic news around employment and retail spending.

Complicating the issue is talk that lenders may increase interest rates independent of the Reserve Bank cycle, citing increased funding and regulatory costs.

Therefore even though the cash rate has remained unchanged, it’s still wise for us to talk to ensure you still have the appropriate financial solution for your current circumstances.

Get in touch today to make sure you are taking advantage of regular changes in the increasingly competitive mortgage market.

Kind Regards,
Tom Uhlich
Boss Money

Tom

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PROTECTING YOUR LOVED ONES

Protect yourself, your loved ones, your mortgage and other financial debts if the unexpected should occur.

Paying off a mortgage is a long term financial commitment
If you become sick or injured, would you be able to cover your ongoing mortgage payments?

Let me introduce you to my business partner InsuranceLine, which is part of TAL. TAL is Australia’s largest life insurer, and protects the financial security of nearly 4 million Australians, so they know a thing or two about protecting this great Australian life. In the 2015 financial year they paid nearly $1 billion in life insurance claims and this financial year they are on track to pay $1.5 billion in claims!

InsuranceLine offers affordable and award winning insurance products that can help protect your mortgage and other financial assets in the event of death, sickness or injury.

Life Insurance

  • Life Insurance Plan can help look after your loved ones, whatever the future may hold. It pays a tax-free lump sum in the event of death or diagnosed terminal illness to help your loved ones financially should the unexpected occur.

Income Protection

  • Income Protection can help provide cash flow when you’re out of action through injury or sickness by covering up to 85% of your income. There is also an optional involuntary unemployment benefit to help protect against the unforeseen and provide some additional cash flow whilst looking for work.

Contact me today and provide peace of mind to you and your family!

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PAYOUT TAX DEBTS

Looking for a lender to help you finance tax debts?

If you have a tax debt owing to the Australian Taxation Office, talk to us today. We may be able to help you find the right finance to help you get back on track.

We have products for businesses looking to pay out their past and future tax obligations. We have the experience to help you find the right solution for your unique situation.

  • Focus your time and energy on your business and let us find a solution for you
  • Consolidate your debts and pay your tax at the same time
  • If you’ve been declined before, we still may be able to find a solution that fits
  • Real solutions with the right lending criteria to match your situation

Contact us today to find out about the solutions we may be able to provide for your business.

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WHO DOES YOUR MORTGAGE CONSULTANT REALLY WORK FOR?

When arranging financing for the biggest purchase of your life, you’d think a mortgage consultant would hunt down the most appropriate home loan deal possible for their clients. After all, isn’t that what they’re paid to do?

The answer may surprise you.

While most mortgage consultants do work to find the best financing for their customers, some have a hidden agenda.

Did you know, for example, that big banks own the majority of mortgage consultants?

This leads you to wonder, who really owns your mortgage consultant? Are they truly giving you the best possible deal, or are they actually being swayed by their big brother?

Tom Uhlich, a successful consultant of Boss Money with 25 years finance experience, 12 as a mortgage consultant, believes in being loyal and transparent to all of his clients. Since Tom is not tied to a bank (but was once via his Aussie franchise), he is free to expose one of the best-kept secrets in the finance industry.

Big banks own a large portion of mortgage consultants.

Aussie Home Loans, for example, is 80 percent owned by the Commonwealth Bank (CBA), who also have a 21 percent share in Mortgage Choice. As a result, Aussie & Mortgage Choice have a large share of the consultant market. Is it surprising then that these consultants sell a large portion of CBA loans?

Did you also know Aussie only has 20 lenders on its panel? Likewise, Mortgage Choice has only 25 lenders to choose from. Why wouldn’t they offer a wider choice?

In drastic comparison, Boss Money via its aggregation partner AFG, offers over 40.

The shocking statistics don’t end there. For example, the NAB outright owns 100 percent of Choice, Plan and Fast Mortgage Consultants together, which is more than 30 percent of all consultants. To add to this, Mortgage consultant RAMS is 100% owned by Westpac.

These numbers are eye-opening.

If you are considering seeing a mortgage consultant in the future, it is imperative to beware of this ownership and ask yourself whether the consultant could potentially be biased and not have your best interest at heart.

Boss Money is 100% privately owned and isn’t controlled by any bank. This helps ensure there isn’t any pressure to send your loan to certain lenders. We only want our clients to get the best deal possible, as individual needs require individual finance solutions.

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MONEY MYTHS BUSTED

Making the most of your money often requires common sense more than a commerce degree. We take a look at five money myths that could be holding you back from greater financial freedom. Let’s bust these money myths!

I DON’T EARN ENOUGH TO SAVE

A lack of savings generally has less to do with how much you earn and more to do with how much you spend. Cutting out even small discretionary spends can reap big rewards.

  • Take-away coffee every day at work – around $820 per year.
  • Buying lunch three days a week – more than $1,000 a year.
  • Tuckshop once a week for the kids – more than $250 a year.

Often we don’t save because we think we need to sock away $50 or $100 at a time – and then give up when we discover we don’t have that much left over.
But you can start smaller – much smaller. If you saved $1 a day from age 18 to 65, with compound interest paid at six per cent, you would eventually haul around $96,000. Five dollars a day would eventually turn into close to $480,000.
Compound interest is where interest is paid on the interest already earned. This powerful concept – and patience – is the key to accumulating savings over time.

A SALE IS A CHANCE TO SAVE

A sale is actually a chance to shop, and probably spend either more than you intend or more than you can afford.
Of course you will spend less on an item if you wait for it to go on sale. The problem is many of us discard our shopping list or exceed our budget when faced with a bargain. We focus on how much we could save, not how much we are about to spend.
One way to take advantage of a sale without being distracted by impulse buys is to shop online where it’s easier to look for the best price, make a bee-line for your item and bypass the temptation of other mark-downs. Or if you are hitting the stores, make sure you keep focused on what it is you are looking for and try not to get distracted.

MY HOME WILL FINANCE MY RETIREMENT

If you live in a multi-million dollar home then you might be right. Many of us, however, could be struggling to even pay off our homes by retirement. There is a growing concern among financial experts that many baby boomers will be looking to their superannuation to pay off their mortgages, unlike previous generations who aimed to be without debt by the time they tossed in the work towel.

Instead of paying off the family home, many Australians have been dipping into their home equity to fund their lifestyles, with a view to using their super lump sums to clear the debt. That strategy is likely to push more seniors onto the age pension earlier. At a maximum of about $32,000 per year for a couple, today’s pension falls well short of the estimated $56,000 spend per year for a couple’s comfortable retirement, according to the Association of Superannuation Funds of Australia.

Fast-forward 20 years and that gap is only likely to widen due to the number of retirees outstripping tax-paying workers to fund the social security system.

Even if you do pay off your home ahead of retirement and then downsize, the sale proceeds will probably not be adequate to keep you in the style to which you are accustomed. Generally, you need about 60 to 70 per cent of your pre-retirement annual income for a comfortable lifestyle.

The best way to prepare for retirement is to sock more into super and establish some long-term investments, such as additional property or blue-chip shares. Speak with a financial advisor about the best strategies for your circumstances.

MY BANK WOULD ONLY EVER GIVE ME A CARD LIMIT I CAN AFFORD

When lenders assess how much credit card debt you can handle, they really are stretching things to the limit. They’re not considering your real-life financial responsibilities and discretionary spending. And they are counting on you covering just the minimum repayment each month, so you take as long as possible to clear the debt and pay as much interest as possible.

Regardless of what a lender says you can afford, you need to do the sums yourself. Take out a smaller limit than what’s on offer and make sure you pay off your card each month. If unable to clear the balance each month, always make higher payments than the minimum to pay the debt off as quickly as possible.

If you are already at your limit, look to switch the balance to a low-interest card. The key is to cancel your old card once the balance is transferred and to keep making repayments at the same previous rate, so you clear the debt quicker. You can also take advantage of low-interest introductory offers for a short period to really get ahead of the debt curve.

I’M BETTER OFF RENTING AND PUTTING MY MONEY INTO SHARES

With house prices climbing beyond the grasp of many first-time buyers, it’s not surprising some are tempted to give up their pursuit of property to invest in shares. Financially, there may not be anything wrong with that strategy. Property and the share market are both long-term investments averaging similar capital growth over 10 years, with fluctuations along the way.

One advantage of home ownership, however, is that paying down a mortgage becomes a form of forced savings, with your property growing in value over the long term during those years. If renting, you need to be fairly disciplined to regularly invest a portion of your disposable income. This is where the best intentions can unravel and why, over the long term, home ownership might be the best investment. If things remain the same as they are today, there is no capital gains tax on your owner-occupied home when you later decide to sell.

Everyone’s circumstances are different so make sure you get expert financial advice before deciding on which investments are best for you.

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6 QUIRKY BUT QUICK TIPS TO PAYING OFF DEBT

1. Leave all income from eBay in your PayPal account until the end of the month then use it solely for paying down the mortgage

2. Any money you receive outside your normal salary (all reimbursements, unexpected overtime, etc.) goes to debt

3. Split your monthly payments over 4 weeks for personal/car/student loan = less interest (as accrued daily) and smaller chunks of money going to payments (easier to budget around $147/week than $1,000 full hit)

4. Tricked myself into paying off your mortgage by refinancing from a 30-year to 25-year loan

5. Every fortnight after your mortgage payment comes out, see what its new balance is and pay down the odd numbers to make it a nice even number via online account transfer

6. If you have credit card debt that you’re trying to pay down, pay something as soon as the bill arrives vs waiting until the due date. This simple trick will shave down the interest you pay and help you pay it off quicker.

