Newsletter

The official cash rate has been at an all-time low for some time now and forecasters are undecided about where the RBA will take it next. It seems likely that the RBA will wait to see if our economy continues to improve and for global economic developments before making any further changes, which could mean the official cash rate stays on hold for quite some time.

Meanwhile, lenders have adopted the policy of adjusting their interest rates outside of RBA movements in order to factor in local conditions and their actual costs. For example, since December there have been minor adjustments to some owner-occupier variable interest rate products and some lenders have increased rates slightly on some of their fixed rate loan options. So far, these adjustments have only been minor, but do get in touch if you need us to check your rate.

Auction activity has been surprising for this time of year, when property buyers are usually more interested in going to the beach than open house inspections. For the week ending February 5, Victoria had 321 auctions with a clearance rate of 75%, NSW 427 auctions with a clearance rate of 74%, QLD 294 auctions with a clearance rate of 46%, SA 156 auctions and a clearance rate of 62%, WA 54 auctions with a clearance rate of 21%, NT 4 auctions with a clearance rate of 100%, ACT 69 auctions with a clearance rate of 75% and there were 11 auctions in Tasmania with a clearance rate just under 50%.

Home owners and property investors will be pleased to note that the trend for rising home values looks set to continue into 2017. For the month ending January 31 most markets showed an increase and although these were mostly less than 1%, the fact they rose during the quietest time of year bodes well. Hobart was the exception, showing an increase for the month of 1.44%. The only market that showed a decline was Darwin, where home values fell by 1.72%.

A recent news article* revealed that a significant proportion of Australians do not know how much interest they are paying on their home loan! If you need an update or would like us to check your interest rate and home loan features to see if it is still the most suitable product for you, then please give us a call.

We’re excited about the year ahead, so if you’re considering purchasing a property this year, expanding your investment portfolio, or refinancing to a different loan product, just get in touch. We’ll be happy to help you get on the path to success.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. *Information Sources: www.realestate.com.au/news & www.realestate.com.au/auction-results & www.corelogic.com.au/research/monthly-indices.html

The experience can be exhilarating and exciting, but it can also be frustrating and disappointing if you miss out on your dream property after months of looking for the right one. That’s why it’s a great idea to organise your finance through trusted mortgage and finance brokers like us, prior to the auction. And if you’re still on your auction L-Plates, fret not. Here are 3 tried-and-true auction strategies that really work.

1) Adhere to the Scout Motto: Be Prepared!

Before you begin bidding, it’s important that you do your homework. If you’re a first home buyer or new to the auction scene, visit plenty of auctions and familiarise yourself with the process. That way, when you go to bid on your dream home, you’ll feel confident and ready. Above all, research your market and the property you wish to purchase thoroughly.

It’s crucial to have a solid understanding of your financial position and budget before the auction. Talk to us and we’ll help you work out your maximum borrowing capacity, help ensure your deposit is ready and arrange pre-approval through your lender of choice. Having this document on hand, which verifies how much a lender is willing to lend you, will give real estate agents and vendors confidence that you’re a serious buyer.

Lastly, when you decide the property you’ve chosen is the right one for you, it’s important to perform your due diligence. Undertake all building and pest inspections before the auction. Have your solicitor review the contract and make amendments, such as a longer settlement period, if needed.

2) Ooze confidence

An auction is like a game of poker – each player has different cards to play, but they’re all in it to win. In order to be successful, you need a strategy and you need to act it out with conviction. Devise a plan beforehand and stick to it.

When you begin bidding at the auction, you must radiate confidence so you don’t get elbowed aside by the other bidders. The competition will be looking for any sign of weakness, and you must not show your nerves. Even if you’re trembling like a jellyfish inside, it’s all about smoke and mirrors. Be aware of your body language. Position yourself at the centre of the bidders, stand tall, and make decisive movements.

3) Be brave, be bold

When the bidding begins, your best bet at scaring off the competition is to hit back with assertive bids. Come in with a solid early bid if possible. Your competition may be taken by surprise and lose their nerve.