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RENTAL GROWTH VS CAPITAL GROWTH

It wasn’t surprising to see a recent Corelogic RP Data report showing rental growth has been slower than capital growth over the past decade. This is among the reasons why I always recommend prioritising capital growth prospects over rental returns when purchasing an investment property.

The report shows that across the combined capital cities, rents have increased by 50.7% (or 4.2% per annum) over the past decade compared to an increase in capital values of 72% (or 5.6% per annum).

Looking at different property types, house rents increased by 50.3% while apartment rents increased by 53.7%. Drilling down to the cities, the two capitals with the greatest rental increases were Sydney (no surprise) at 59.4% and Perth at 54.6%.

Rental returns are important because they help you with your loan repayments. That’s their primary purpose at the beginning of your tenure of an investment property.

In most cases, especially in the high value markets of Sydney and Melbourne, the odds are the rent on a newly acquired investment property will not cover your repayments or other costs in their entirety so you’ll be negatively gearing your investment.

Regardless, the rent will still take care of a sizeable chunk of your outlays, thereby reducing the cost of you holding your investment property while time does its thing to deliver capital gains.

However, over time, if you choose to pay the principal and interest on your investment loan; and your rental returns gradually increase year to year, you will eventually get to a point where your rental returns do in fact cover the whole mortgage. And throughout all this, tax benefits such as depreciation, will also have a positive impact. After a bit more time, your rent will start to cover other expenses like strata fees and council rates too. This would take you into positive cash flow territory and that’s an excellent place to be – it’s the dream scenario for retirees.

The way you get to positive cash flow requires good long-term strategy.

Many people say interest-only loans are the way to go with investments because they keep your repayments to a minimum. This is entirely true and a good strategy to adopt if your cash flow is tight. But if you want to get to a point where the rent is covering everything, you’ll generally need to start paying some Principal at some point.

It’s helpful to think about where you want to be in retirement and work backwards from there. But don’t do it alone – sit down with your accountant or financial advisor. You might want to keep your loan at interest-only to keep outlays as low as possible, wait for capital growth; then sell in 10 years for a profit. Another scenario might involve paying the principal and interest to reduce the loan down to positive cash flow as soon as possible, with the intention of creating a strong, debt-free, income-producing asset for life.

Your strategy will depend on your goals and the timeframe you have to achieve them. But if there’s one piece of advice I hope you take when buying an investment it’s this – capital growth first, rental return second. Always.

Article source: http://m.switzer.com.au/the-experts/john-mcgrath-property-expert/rental-growth-vs-capital-growth/

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THE B WORD – BUDGETING

My Budgeting Strategy

Budgeting isn’t exactly my favorite word in the financial dictionary. I typically like to refer to it as “the B-word” because I know how it makes people feel, including myself. Seriously, when you hear the word “budget” how often do you shudder and think to yourself “ugh, I should really have one of those…”

Am I right?!

Some days I try to convince myself that budgets are bad (these are usually the days where my budget doesn’t go exactly as planned, or I forget I have one altogether). Other days, I’m so on top of my shit, I get hyper organized, and I’m hitting my budgeted numbers left and right, with room leftover. Having a budget just. feels. right.

So perhaps I’m not the best “budgeter” per se. However, that doesn’t mean it isn’t right for you. In fact, several of my podcast guests recommend a budget in many different ways and have fantastic tips on sticking to your budget, while some other guests never mention it at all.

Regardless of your choice to keep a budget or not, there are two things I always recommend to my students and clients when it comes to tracking and gaining control of your money, and they happen in a two-step process.

That’s right, just two steps!

Step number one is to simply be aware

It’s all about that one word, awareness. Build awareness around your money, pay attention to where it goes, and you will start setting your own B-Word without even knowing it.

“Oh, all of a sudden that Visa credit card has $750 on it, usually I’m only at $400, WTF is going on?!”
That’s all it takes. You just budgeted yourself. Yes, maybe it’s the most general sense of the word, but it’s a start.

It’s all about building awareness in order to begin. Check your bank and credit card statements once a week for about 10 minutes. Tally up how much you spent on going out for lunch or buying shoes, don’t worry about setting boundaries, just tally and be aware of the number you hit each week.

Step number two: give your money a home

Now that you’ve built awareness around your money and where it’s going, let’s give it a place to go with meaning. It’s like controlling a crowd in a large event space, but instead of “crowd control” it’s “money control.”

I’m sorry, that’s the best analogy I could come up with. You’re now a bank account bouncer. You sit on a stool with a RBF (urban dictionary it) and when cute girls try to sweet-talk their way in for free, you say “All good things in life ain’t free sweetie” without even the slightest hint of a smirk, and take their five bucks. **You’re unbreakable!**

….okay now I’m really sorry! Back to step two:

Someone once said to me, “If we don’t tell our money where to go, it will just go.”

“Go where?” I asked. And that’s exactly it, it will just go. You won’t know where it’s going because you’re not giving it a home.

The first step of your B-Word is to be aware of your money and where it’s mindlessly flowing, and the second step is to tell it where to go with gumption.

You might think, “Well, why should I tell my money where to go when all of it has to go to pay off my debt anyway?” Well then, YOU get to have the power to tell your money to go to your student loan debt each month. You have so much control over your money that you tell it to pay off that credit card. Then you decide when it flows to that shoe fund and how it gets allocated to your social life.

IT’S YOUR MONEY AND YOU NEED TO CLAIM CONTROL OVER IT AND TELL IT WHERE IT GOES

And this isn’t just for you’re spending. You also need to guide the money you have earned to your savings goals, your investments, and even designate it to just sit and do absolutely nothing from time-to-time.

YOUR MONEY NEEDS MEANING, AND YOU HAVE ALL THE POWER AND CONTROL TO GIVE IT THAT MEANING

My challenge to you this week is to start building awareness around your money. Check in on it like you used to check in on that toddler you once babysat in 8th grade. Make sure it’s not eating away at all your chances at freedom by way of makeup from Sephora and Lululemon yoga pants. Unless that’s what freedom means to you, then by all means…

 
Article source: http://www.tesswicks.com/blog/mybudgetingstrategy

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RESEARCH AND HAVING THE RIGHT PEOPLE TO HELP YOU ARE THE KEYS WHEN INVESTING IN PROPERTY

It definitely pays to do your homework on the property market before you dive in, and we’re thrilled to be on board to help you when it comes to financing your decision. Recent share market slides, tight rental markets in most capital cities and a whiff of increase in property prices are seeing many mum and dad investors retreat to bricks and mortar.

Generally, property in Australia is still considered to be a sound investment due to steady and consistent increases over time.

But it’s not a quick win. Property usually has a seven to ten year cycle, with highs, lows and steady stints in between.

Fortunately, an ongoing housing shortage in Australia and a tax system that allows negative gearing on property (where any investment losses can be claimed as tax deductions) continue to favour housing as a solid, long-term investment.

But credit has tightened in the wake of the Global Financial Crisis so lenders are more cautious about who borrows and for what. Your consultant is your best ally in finding the right lender and loan for your circumstances in this new environment. They can also wade through the many investment loan options on offer, leaving you more time to find the ideal property.

Want to talk investing?

Whatever your circumstances, your consultant will find the deal that’s right for you, not the lender. We can arrange for a mortgage consultant near you to get in touch.

HERE ARE SOME TIPS TO HELP YOU FIND THE RIGHT RENTAL AND REAP THE MOST REWARDS.

Unit or house?

House prices often increase in bigger strides than units, offering more potential for capital gain over time. But a rental home also comes with added responsibilities, including gardens and lawns (and sometimes a pool) to maintain.

A unit or townhouse may not increase in value as quickly, but they are generally easier to maintain and may even be easier to rent for that very reason, depending on location, condition and size.

Location, location.

Of course, you’ve heard this before. But location can mean different things when it comes to rental properties. Renters are often looking for maximum convenience so consider properties near schools, major shopping centres and public transport.

Spend plenty of time researching target areas, including recent property price movements and future predictions, rental vacancy rates and any proposed infrastructure improvements. You should also do some scouting as if you were a renter to get a first-hand look at the local market.

Remove the emotion

One of the worst mistakes you can make with any investment is to buy with your heart instead of your head. Remember, your rental property is not your ‘home sweet home’.

A well-presented property is desirable, but think sensible, not swank.

Ideally, you want a neutral interior colour scheme, serviceable and resilient flooring and window coverings, a low-maintenance yard and good storage. And if buying an older style unit, look for one with an internal laundry, a garage or car space and few stairs (unless there’s a great view to be had higher up, which can add to the property value).

Don’t forget the extras

An investment property requires regular financial commitment beyond the loan repayments. Make sure you have the capacity to cover land and water rates and any maintenance and repair costs. Tenants are entitled to repairs or replacements as quickly as possible under their rental agreement, so you will need to have the means to pay.

Apartments or units also come with body corporate fees, which can run to thousands in some modern complexes with professional landscaping and shared amenities, such as swimming pools.

Cover your investment

Make sure you take out landlord’s insurance. This will cover you for damage caused by a tenant and unpaid rent if a tenant skips out, in addition to other standard risks, such as a house fire or a storm.

If you invest in a strata title property, make sure the body corporate has sufficient building insurance to cover the cost of rebuilding the complex in today’s prices. It’s often hard to work out what you need to cover versus what the body corporate covers. A good rule of thumb is everything from the wall paint inward is yours and everything outside of that is covered by the body corporate.

Any interest?

Many property investors take advantage of interest-only loans because interest payments are tax deductible. That means you’re taking a punt that the property’s value will increase over time, leaving you with a financial gain in the long run.

This is a good strategy for high income earners who are taking advantage of negative gearing. If you choose to positive gear your investment (i.e. generate a profit from the rental income after costs), you might want to consider a principal and interest loan and use the profit to shave off the principal.

Just remember, you will pay tax on any income from your investment. Talk to your accountant about your tax situation so your consultant can find the right loan.

Taking ownership

Couples taking advantage of negative gearing should put the investment property mostly or fully in the name of the highest earner to reduce their taxable income. If you need both incomes to be considered in the lending equation, speak with your consultant to get the right advice on the best ownership equation for your circumstances.

Appreciate depreciation

The ATO will give you a discount off your tax bill for wear and tear on property. It’s known as depreciation, and can be a very handy windfall for investors, especially if you buy a new property.

The formula is quite complex and depends on the age of your property, building materials and the various fittings. That’s where a professional quantity surveyor comes in. For a fee (often around $600), they’ll assess the property and complete a Tax Depreciation Schedule, which your accountant will incorporate in your tax return.

Manage your investment

Managing a property takes time and energy. If you don’t have much to spare of either, you should get a professional property manager to advertise the rental, screen and select tenants, collect and pay the rent, co-ordinate repairs and maintenance, provide condition reports and manage any disputes. Ask other local landlords for referrals for reputable managers.

You should also conduct twice-yearly inspections yourself. Any associated costs, including travel and accommodation, are tax deductible.

If you decide to self-manage, you will need to be well-versed on tenancy laws and prepared to organise repairs, including those that arise after hours.

AFG understands every borrower has unique circumstances – and that some are more complex than others. Our consultants know from vast experience which lenders will work with investment customers who have more complicated requirements, and will negotiate on your behalf.

Investing FAQs

Why invest in property?
Australians are among the most active property investors in the world, with an average of one in every three new mortgages each month arranged for investors. Most of these investors are ordinary people with ordinary jobs earning ordinary incomes. So, why is property investment so popular?

Capital growth. Capital growth is the increase in value of property over time and the long term average growth rate for Australian residential property is about 9% a year. Importantly, because property markets move in cycles, property values go through periods of stagnation as well as decline. This is why taking an investment view of at least 10 years is important. Note: if your investment property increases by 7.5% a year, over a 10 year period it will double in value.

Rental income. Rental income, also known as yield, is the rent an investment property generates. You can calculate this by dividing the annual rent by the price paid for the property and multiplying it by 100 to produce a percentage figure. As a general rule, more expensive properties generate lower yields than more moderately priced properties. There is also usually a direct, inverse relationship between capital growth and rental income. Those properties producing a lower rental yield will often deliver greater capital growth over the long term.

Tax benefits. The Federal Government allows you to offset against your taxable income any losses you incur from owning an investment property. For example, if the amount you receive in rent from tenants is $5,000 less than the cost of servicing the mortgage, and paying rates, water and other fees associated with the property, at the end of the year you can add that $5,000 to the amount of income on which you don’t have to pay tax. If you work as an employee, with income tax automatically deducted from your pay, this means you’ll receive a refund from the Australian Taxation Office (ATO) after the end of the financial year.

Low volatility. Property values generally fluctuate less than the stock market. Many investors say they experience greater peace of mind for this reason.

Leverage. Property enables far greater leverage than many other investments. For example, if you have $100,000 in savings, you could invest it in a portfolio of shares, or use it to buy a property worth $500,000 by taking out a mortgage for $400,000. If shares go up by 10% during the year, your share portfolio would be worth $110,000 and you would have gained $10,000. If property goes up by 10% during that same year, your property would be worth $550,000 and you would have gained $50,000.

You don’t need a big salary to invest. If you are buying to invest, lenders will take rental income as well as your own income into their assessment. If you already own your own home and have some equity in it, you may be able to use this as a deposit, meaning that you can buy an investment property without having to find any additional cash. If you don’t own your own home and feel you may never be able to afford one, buying an investment property may be a good stepping stone to one day being able to afford your own home.

What’s the difference between an investment loan and an ordinary home loan?
Most of the same types of home loans and loan features apply for investors as for owner occupiers. Some lenders may charge higher rates for investment properties if the associated risks are higher.

Can I use equity in my home as a deposit for an investment property?
Many an investor has started out by utilsing the equity of their own home. Banks will usually accept equity in a home (or other property) as additional collateral against which they are prepared to lend. This means you could potentially borrow the full purchase price of the property, as well as all costs (stamp duty and other fees) without having to contribute any cash. The risk in using your home as collateral is that if you can’t fund the mortgage for the investment property, the investment property and your home are at risk. Contact a consultant to discuss your options.

What is negative gearing?
This is when the cost of owning a property is higher than the income it produces. If the rent you get for an investment property is less than the interest repayments, strata fees, maintenance and other costs, your investment is negatively geared, or making a loss. This loss can be offset against your income, reducing your income tax bill.

How much money can I borrow?
We’re all unique when it comes to our finances and borrowing needs. Get an estimate on how much you could borrow with our fast and clever loan options tool. Or contact a consultant who can help with calculations based on your circumstances.

How do I choose the loan that’s best for me?
Our guides to loan types and features will help you learn about the main options available. There are hundreds of different home loans available, so contact your consultant who can recommend the best loan(s) for you.

How much do I need for a deposit?
Usually between 5% – 10% of the value of a property, which you pay when signing a Contract of Sale. Speak to your consultant to discuss your best options for a deposit. You may be able to use the equity in your existing home or an investment property.

How much will regular repayments be?
Go to our Repayment Calculator for an estimate. Because there so many different loan products, some with lower introductory rates, contact a consultant for all the deals currently available and the right loan set-up for you.

How often do I make home loan repayments – weekly, fortnightly or monthly?
Most lenders offer flexible repayment options to suit your pay cycle. Aim for weekly or fortnightly repayments, instead of monthly, as you will make more payments in a year, which will shave dollars and time off your loan.

What fees/costs should I budget for?
There are a number of fees involved when buying a property. To avoid any surprises, the list below sets out all of the usual costs:

  • Stamp Duty – This is the big one. All other costs are relatively small by comparison. Stamp duty rates vary between state and territory governments and also depend on the value of the property you buy. You may also have to pay stamp duty on the mortgage itself. To find out your total Stamp Duty charge, visit our Stamp Duty Calculator.
  • Legal/conveyancing fees – Generally around $1,000 – $1500, these fees cover all the legal rigour around your property purchase, including title searches.
  • Building inspection – This should be carried out by a qualified expert, such as a structural engineer, before you purchase the property. Your Contract of Sale should be subject to the building inspection, so if there are any structural problems you have the option to withdraw from the purchase without any significant financial penalties. A building inspection and report can cost up to $1,000, depending on the size of the property. Your conveyancer will usually arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Pest inspection – Also to be carried out before purchase to ensure the property is free of problems, such as white ants. Your Contract of Sale should be subject to the pest inspection, so if any unwanted crawlies are found you may have the option to withdraw from the purchase without any significant financial penalties. Allow up to $500 depending on the size of the property. Your real estate agent or conveyancer may arrange this inspection, and you will usually pay for it as part of their total invoice at settlement (in addition to the conveyancing fees).
  • Lender costs – Most lenders charge establishment fees to help cover the costs of their own valuation as well as administration fees. Your consultant can let you know what your lender charges but allow about $600 to $800.
  • Moving costs – Don’t forget to factor in the cost of a removalist if you plan on using one.
  • Mortgage Insurance costs – If you borrow more than 80% of the purchase price of the property, you’ll also need to pay Lender Mortgage Insurance. You may also choose to take out Mortgage Protection Insurance. If you buy a strata title, regular strata fees are payable.
  • Ongoing costs – You will need to include council and water rates along with regular loan repayments. It is important to also take out building insurance and contents insurance. Your lender will probably require a minimum sum insured for the building to cover the loan, but make sure you actually take out enough building insurance to cover what it would cost if you had to rebuild. Likewise, make sure you have enough contents cover should you need to replace everything if the worst happens. AFG provides both home building and contents insurance. Speak with your consultant to obtain an estimate.
    Landlord’s insurance provides standard building and contents cover plus cover for theft or malicious damage to the property by tenants and covers loss of rent in certain circumstances. It also covers the owner’s liability (e.g. if a tradesperson is injured while working in the property). Landlord’s insurance is an affordable extra safeguard and strongly recommended for all investors. AFG provides competitive Landlords Insurance – speak with Boss Money today for an estimate.
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FINANCE SOLUTIONS TO HELP YOU GROW YOUR BUSINESS

Are you looking to set up your own business? Or perhaps you would like to access equipment finance to help your endeavours grow?
Whatever your situation, AFG has a suite of commercial finance solutions to suit your needs.
AFG provides professional advice on a full range of commercial and business finance options that includes equipment finance, business loans, debtor finance, commercial property finance and property development.
Building on the formidable relationships that AFG has developed with Australia’s leading financial institutions in the residential mortgage sector, AFG is able to provide access for commercial lending clients to a product range and level of professional service that is second to none.
To stay one step ahead, we are also continually sourcing new lenders, whether they are mainstream, non-bank or private lenders. This is part of our commitment to providing the best choice and service possible to you.