You need to give the impression that your wallet is bottomless, while still making bids within the scope of your buying capacity. After every bid, come back immediately with your counter-bid. Do not hesitate. Remain in control, even if your heart is in your mouth, and with a bit of luck you will blow the competition out of the water.

Mistakes to avoid

Experts recommend against waiting until the very end of the auction to bid. Go in strong from the beginning instead, even if that means making the first bid. Don’t rely on your own instincts throughout the auction process, but rather, carefully consider any advice the agent has provided, particularly relating to the reserve price. Avoid asking whether the property is “on the market yet” in the middle of an auction, as this may irritate the vendor and discourage them from negotiating with you if the property is passed in at auction. And remember, if it all seems too daunting, you can nominate a phone bidder to bid on your behalf.

Being confident and relaxed is an important part of being successful at an auction. It really helps to be sure of your financial position and your budget before you raise your hand for your first auction bid, and that’s where we can help. As your trusted mortgage and finance broker, we can help you determine your buying capacity and the kind of home loan products that may be right for you, make sure your deposit is ready to go and arrange pre-approval with your lender of choice. Please get in touch today.

However, it can also be daunting, with so many elements at play and your life savings on the line. Now more than ever, borrowers are relying on the professional expertise of mortgage and finance brokers to help them navigate through the home loan application and settlement process.

A recent survey by Deloitte of more than 1000 Aussies who took out a home loan in the past two years found customers who used mortgage brokers were more satisfied with their experience than direct-to-lender customers. In fact, some 32% of broker customers rated their experience of using a broker a 9 or 10 out of 10 (with 10 being ‘exceeding expectations’), compared to only 20% of direct-to-lender customers giving such a ranking.

More than 53% of all home loans are now being originated by brokers and this figure is on the rise. It’s clear that using the services of a mortgage and finance professional is increasing in popularity amongst consumers. But why? What are the benefits of using a mortgage broker?

It’s that personal touch

The number one reason why you should use a mortgage broker is because we have your best interests at heart and will help you find the right product for you. A lender, on the other hand, is only interested in selling their own products and does not know whether there might be better options for you with a different provider. As your mortgage broker, we can offer you invaluable support and be with you each step of the way, from pre-approval right through to settlement and beyond.

We save you time and money

Finding the right home loan to suit your personal needs, financial circumstances and goals can potentially save you thousands of dollars in the long-run. Only a mortgage broker will take the time to research which home loan products will marry up best with your objectives. Deciding what types of features you would like attached to your home loan can be tricky, and you don’t want to end up paying for add-ons you don’t need. Whether you require a mortgage with all the bells and whistles, like redraw facilities and offset accounts, or something straightforward, a broker will structure your loan accordingly. Moreover, we keep abreast of the latest deals, and know the merits and requirements of each individual lender, so that you can feel confident about the suitability of the home loan you are using.

We do all the grunt work

Mortgage brokers undertake the tedious process of comparing hundreds of home loans on your behalf, taking on one of the most unpleasant tasks in the home loan process. Loan product comparisons can be very confusing to the average home buyer and loan comparison websites don’t explain the features and benefits of a loan and how you can use them to your advantage.

Because we already understand the intricacies of all of the products on offer, we take away the complexity and simplify the application process. That means you can spend your time focusing on the fun stuff, like choosing your dream home! We offer expert advice about all aspects of purchasing your home or investment property and can tailor a home loan to your exact needs and financial aspirations.

You don’t know what you don’t know

There may be much more you can do with your money than you imagine. Nowadays, many mortgage brokers have diversified their offerings to include more than just home loans. Mortgage brokers are experts about credit and finance and can help you be smart about your financial decisions. We can provide expert advice about your borrowing capacity, how to use property to build your wealth in the long-run, and how to make the most of your income and assets. You’ll find our support invaluable, whether you need advice about finance for a renovation, building wealth through property in your self-managed super fund, consolidating debt, accessing a commercial property loan and more.