Need to grow your business?

Whatever your circumstances, your consultant will find the deal that’s right for you, not the lender. We can arrange for a mortgage consultant near you to get in touch to discuss your options.

What can a commercial consultant do for my business?

It’s not just about finding good interest rates and saving you money. It’s about providing opportunities for you to make money and build your business.
The first thing we do is to meet you and get an understanding your business and what you need to make it grow. The better we get to know you, the better we can match the right product with your needs. And there are many ways we can help you finance your business growth.
If you want to protect your cash flow, it makes sense to use equipment finance to avoid outlaying a large sum all at once. Reassessing your options and refinancing with a new business loan product can protect hard earned profits with reduced fees and better rates; or it can be a chance to simplify your financing to make things easier to manage. Debtor finance can unlock cash from invoices as soon as they are issued. It can also remove the family home from the lenders security position.
And property finance can secure better premises or help develop new ones. Longer loans available with some lenders can take pressure off your cash flow.
And because we’re in constant contact with the lenders we can also advise you on lenders’ criteria to assist you in getting a quick and successful approval.
At the end of the day, it’s like having your own personal CFO or Financial Controller working for you on call, anytime, but without the big salary on your payroll.

Vehicle and equipment finance can be the smart way to go for many businesses

AFG’s equipment financing solutions will enable your clients’ businesses access to the latest technology without a large outlay, whether it be light vehicles, plant equipment or IT. The solutions will assist them to preserve their working capital, helping you keep their business up-to-date and ahead, and offer a flexible payment plan that fits with their business’s cash flow.
The benefits can include:

  • With no capital outlay required, financing frees up cash for the day to day running of your client’s business.
  • Budgeting is much easier as repayments are fixed for the term of the agreement.
  • You can arrange one off pre approvals or a line of credit. This gives your clients the security to purchase the equipment you want when they want.
  • As repayments are fixed for the term of the agreement they are protected against inflation.
  • Equipment finance allows your clients to pay for the equipment from the income they are generating from its use.
  • Clients have the ability to source their equipment and negotiate a price independently.

Let’s keep it simple

It’s easier. We start by meeting you at a time and place that suits you – at home, your office or over a coffee – we’re always flexible. We’ll look at your current loans, financial circumstances and then research and find the right solution for you. We take care of the paperwork and manage the application process through to approval.
It’s simplier. We can take hassle out of dealing with the lenders. Experienced consultants understand Bank jargon and can cut through the red tape to organize your application and secure your finance as quickly as possible.
It’s more than just loans. Lenders may and sell you additional products and services you may not require or are available at a better price elsewhere. Consultants will know what you want and arrange it at a competitive cost.
It’s all about you. We work for you and not the bank. Unlike the banks we get to know you personally to understand your unique circumstances. From our experience we know which lenders will have the best product to meet what it is you need from your finance. And we negotiate for what’s best for you, not the lenders.

Why wouldn’t I just go straight to a bank?

The banks will want everything, your house, your business and all that is associated with them.
There are a lot of options out there, which makes it hard for most people to choose the right product for them. Sometimes, having all your finances with the one Bank may not be the right option. And, with the Reserve Bank moving official interest rates and banks moving them independently, it’s an ever-changing market. Not to mention all the new products that are constantly introduced.
With choice comes complexity. It can get tricky to navigate through it all. And it can take a lot of your time. A mortgage consultant will steer you through this to find the finance product that suits your business’s needs and not the banks’. We then deal with the lender and manage your application process through to approval.
In the simplest terms, a mortgage consultant makes it easy – saving you time and, hopefully, a lot of money.

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REVIEWING YOUR FINANCES?

Many people refinance their homes or investment properties to reduce their monthly home loan repayments. What other aspects of your finances can you review to help save money?

1. Review the frequency of your home loan repayments

If you are paid weekly or fortnightly, see if you can change the frequency of your home loan repayments to fit in (this may not be possible on all products). Because the interest on your home loan is calculated daily, making a payment two weeks earlier each month saves you money in the long term, and in the short term helps make ongoing budgeting easier.

2. Consolidate debt

If you’re paying high rates of interest for debt on credit and store cards – each of which will probably have an annual charge – think of consolidating debt in one place. You may very well be able to access a lower overall interest rate, reducing your monthly outgoings. You will avoid paying duplicate fees. Plus, a single monthly debt repayment is easier to manage than having to pay multiple credit card bills.

3. Cars

Cars are often the biggest family expense after home loan repayments. But as family needs change over time, and the price of petrol rises, we can find we have more expensive cars than we need. Could you downsize your car/s, not only reducing monthly repayments, but also potentially saving in maintenance, insurance and fuel costs? Have you thought about buying a scooter for short, local trips? Are you getting the best deal for the money you spend on your car insurance and repairs?

4. Insurance

There are three ways you may be able to save money on your insurance premiums. First, shop around when your renewals fall due rather than simply continue with your existing provider.
Also, you may be able to reduce monthly premiums raising the excess payable, or improving the security on your home.
Finally, some insurers provide discounted rates for bundling together policies such as home, contents, car, health or life insurance. Perhaps you could make an overall saving this way?
Organising your insurance through a consultant could save you money. For example if you take out home insurance you could be eligible a discounted policy through one of our preferred insurance partners. Why not get a complimentary quote? What have you got to lose?

5. Clear out the shed!

Perhaps you have items of value gathering dust in your shed or garage? Whether you hold an old-fashioned garage-sale or go onto e-bay, perhaps now is a good time to get money for the belongings you’re never going to use.

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4 COMMON QUESTIONS ASKED ABOUT A MORTGAGE CONSULTANT

What is a Mortgage Consultant?

From our panel of 40+ lenders our Specialist Mortgage Consultants will find the right loan for you. Individual needs require individual finance solutions.

Why use a Mortgage Consultant?

While most mortgage consultants are disorganised, biased towards one lender and poorly trained, we are setting an example by delivering what we promise: a higher level of service, better advice and better home loans.

We are experts in the lending guidelines used by the major banks and other lenders.
We deal with a wide variety of lenders and know their policies back to front, as well as the hidden catches and potential problems you might face.

How does a Mortgage Consultant get paid?

Our services are free, as we get paid by the lender for doing the work that would otherwise be done by a bank manager and more often than not, can get you a better deal than going to the bank directly.
Did you know that some larger mortgage consulting companies are part owned by one of the banks?
We are privately owned and can arrange loans with the four major banks as well as several reputable non-bank lenders.

Why should I use a mortgage consultant if I can go with a bank?

Unlike your bank, we have over 40 different lenders to choose from with a range of different policies so you can be confident about getting your home loan approved and not damaging your credit file.
Following up on the progress of your loan can be stressful and time consuming. That’s why we deal with the banks so that you don’t have to. We have efficient systems in place to track your loan and provide you with timely updates.

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50 WAYS TO LIVE HAPPIER, HEALTHIER AND WEALTHIER

1. Stop consuming caffeine

Although people think they perform better on caffeine, the truth is, they really don’t. Actually, we’ve become so dependent on caffeine that we use it to simply get back to our status-quo. When we’re off it, we underperform and become incapable.

Isn’t this absurd?

With healthy eating, sleeping, and exercise, your body will naturally produce far more and better energy than caffeine could ever provide. Give it up and see what happens. You will probably get withdrawal headaches. But after a few days, you’ll feel amazing.

2. Pray or meditate morning, mid-day, and night

In a recent interview at the Genius Network mastermind event, Joe Polish asked Tony Robbins what he does to get focused. “Do you meditate? What do you do?” Joe asked.

“I don’t know that I meditate. I don’t know that I want to meditate and think about nothing,” Tony responded, “My goal is clarity.”

Instead of full-on meditation, Tony has a morning routine that includes several breathing exercises and visualization techniques that get him to a state of clarity and focus. For me, I use prayer and pondering (my version of meditation) as the same vehicle.

Whatever your approach, the goal should be clarity and focus. What do you want to be about today?

What few things matter most during the next 24 hours?

I’ve gotten the best results as my morning prayer and meditation are motivational; my afternoon prayer and meditation are strategic; and my evening prayer and meditation are evaluative and educational.

3. Read 1 book per week

Ordinary people seek entertainment. Extraordinary people seek education and learning. It is common for the world’s most successful people to read at least one book per week. They are constantly learning.

I can easily get through one audiobook per week by just listening during my commute to school and while walking on campus. Taking even 15–30 minutes every morning to read uplifting and instructive information changes you. It puts you in the zone to perform at your highest.

Over a long enough period of time, you will have read hundreds of books. You’ll be knowledgeable on several topics. You’ll think and see the world differently. You’ll be able to make more connections between different topics.

Reference #19 on this list if you feel you’re “too busy” to read one book per week. There are methods to make this task extremely easy.

4. Write in your journal 5 minutes per day

This habit will change your life. Your journal will:

  • Clear your emotions serving as your personal therapist
  • Detail your personal history
  • Enhance your creativity
  • Ingrain and enhance your learning
  • Help you get clarity on the future you want to create
  • Accelerate your ability to manifest your goals
  • Increase your gratitude
  • Improve your writing skills
  • Lots more

Five minutes per day is more than enough. Greg McKeown, author ofEssentialism, recommends writing far less than you want to — only a few sentences or paragraphs at most. This will help you avoid burnout.

5. Marry your best friend

“For all the productivity and success advice I’ve read, shaped and marketed for dozens of authors in the last decade, I’ve never really seen someone come out and say: Find yourself a spouse who complements and supports you and makes you better.” — Ryan Holiday

Research done by economists have found — even after controlling for age, education, and other demographics — that married people make 10 to 50 percent more than single people.

Why would this be?

Being married gives you a higher purpose for being productive. You are no longer a lone ranger, but have another person who relies on you.

Marriage also smacks you in the face with what’s really important in life. Sure, hanging out and partying are fun. But too many people get stuck in this phase and miss the meaning that comes from building a life with someone.

You will never find a better personal development seminar or book than marriage. It will highlight all of your flaws and weaknesses, challenging you to become a better person than you ever thought possible.

6. Make a bucket list and actively knock items off

Most people have it backwards — they design their ambitions around their life, rather than designing their life around their ambitions.

What are the things you absolutely must do before you die?

Start there.

Then design your life around those things. Or as Stephen Covey explained inThe 7 Habits of Highly Effective People, “Begin with the end clearly in mind.”

7. Stop consuming refined sugar

If you stop consuming sugar, your brain will radically change. Actually, study after study is showing that refined sugar is worse for our brains than it is for our waistlines. According to Dr. William Coda Martin, refined sugar is nothing more than poison because it has been depleted of its life forces, vitamins and minerals.

Refined sugar has now been shown to make us cranky, make us make rash decisions, and make us stupid.

Again, like caffeine, if you stop eating refined sugar, you will experience some negative withdrawals. But, like any good habit, the effects of this will be seen in the long-run. What would your health be like a year from now (or five) if you were completely refined sugar-free?

8. Fast from all food and caloric beverages 24 hours once per week

One-day (24-hour) food fasts are a popular way to maintain health and vigor. Fasting leverages the self-healing properties of the human body. Radical health improvements occur when the digestive system is given rest and the organs get ample time to repair and heal themselves.

A regular practice of fasting can:

  • Improve digestive efficiency
  • Increase mental clarity
  • Increase physical and mental vigor
  • Remove toxins
  • Improve vision
  • Give a general feeling of well being

Like all the other habits, fasting gets easier with practice. I’ve been fasting for years and it’s one of the best things I have done for my health.

Fasting is also one of the most recognized techniques in religious and spiritual practices. I also use fasting to get spiritual clarity and refinement.

Honestly, I could go on for hours about this one. Give it a try. You’ll never be the same.

9. Fast from the internet 24 hours once per week

Your body gets an intervention when you fast. Your mind and relationships could use one too. Unplug yourself from the matrix.

If you haven’t caught on already, human beings are highly addictive creatures. We love our coffee, sugar, and internet. And these things are all great. But our lives can be far more enhanced by using these tools in wisdom.

The purpose of the internet fast is to reconnect to yourself and your loved ones. So, you probably shouldn’t do it the same day you do your food fast. Because eating is one of the strongest ways to form bonds.

You’ll be blown away by how much more connected you feel to your loved ones when you can give them your undivided attention. It may even feel awkward for a while having a real-life conversation without looking at your phone every three minutes.

10. Stop consuming the news or reading the newspaper

Although the amount of warfare and deaths by human hands are reducing globally, you will not get that message watching televised news or reading the newspaper.

On the contrary, these media outlets have an agenda. Their goal is to appeal to your fears by inflating extreme cases — making them seem normal and commonplace. If they didn’t do so, their viewership would plummet. Which is why Peter Diamandis, one of the world’s experts on entrepreneurship and the future of innovation has said, “I’ve stopped watching TV news. They couldn’t pay me enough money.”

You can get high quality news curated from Google news. When you detox from the toxic filth that is public news, you’ll be startled as your worldview becomes radically more optimistic. There is no objective reality. Instead, we live in perceived realities and are thus responsible for the worldview we adopt.

11. Do something everyday that terrifies you

“A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have.” — Tim Ferriss

But you don’t have to constantly be battling your fears. Actually, Darren Hardyhas said that you can be a coward 99.9305556% of the time (to be exact). You only need to be courageous for 20 seconds at a time.

Twenty seconds of fear is all you need. If you courageously confront fear for 20 seconds every single day, before you know it, you’ll be in a different socio-economic and social situation.

Make that call.

Ask that question.

Pitch that idea.

Post that video.

Whatever it is you feel you want to do–do it. The anticipation of the event is far more painful than the event itself. So just do it and end the inner-conflict.

In most cases, your fears are unfounded. As Seth Godin has explained, our comfort zone and our safety zone are not the same thing. It is completely safe to make an uncomfortable phone call. You are not going to die. Don’t equate the two. Recognize that most things outside your comfort zone are completely safe.

12. Do something kind for someone else daily

“Have I done any good in the world today? Have I helped anyone in need? Have I cheered up the sad and made someone feel glad? If not, I have failed indeed. Has anyone’s burden been lighter today, because I was willing to share? Have the sick and the weary been helped on their way? When they needed my help was I there?” — Will L. Thompson (music and text)

If we’re too busy to help other people, we’ve missed the mark. Taking the time to spontaneously — as well as planned — helping other people is one of the greatest joys in life. Helping others opens you up to new sides of yourself. It helps you connect deeper with those you help and humanity in general. It clarifies what really matters in life.

As Thomas Monson has said, “Never let a problem to be solved become more important than a person to be loved.” That would truly be a failure.

13. Go to bed early and rise early

According to countless research studies, people who go to bed and rise early are better students. Harvard biologist Christoph Randler found that early sleep/risers are more proactive and are more likely to anticipate problems and minimize them efficiently, which leads to being more successful in the business.

Other benefits of going to bed and rising early — backed by research — include:

  • Being a better planner
  • Being holistically healthier as individuals
  • Getting better sleep
  • More optimistic, satisfied, and conscientious

Waking up early allows you to proactively and consciously design your day. You can start with a morning routine that sets the tone for your whole day. You show self-respect by putting yourself first. In your morning routine, you can pray/meditate, exercise, listen to or read inspiring content, and write in your journal. This routine will give you a much stronger buzz than a cup of coffee.

14. Get 7+ hours of sleep each night

Let’s face it: sleep is just as important as eating and drinking water. Despite this, millions of people do not sleep enough and experience insane problems as a result.

The National Sleep Foundation (NSF) conducted surveys revealing that at least 40 million Americans suffer from more than 70 different sleep disorders; furthermore, 60 percent of adults, and 69 percent of children, experience one or more sleep problems a few nights or more during a week.

In addition, more than 40 percent of adults experience daytime sleepiness severe enough to interfere with their daily activities at least a few days each month — with 20 percent reporting problem sleepiness a few days a week or more.

On the flip side, getting a healthy amount of sleep is linked to:

  • Increased memory
  • Longer life
  • Decreased inflammation
  • Increased creativity
  • Increased attention and focus
  • Decreased fat and increased muscle mass with exercise
  • Lower stress
  • Decreased dependence on stimulants like caffeine
  • Decreased risk of getting into accidents
  • Decreased risk of depression

And tons more… Google it.

15. Replace warm showers with cold ones

Tony Robbins doesn’t consume caffeine at all. Instead, he starts every morningby jumping into a 57-degree Fahrenheit swimming pool.

Why would he do such a thing?

Cold water immersion radically facilitates physical and mental wellness. When practiced regularly, it provides long-lasting changes to your body’s immune, lymphatic, circulatory and digestive systems that improve the quality of your life. It can also increase weight-loss because it boosts your metabolism.

A 2007 research study found that taking cold showers routinely can help treat depression symptoms often more effectively than prescription medications. That’s because cold water triggers a wave of mood-boosting neurochemicals which make you feel happy.

To me, it increases my willpower and boosts my creativity and inspiration. While standing with the cold water hitting my back, I practice slowing my breathing and calming down. After I’ve chilled out, I feel super happy and inspired. Lots of ideas start flowing and I become way motivated to achieve my goals.

16. Say “No” to people, obligations, requests, and opportunities you’re not interested in from now on

“No more yes. It’s either HELL YEAH! or no.” — Derek Sivers

Your 20 seconds of daily courage will most consistently involve saying “no” to stuff that doesn’t really matter. But how could you possibly say “no” to certain opportunities if you don’t know what you want? You can’t. Like most people, you’ll be seduced by the best thing that comes around. Or, you’ll crumble under other people’s agendas.

But if you know what you want, you’ll have the courage and foresight to pass up even brilliant opportunities — because ultimately they are distractors from your vision. As Jim Collins said in Good to Great, “A ‘once-in-a-lifetime opportunity’ is irrelevant if it is the wrong opportunity.”

17. Say “Thank you” every time you’re served by someone

It’s amazing when you meet someone who is expressively and genuinely grateful. It’s amazing because, frankly, it’s rare.

I remember one day while working as a busser of a restaurant as a teenager. Every time I went by a certain table, whether I was refilling waters, bringing food, anything… the kid at the table (no more than 20 years old) graciously said “thank you.” I even heard him from close proximity saying it to all the other employees when they stopped by his table.