The icing on the cake is that we don’t charge anything for our services – the lenders pay us a commission. The commission amount is about the same across all lenders and home loan products, so you can rest assured we are not biased towards one provider. To find out more about how we can help you, or to chat with us about your finance and home loan options, please call us today.

Information sources: Hickey, J and Wilson, J. (2016). Customer Experiences of Using Mortgage Brokers. Deloitte, prepared for the MFAA. [online], p. 5. Available at: https://www2.deloitte.com/content/dam/Deloitte/au/Documents/financial-services/deloitte-au-fs-home-loan-preferences-041116.pdf 2 According to the Mortgage & Finance Association of Australia, the market share of residential home loans originated by brokers and aggregators as a percentage of Australian Bureau of Statistics Housing Finance Commitments was 53.6% during the September 2016 quarter, based on data sourced from 19 leading broker groups and aggregators.

As your mortgage and finance broker, we love to pass on juicy tips that ultimately help you to use your property investment dollars wisely. So, how do you spot that diamond in the rough that will become your renovation goldmine? Well, it takes a good deal of detective work, a resourceful imagination and some logical reasoning when it comes to renovation spending. Right, time to channel Sherlock, folks!

Step 1: Narrow down your leads

Finding the right location is paramount for any property purchase. The aim is to target run-down properties in suburbs with solid growth potential. Ultimately, the property should be close to amenities such as schools, shops and public transport, but not so close to the train line that the front door rattles all night long!

If you’re buying for investment purposes, always remember your end-goal, which is to sell post-renovation. Research what’s in high demand in areas you’re interested in, as well as the value of renovated properties in the suburb. Searching for phrases like “renovator’s dream” and “deceased estates” in real estate advertisements will narrow down your options.

Step 2: Follow the clues and do your detective work

When you find a potential fixer-upper, you need to quickly develop a keen eye for detail. Research the neighbourhood thoroughly and investigate any external issues that could affect your investment. Is the area flood-prone? Is there a high crime rate that could impact upon liveability? Is there noise pollution? Lastly, consider any legal or heritage restrictions that could put a dampener on your renovation goals.

Once you have ruled out potential external glitches, it’s time to concentrate on the finer details and test out your powers of observation. Is the structure sound and are the roof, walls, doors and windows in good condition? Are the foundations strong? Are there any issues with the electrics and plumbing of the property? The last thing you want is to be paying through the roof for non-cosmetic upgrades. It’s a good idea to invest in a pre-purchase building inspection and study it with your trusty magnifying glass.

Step 3: Consider different scenarios and mastermind your makeover

Warning: this may require a good deal of imagination! Being able to overlook retro linoleum floors and garish wallpaper can be tricky, but keep in mind the golden rule of renovation: minimal effort, maximum returns. Cosmetic enhancements that will drive up the value of the property are what you want. Flaky paint, scruffy carpets, old cupboards and dated bathroom fixtures can all be upgraded with minimal effort and cost. Many experts recommend seeking out properties with older bathrooms and kitchens that can easily be renovated.

Also, it’s a good idea to consider the layout and convertibility of the property. Can you add value by playing with the dimensions? Can you knock down walls to create a more open-plan living space, or add walls to create new rooms? Can a puny window be transformed into a spectacular natural light portal? How could you revamp the garden?

A good sleuth knows when to trust their instincts, and if your gut is telling you you’ve found your fixer-upper, it’s time to speak to a reputable mortgage and finance broker like us about how to finance your property purchase and renovations.

Step 3: Close the case

Our final tip is to make sure you stay within budget once you’ve found your renovator’s dream. Don’t overspend on improvements, but don’t skimp on quality either. Spend time and money on renovations that will give you the best return on investment and make the property stand out to prospective buyers.

We hope you’ve found these tips for spotting a good fixer-upper handy. We can provide expert advice about obtaining finance for your property investments and renovations. We’ll analyse the thousands of home loan products out there and test them under our microscope to ensure they measure up. Please get in touch with our team today.