This experience had a dramatic impact on me. It was so simple what he was doing. Yet, so beautiful. I instantly loved this person and wanted to serve him even more.

I could tell by how he looked in my eyes when saying “thank you” that he meant it. It came from a place of gratitude and humility.

Interestingly, one study has found that saying “thank you,” facilitated a 66 percent increase in help offered by those serving. Although altruism is the goal, don’t be surprised as your habit of graciously saying “thank you” turns into even more to be thankful for.

18. Say “I love you” 3+ times a day to the most important people in your life

According to neuroscience research, the more you express love (like gratitude), the more other people feel love for you. Sadly, people are taught absurd mindsets about being vulnerable and loving in relationships. Just this morning, my wife and I had to coax and prod our three foster kids to say one nice thing about each other, and to say they loved each other.

It took several minutes for our 8 year old foster boy to muster the strength to say he loved his sister. Yet, all of our kids constantly berate and belittle each other.

You know the feeling: when you want to say “I love you” but hold back. What a horrible feeling.

Why do we hesitate to express our love?

Why do we hesitate to connect deeply with others?

This may be strange, but if you tell your friends and family you love them,they’ll be blown away. I once knew a Polynesian missionary who told everyone he loved them. It was clear he was sincere.

I asked him why he did it. What he told me changed my life. “When I tell people I love them, it not only changes them, but it changes me. Simply by saying the words, I feel more love for that person. I’ve been telling people all around me I love them. They feel treasured by me. Those who know me have come to expect it. When I forget to say it, they miss it.”

“The bitterest tears shed over graves are for words left unsaid and deeds left undone.” –Harriet Beecher Stowe

19. Consume 30 grams of protein within the first 30 minutes of waking up

Donald Layman, professor emeritus of nutrition at the University of Illinois, recommends consuming at least 30 grams of protein for breakfast. Similarly, Tim Ferriss, in his book, The 4-Hour Body, also recommends 30 grams of protein 30 minutes after waking up.

According to Tim, his father did this and lost 19 pounds in one month.

Protein-rich foods keep you full longer than other foods because they take longer to leave the stomach. Also, protein keeps blood-sugar levels steady, which prevents spikes in hunger.

Eating protein first decreases your white carbohydrate cravings. These are the types of carbs that get you fat. Think bagels, toast, and donuts.

Tim makes four recommendations for getting adequate protein in the morning:

  • Eat at least 40% of your breakfast calories as protein
  • Do it with two or three whole eggs (each egg has about 6g protein)
  • If you don’t like eggs, use something like turkey bacon, organic pork bacon or sausage, or cottage cheese
  • Or, you could always do a protein shake with water

For people who avoid dairy, meat, and eggs, there are several plant-based proteins. Legumes, greens, nuts, and seeds all are rich in protein.

20. Listen to audiobooks and podcasts on 2x speed, your brain will change faster

Listening to audiobooks at normal speed is so three years ago. There is a going trend — particularly in Silicon Valley — to listen to audiobooks at 150 or 200 percent called “speed listening.”

In 2010, the tech blog GigaOm suggested “speed-listening to podcasts” as an overall time-saving technique. Software called FasterAudio promises to “cut your audio learning time in half.”

If you want to get hardcore, a particularly useful tool is Overcast — a podcast-playback app with a feature called Smart Speed. Smart Speed isn’t about simply playing audio content at 150 or 200 percent of the standard rate; but actually attempts algorithmically to remove fluff (e.g., dead air, pauses between sentences, intros and outros) that bulks up the play time of audio content.

Use this technique and you’ll be consuming as much information as you once consumed caffeine.

21. Decide where you’ll be in five years and get there in two

“How can you achieve your 10 year plan in the next 6 months?” — Peter Thiel

There is always a faster way than you originally conceive. Actually, goal-setting can slow your progress and diminish your potential if you rely too heavily upon it.

In an interview with Success Magazine, Tim Ferriss said that he doesn’t have five or ten year goals. Instead, he works on “experiments” or projects for a 6–12 week period of time. If they do extremely well, the possible doors that could open are endless. Tim would rather play to the best possibilities than get stuck on one track. He says this approach allows him to go drastically farther than he could ever plan for.

22. Remove all non-essentials from your life (start with your closet)

“You cannot overestimate the unimportance of practically everything.” — Greg McKeown

Most of the possessions you own, you don’t use. Most of the clothes in your closet, you don’t wear. Get rid of them. They are sucking energy from your life. Also, they are dormant value waiting to be exchanged for dollars.

Getting rid of underutilized resources is like injecting motivation and clarity into your bloodstream. While all of that untapped energy gets removed, a new wave of positive energy comes into your life. You can use that energy in more useful and productive ways.

23. Consume a tablespoon of coconut oil once per day

Coconut oil is one of the healthiest foods on the planet.

Here are 7 reasons you should eat coconut oil every single day:

  • It boosts HDL (good) cholesterol and simultaneously blocks LDL (bad) cholesterol buildup
  • It has special fats that help you burn more fat, have more energy, and maintain healthy weight
  • It fights aging and keeps you looking and feeling young
  • It reduces fever and acts as an anti-inflammatory
  • It is antibacterial and thus wards off possible illnesses
  • It improves memory and cognitive functioning (even for people with Alzheimer’s)
  • It can boost testosterone for men and balance healthy hormones level for both men and women

Coconut oil is a healthy alternative to caffeine. Eating a small amount will give you a shot of energy without the side-effects.

24. Buy a juicer and juice a few times per week

Juicing is an incredible way to get loads of vitamins and nutrients from fruits and vegetables. These nutrients can:

  • Help protect against cardiovascular disease, cancer and various inflammatory diseases
  • Guard against oxidative cellular damage from everyday cellular maintenance and exposure to chemicals and pollution.

There are several approaches you can take to juicing. You can reset your body by doing a 3–10 day juice “cleanse.” Or, you could simply incorporate juice into your regular diet. I do both from time to time.

I always feel enormously better after juicing. Especially when I get lots of intense greens like kale into my system.

25. Choose to have faith in something bigger than yourself, skepticism is easy

In the timeless book, Think and Grow Rich, Napoleon Hill explains that a fundamental principle of wealth creation is having faith — which he defines as visualization and belief in the attainment of desire.

As he famously said, “Whatever the mind can conceive and believe, the mind can achieve.”

If you don’t believe in your dreams, the chances of them happening are slim to none. But if you can come to fully know the things you seek will occur, the universe will conspire to make it happen.

According to Hill (see page 49 of Think and Grow Rich), here’s how that works:

  • “Faith is the starting point of all accumulation of riches!”
  • “Faith is the basis of all ‘miracles’ and mysteries that cannot be analyzed by the rules of science!”
  • “Faith is the element that transforms the ordinary vibration of thought, created by the finite mind of man, into the spiritual equivalent.”
  • “Faith is the only agency through which the cosmic force of Infinite Intelligence can be harnessed and used.”
  • “Faith is the element, the ‘chemical’ which, when mixed with prayer, gives one direct communication with Infinite Intelligence.”

Like expressing love, in our culture, many have become uncomfortable with ideas like faith. Yet, to all of the best business minds in recent history, faith was fundamental to their success.

26. Stop obsessing about the outcome

Research has found that expectations in one’s own ability serves as a better predictor of high performance than expectations about a specific outcome. In his book, The Personal MBA, Josh Kaufman explains that when setting goals, your locus of control should target what you can control (i.e., your efforts) instead of results you can’t control (e.g., whether you get the part).

Expect optimal performance from yourself and let the chips fall where they may. The organic output will be your highest quality work.

“Put most simply: Do what is right, let the consequence follow.”

27. Give at least one guilt-free hour to relaxation per day

In our quest for success, many of us have become workaholics. However, relaxation is crucial for success. It is akin to resting between sets at the gym. Without resting, your workout will be far less than it could have been.

Foolishly, people approach their lives like a workout without rest breaks. Instead, they take stimulants to keep themselves going longer and longer. But this isn’t sustainable or healthy. It’s also bad for productivity and creativity in the short and long run.

28. Genuinely apologize to people you’ve mistreated

People make mistakes several times every single day. Sadly — and hilariously — much of the time we act like kids and blame our mistakes on external factors. Research has found that people who don’t openly and often apologize experiencehigher levels of stress and anxiety.

You don’t need that pent-up energy in your life. Make amends and let it go. It’s not your choice if people choose to forgive you.

29. Make friends with five people who inspire you

“You are the average of the five people you spend the most time with.” — Jim Rohn

Who you spend time with is incredibly important. Even more fundamental is: what types of people are you comfortable around?

Your comfort level is one of the clearest indicators of your character. Are the people you enjoy being around inspiring or degrading, hard-working or lazy?

What kinds of beliefs do you friends have?

What kinds of goals are they pursuing?

How much money do they make?

What does their health look like?

All of these things dramatically impact you. And it is one of the most painful experiences in the world to become uncomfortable around people who have long been your friends. When you grow and evolve and long for more, you’ll begin seeking a different crowd to surround yourself with.

Misery loves company. Don’t let them hold you back. Move on but never detach from the love you have for those people.

30. Save 10 percent or more of your income

“I would have saved 10 percent automatically from my paycheck by direct deposit into a savings account earning the best possible interest compounded daily. I would have also disciplined myself to deposit 10 percent of any additional money from gifts, refunds or other earned income. I would have bought a small house outright with the money I had saved (instead of renting an apartment for over 30 years). I would have found a job that I loved and devoted my life to it. At least you could be happy even if you were not where you wanted to be financially. Hope this helps someone out there.” — D. Lorinser

Tithing yourself is a core principle of wealth creation. Most people pay other people first. Most people live above their means.

In total, American consumers owe:

  • $11.85 trillion in debt
  • An increase of 1.4% from last year
  • $918.5 billion in credit card debt
  • $8.09 trillion in mortgages
  • $1.19 trillion in student loans
  • An increase of 5.9% from last year

The U.S. Census in 2010 reported that there were 234.56 million people over the age of 18 years old, suggesting the average adult owes $3,761 in revolving credit to lenders. Across the average household, American adults also owe $11,244 in student loans, $8,163 on their autos, and $70,322 on their mortgage.

Simply switching to home-brewed coffee will save you an average of $64.48 per month (or $2 per day) or $773.80 per year. By putting the savings into a mutual fund with average earnings of 6.5% interest and reinvesting the dividends into more mutual funds over a decade, the $64.48 saved every month would grow into $10,981.93.

31. Tithe or give 10 percent of your income away

“One gives freely, yet grows all the richer.” — Proverbs 11:24

Many of the wealthiest people in the world attribute their healthy financial life and abundance to giving some of it away.

Most people are trying to accumulate as much as they can. However, a natural principle of wealth creation is generosity. As Joe Polish has said, “The world gives to the givers and takes from the takers.”

From a spiritual perspective, everything we have is God’s (or the Earth’s). We are merely stewards over our possessions. When we die, we don’t take our money with us. So why hoard it?

As you give generously and wisely, you’ll be stunned by the increases in your earning potential. You’ll develop traits needed for radical wealth creation.

32. Drink 64–100 ounces of water per day

Human beings are mostly water. As we drink healthy amounts of water, we have smaller waistlines, healthier skin, and better functioning brains. Actually, as we drink enough water, it’s safe to say we’re better in every way.

It’s a no-brainer. If you’re not drinking the healthy amount of water each day, you should critically assess your priorities in life.

33. Buy a small place rather than rent

Unless you live in a big city (which many of you do), I’m baffled how many people pay outlandish amounts on rent each month.

When my wife and I moved to Clemson to begin graduate school, we did a lot of front end work to ensure we’d be able to buy a home. What’s shocking is that our mortgage payment is far less than most of our friend’s rent payments. By the end of our four years here in Clemson, we’ll have earned several thousand dollars in equity and even more in appreciation. Conversely, many of our friends are simply dumping hundreds of dollars into someone else’s pockets every month.

Paying rent is like working hourly. You get money while you’re on the clock. When you’re not on the clock, you get no money. Earning equity is like having residual income. Every month you pay down your mortgage, you actually keep that money. So you’re not “spending to live” like most people do. You’re living for free while saving — often earning in appreciation.

34. Check your email and social media at least 60–90 minutes after you wake up

Most people check their email and social media immediately upon waking up. This puts them in a reactive state for the remainder of the day. Instead of living life on their own terms, they’d rather respond to other people’s agendas.

Hence, the importance of having a solid morning routine. When you wake up and put yourself, not other people first, you position yourself to win before you ever begin playing.

“Private victory always precedes public victory.” –Stephen Covey

Make the first few hours of your morning about you, so that you can be the best you can for other people. My morning routine consists of prayer, journal writing, listening to audiobooks and podcasts while I workout, and taking a cold shower.

After I’ve had an epic morning, and I’m clear on the direction of my day, I can utilize email and social media for my benefit rather than detriment.

35. Make a few radical changes to your life each year

Reinvent yourself every year. Novelty is an antidote to monotony. Jump into new pursuits and relationships.

Try things you’ve never done before.

Take risks.

Have more fun.

Pursue big things you’ve been procrastinating for years.

In the past year, my wife and I went from having no kids to having three foster kids (ages 4, 6, and 8). I’ve started blogging. I quit my job and started writing full-time. I completely changed my diet. I’ve changed my entire daily routine.

Without question, this year has been the most transformative year of my life. It’s taught me that you can change your whole life in one year. I plan on changing my whole life for the better every year.

36. Define what wealth and happiness mean to you

“Be everything to everybody and you’ll be nothing for yourself.” — John Rushton

No two human beings are the same. So why should we have one standard of success? Seeking society’s standard of success is an endless rat-race. There will always be someone better than you. You’ll never have the time to doeverything.

Instead, you recognize that every decision has opportunity cost. When you choose one thing, you simultaneously don’t choose several others. And that’s okay. Actually, it’s beautiful because we get to choose our ultimate ideal. We must define success, wealth, and happiness in our own terms because if we don’t, society will for us — and we will always fall short. We’ll always be left wanting. We’ll always be stuck comparing ourselves and competing with other people. Our lives will be an endless race for the next best thing. We’ll never experience contentment.

37. “Change the way you feel, think, and act about money” — Steve Down

Most people have an unhealthy relationship with money. It’s not necessarily their fault; it’s what they were taught.

In order to change your financial world, you need to alter your paradigm and feelings about money.

Here are some key beliefs the most successful people in the world have:

  • In a free-market economy, anyone can make as much money as they want.
  • Your background, highest level of education, or IQ is irrelevant when it comes to earning money.
  • The bigger the problem you solve, the more money you make.
  • Expect to make lots of money. Think BIG: $100,000, $500,000, or why not $1 million?
  • What you focus on expands. If you believe in scarcity, you’ll have little.
  • If you believe there is unlimited abundance, you’ll attract abundance.
  • When you create incredible value for others, you have the right to make as much money as you want.
  • You’re not going to be discovered, saved, or made rich by someone else. If you want to be successful, you have to build it yourself.

When you develop a healthy relationship, you will have more. You won’t spend money on the crap most people waste their money on. You’ll focus more on value than price.

38. Invest only in industries you are informed about

Warren Buffett doesn’t invest in technology because he doesn’t understand it. Instead, he invests in banking and insurance. He’s not a tech guy. He invests in what he understands.

Yet, so many people invest in things they don’t understand. I’ve made that mistake. I once invested several thousand dollars in an overseas rice distribution. Although the investment sounded incredible on paper, it’s turned out to be a disaster.

I didn’t have the understanding to make an informed decision. I put my trust in someone else’s hands. And no one cares about your success more than you do.

From now on, I’m going to responsibly invest in things I can make informed decisions on.

39. Create an automated income source that takes care of the fundamentals

We live in unprecedented times. It has never been easier to create automated income streams. No matter your skill-set and interests, you can put a business in place that runs 24/7 even while you’re sleeping, sitting on the beach, or playing with your kids.

An entrepreneur is someone who works for a few years like no one will so they can live the rest of their life like no one else can.

If you want to free up your time and energy for the things that matter most, either invest in stuff you’re informed on (e.g., real estate, businesses, mutual funds), or, create a business that doesn’t require you (e.g., create an online educational course about something you’re passionate about).

40. Have multiple income streams (the more the better)

Most people’s income comes from the same source. However, most wealthy people’s income comes from multiple sources. I know people with hundreds of income streams coming in each month.

What would happen if you set things up so you were getting income from 5 or 10 different places each month?

What if several of those were automated?

Again, with a few short years of intentional and focused work, you can have several income streams.

41. Track at least one habit/behavior you’re trying to improve

“When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates.” — Thomas Monson

Tracking is difficult. If you’ve tried it before, chances are, you quit within a few days.

Research has repeatedly found that when behavior is tracked and evaluated, it improves drastically.

It’s best to track only a few things. Maybe just one at a time.

If you want to track your diet, a fun approach is taking a picture of everything you eat. Everything. This allows you the time to determine if you really want to put that in your body.

So, your tracking can be creative. Do what works for you. Use a method you will actually do.

But start tracking. After you’ve made solid improvement on your desired area and formed new habits, start tracking something else.

42. Have no more than 3 items on your to-do list each day

When you shift your life from day-to-day reactivity to one of creation and purpose, your goals become a lot bigger. Consequently, your priority list becomes smaller. Instead of doing a million things poorly, the goal becomes to do a few things incredibly — or better yet, to do one thing better than anyone else in the world.

“If you have more than three priorities, then you don’t have any.” — Jim Collins

So, instead of trying to do a million small things, what one or two things would make the biggest impact?

Dan Sullivan, founder of Strategic Coach, explains that there are two economies: The Economy of Hard Work and The Economy of Results.

Some people think hard work is the recipe. Others think about the most efficient way to get a desired result.

Tim Ferriss, in his book, The 4-Hour Body, explains what he calls Minimum Effective Dose (MED), which is simply the smallest dose that will yield a desired result and anything past the MED is wasteful. Water boils at 100°C at standard air pressure — it is not “more boiled” if you add more heat.

What is the fastest way to get your desired outcome?

43. Make your bed first thing in the morning

According to psychological research, people who make their bed in the morning are happier and more successful than those who don’t. If that’s not enough, here’s more:

  • 71 percent of bed makers consider themselves happy
  • While 62 percent of non-bed-makers are unhappy
  • Bed makers are also more likely to like their jobs, own a home, exercise regularly, and feel well rested
  • Whereas non-bed-makers hate their jobs, rent apartments, avoid the gym, and wake up tired.

Crazy, right?

Something so simple. Yet, when you make your bed first thing in the morning, you knock-off your first accomplishment of the day. This puts you in a mindset of “winning.”

Do it! It only takes 30 seconds.

44. Make one audacious request per week (what do you have to lose?)

“Rainmakers generate revenue by making asks. They ask for donations. They ask for contracts. They ask for deals. They ask for opportunities. They ask to meet with leaders or speak to them over the phone. They ask for publicity. They come up with ideas and ask for a few minutes of your time to pitch it. They ask for help. Don’t let rainmaking deter you from your dream. It’s one of the barriers to entry, and you can overcome it. Once you taste the sweet victory of a positive response, you’ll not only become comfortable with it, you might even enjoy it. But making asks is the only way to bring your dream to life.” — Ben Arment

I got into graduate school way after applications were due because I asked.

I’ve gotten free NBA tickets by asking a few players I saw at a hotel.

I’ve gotten my work published on high tier outlets because I ask.

Very few things in life are just randomly given to you as an adult. In most cases, you need to earn it and/or ask for it.

Yet, there are many opportunities currently available to everyone if they would muster the courage and humility to ask.

The entire crowdfunding industry is based on making asks.

Start making bold and audacious asks. What’s the worst that could happen? They say “No”?

What’s the best that could happen?

When you don’t ask, you lose by default. And you’ll never know the opportunities you missed out on.

Don’t sell yourself short. Ask that beautiful girl on a date. Ask for that raise or big opportunity at work. Ask people to invest in your idea.

Put yourself out there. You’ll be blown away by what happens.

45. Be spontaneously generous with a stranger at least once per month

Life isn’t all about what you can achieve or acquire. It’s more about who you become and what you contribute.

Interestingly, research done at Yale has found that people are instinctively cooperative and generous. However, if you stall and think about being helpful or generous, you’re less likely to do it. And the longer you wait, the likelihood of you being helpful diminishes.

So, be spontaneous. When you get the wild thought of buying the person’s food in the car behind you, just do it. Don’t think about it.

If you’re driving down the road and see someone with car trouble off to the side, just do it. Don’t think about it.

When you want to say “I love you,” to a loved one, just do it. Don’t think about it.

Paralysis by analysis is dumb. And Malcolm Gladwell explains in Blink that snap-decisions are often far better than well-thought out ones.

46. Write and place a short, thoughtful note for someone once per day

The messages of handwritten letters impact deeper and are remembered longer than electronic messages. There is no comparison to this traditional form of conversation. Handwritten messages are so powerful that people often keep these notes for a long time. Sometimes a lifetime.

Jack Canfield has taught that writing 3–5 handwritten notes per day will change your relationships. In our email world, it can seem inefficient to hand-write and mail a letter. But relationships aren’t about efficiency.

Not only will handwriting letters change your relationships, it will change you.Research has shown that writing by hand increases brain development and cognition more than typing can.

Consequently, the things you write will be seared into your own memory as well, allowing both you and the recipient to reflect back on cherished moments.

Writing handwritten notes spices up your relationships, adding an element of fun. It’s exciting placing kind and loving notes in random places for your loved ones to find. Put a note under the windshield wipers of your loved one’s car to find after a hard day’s’ work. Hidden, wait til they come out and watch them from across the street. You’ll see their eyes light up and smile spread.

Other fun places include:

  • In the fridge
  • In the closet
  • On the computer keyboard
  • In their shoe
  • In their wallet
  • The mail box

Anywhere that makes the experience a surprise…

47. Become good friends with your parents

Many people have horrible relationships with their parents. I once did myself. Growing up can be tough and sometimes our parents make horrible decisions that negatively impact us.

However, my parents have become my best friends. They are my confidants. I turn to them for wisdom and advice. They understand me like no one else. Biology is a powerful thing.

Although I don’t see things the same way my parents do, I love them and respect their viewpoints. I love working out with my dad and talking about big ideas with my mom.

I couldn’t imagine not being close to them.

If your parents are still around, rekindle those ties or increase the flame. You’ll find enormous joy in those relationships.

48. Floss your teeth

About 50 percent of Americans claim to floss daily. My guess is that’s a large over-estimate. Either way, the benefits of flossing are incredible.

Doing so daily prevents gum disease and tooth loss. Everyone gets plaque, and it can only be removed by flossing or a deep cleaning from your dentist. Plaque buildup can lead to cavities, tooth decay, and gum disease. If left untreated, gum disease can be a risk factor for heart disease, diabetes, and a high body mass index.

Yes, not flossing can make you fat.

Not only that, but it greatly reduces bad breath.

49. Eat at least one meal with your family per day

If possible, eat a sit-down meal with your loved ones daily. It doesn’t matter if it’s breakfast, lunch, or dinner.

We’ve become so high-paced in the world that everything we do is on the go. We’ve forgotten what it means to just be with our loved ones.

Eating together creates a sense of community like nothing else.

Teens who have fewer than three family dinners a week are 3.5 times more likely to have abused prescription drugs and to have used illegal drugs other than marijuana, three times more likely to have used marijuana, more than 2.5 times more likely to have smoked cigarettes, and 1.5 times more likely to have tried alcohol, according to the CASA report.

50. Spend time reflecting on your blessings at least once per day

Gratitude is the cure-all for all the world’s problems. It has been called, “the mother of all virtues,” by the Roman philosopher Cicero.

When you practice gratitude, your world changes. There is no objective reality. All people perceive reality as they selectively attend to things that are meaningful to them. Hence, some people notice the good while others notice the bad.

Gratitude is having an abundance mindset. When you think abundantly, the world is your oyster. There is limitless opportunity and possibility for you.

People are magnets. When you’re grateful for what you have, you will attract more of the positive and good. Gratitude is contagious. It changes not only your world, but everyone else’s you come in contact with.

Article source: https://medium.com/life-learning/50-ways-happier-healthier-and-more-successful-people-live-on-their-own-terms-30280c7d5e44#.915wklrif

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WHAT IS LENDERS MORTGAGE INSURANCE (LMI)?

Lenders Mortgage Insurance (LMI) protects the lender in the event that you default on your loan. It is paid as a once-off insurance premium or fee when your loan is advanced. It does not affect your interest rate.
LMI is only applicable if your loan poses a relatively high risk to the lender—usually because you are borrowing a high percentage of the property value.

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WHAT IS CREDIT SCORING?

Whenever you apply for credit—whether it’s a home loan or a mobile phone contract—your application is given a credit score. The score represents your risk of non-payment to the lender credit, and it is usually assessed by a computer.

Credit scores are influenced by a wide range of factors which don’t always reflect your true credit worthiness. A mortgage consultant may be able to help with credit scoring issues.

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WHAT ARE GENUINE SAVINGS?

What is considered “Genuine Savings” and why do most banks require it even if you have a good income?

In response to the increase in first home buyers applying with no deposit or savings, most Australian lenders now require mandatory genuine savings for most home loans.
We work with several lenders that don’t require genuine savings, but most do, and most work somewhere within these guidelines.

  • 80% of property value: Genuine savings not required.
  • 85% of property value: Genuine savings not required by most lenders.
  • 90% of property value: Genuine savings required by most lenders
  • 95% of property value: Genuine savings required by almost all lenders
  • 100% of the property value: Guarantor loans required for buyers without genuine savings.

To learn more, please enquire online or call us on 0476 111 000 to speak with one of our specialist mortgage consultants.

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TOP AUCTION TECHNIQUES

Buying a home at auction can cut your purchase price dramatically. But many beginners fail to realize how these auctions work. To maximize your chance of success, you need to understand the auction process.

The Auction Process

Always do your research before the auction. Know what the house is worth in good condition, know what it needs, and figure out your budget before you start. Above all, do not get swept up in the excitement of the moment. Keep a cool head and stick to your plan.

Pest and building inspections should always be carried out before the auction. The inspection will expose any structural issues or other problems that will affect the value of the house. Surprises are common after a property auction. Avoid them with an inspection.

If you’re the high bidder, you’ll need to put down a deposit immediately after the auction. Unless you’ve negotiated otherwise, this is typically 10 percent of the purchase price. You can eliminate any problems during this phase by getting pre-approved for a mortgage. (A mortgage consultant can help you with the pre-approval process.) Also remember to bring a picture ID and register with the auction when you arrive.

Once they begin, property auctions move quickly. They can be intimidating. Consider legally appointing someone to bid for you if you’re not comfortable with the pressure and bidding practices.

Key Tips for Buying At Auction

Auctions can be overwhelming for first-time buyers, but these tips can improve your chance of success:
• Study the market values in the area surrounding the property. Knowing current prices in the neighbourhood could keep you from overpaying, or it could reveal a hidden gem.
• Stay calm and stick to a pre-agreed bidding limit. You’ll avoid bidding too high, and you’ll appear calm and confident before other bidders.
• Attend a few auctions before you bid on a property. Familiarise yourself with the atmosphere and process so you’re comfortable when it comes time to bid.
• Enlist the support of your family and friends on auction day to keep you calm and focussed.
• Even if you don’t win your property, stay positive – there are plenty more opportunities out there.
• Talk to a mortgage consultant beforehand. They know a lot about home valuations and the buying process.

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