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Question to Ask before Appointing a Broker

question-to-ask-before-appointing-a-brokerIt’s anything but difficult to get confounded when each land, home loan and cash “master” gives their two pennies’ worth on a subject. In any case, while picking a home loan agent and a home credit through a specialist, you ought to dependably ask a couple key inquiries so you can settle on an educated choice. Here are our main five.

It is safe to say that you are an authorized home loan representative?

The most vital thing you ought to discover, before you ask whatever else, is whether the intermediary is completely authorized to hone as a home loan representative. You can solicit to see confirmation from their permit if it’s not showed noticeably in their office or on their site.

What is your fee structure?

Even if you’ve used a mortgage broker in the past, it’s wise to ask about your new broker’s fee structure, which might not be the same for every broker.

As the government’s MoneySmart website points out, most (though not all) brokers earn money on commissions paid by the lender. If one particular lender offers the broker more generous commissions than any other lender on their books, the broker may be more inclined to push you towards that particular lender.

Also, some lenders charge borrowers a fee for their services, and others rely solely on their commissions from lenders. Be sure to find out exactly how the broker is paid before you use their services so you know exactly how they are earning their money and what that could mean for you.

Why should I use you as a broker instead of going to the lender directly?

It probably goes without saying, but a broker who can’t answer this question is not worth your time – let alone your business.

The Mortgage & Finance Association of Australia (MFAA) gives a clear breakdown of the role of a broker. Fundamentally, the broker’s job is to save you a lot of time and hassle in identifying which loans you are suitable for and then arrange the setup of the loan you decide on. A good broker will be able to tell you straightaway about the service they provide and even give you examples of when their involvement made a real difference to a borrower.

You can even ask to see testimonials from previous customers as evidence of the broker’s skill and professionalism.

Which lenders do you have access to?

There is a large number of lenders operating in Australia. These range from the big four Australian banks to foreign and international banks with local operations, as well as smaller regional banks, lenders and credit unions.

A good broker will have access to loans from a range of lenders, big and small, which gives them more scope to find the very best loan package for your circumstances. They will also have familiarity in dealing with most, if not of all, of these lenders. As such, they will have an understanding of the little nuances in each lender’s method of determining new loan applications, as well as of the time each lender typically takes to approve a loan.

How do you determine which loan(s) to recommend to me?

Asking this question is a test of the broker and how they work. They should be able to clearly outline how they source loan products from lenders and what process they use to funnel through these options to find the right loan or loans to offer you based on your particular circumstances. They should also know off the top of their heads the types of information you need to provide to secure a loan.

First Home Buyers Common Mistakes

first-home-buyers-common-mistakesWhether it’s another loft or an old one – or even a house in the external rural areas – finding a moderate home isn’t simple for anybody beginning. What’s more, in all the energy of going house chasing, it’s very simple to commit errors. The accompanying are seven of the most well-known errors first-home purchasers make.

# Not getting pre-approval

Just knowing you qualify for a home loan is not enough. Before you start looking at properties, go to lenders and find out how much they are willing to lend you. This will help you focus your attention on houses you can afford, so you can avoid the disappointment of finding your dream home and then learning you can’t have it.

# Not understanding your mortgage options

Getting a home loan is much easier today than it was in the past, when you had to save for years for your deposit money. It may be easier, but it’s also riskier and can be more expensive. A no-deposit home loan comes with the added cost of mortgage insurance. Would you be better off making a deposit and saving on the ongoing cost of mortgage insurance? Get advice from a variety of lenders and discuss all your options with them.

# Borrowing too much

Many first-home buyers make the sometimes fatal mistake of borrowing to their limit. This can stretch your finances to the limit and will not allow you to make improvements to your property when you move in; worse still, you might not be able to afford to enjoy life in your new home. If you face unforeseen financial problems, it could mean having to sell your house before you have substantial equity in it.

# Not being proactive

Too many first-home buyers rely solely on the expertise of their local real estate agencies. You should take a proactive approach and do independent research. You can easily find auction results in your local paper and online. Narrow your searches down to the suburbs and even streets where you want to buy and you can find out what properties are selling for. When a vendor’s agent, who will always be acting on their client’s behalf, gives you a price, you will be in a position to make a realistic counter-offer. If you buy at auction, you will avoid paying too much.

# Not getting a pre-purchase inspection report

Some of the best real estate deals are older homes that need minor or cosmetic repairs and renovations. Some of the worst deals are older homes that need costly major repairs. Those major repair jobs are usually hidden from view. Saving a few dollars by not getting a pre-purchase inspection report from an independent building inspector can cost you thousands of dollars after you move into your home. To be on the safe side, have a pest inspection carried out as well.

# Underestimating additional costs

When you buy a home, you pay more than just the cost of the house. Some of the additional costs include:

  • home insurance
  • moving costs
  • inspection reports
  • stamp duty
  • council rates
  • transfer fees.

Underestimating or not estimating these and other costs is a fatal mistake many first-home buyers make. Know your costs and budget ahead of time and you won’t be losing sleep when you move into your new home.

# Getting too emotional

Buying your first home is an emotional experience, so it’s too easy to let your emotions blind you. Take your cue from professional home renovators, who think of only one thing when they buy a house: “What will my ROI be?” If a professional doesn’t think a house offers a good return on their investment, they walk away. So should you.

Applying Home Loan Tips

applying-home-loan# Plan ahead

In case you’re battling with different advances or charge cards, banks are probably going to either apply less positive home loan terms, or maintain a strategic distance from your credit application inside and out. So before you begin credit chasing, ensure your monetary house is all together. Try not to keep away from charge card installments for a greater house store – that intrigue can be up to five times higher, and missed installments will mean something negative for you on your application.

It’s additionally sensible to combine your credit and store records to a solitary card. For each dollar in credit you have accessible (regardless of the possibility that you don’t really owe that cash) through cards, moneylenders will lessen their offer by up to five dollars.

# Research first and be conservative

Every time you apply for credit, that fact is noted on your individual credit report, so aim to make your first application your only one. That means first understanding your financial situation – how good (or bad) a lending risk you will appear to be on paper – and then finding the best loan for that analysis.

# Provide everything

A home loan application can stretch to 10 pages and more. While a lot of it will look like rudimentary box-ticking, all of the information provided is considered.

Don’t leave things out or try to gloss over things that might look bad on paper – banks and lenders will find them out regardless. This applies in particular to all credit and store cards – many an application has been turned down because of an undeclared store card, even when the card was long forgotten and not in arrears.

At the same time, make sure all the positive and neutral stories in your credit history are also included – they give lenders greater reason to work with you. This could include long-since paid-off car and personal loans, as well as any evidence of sustained savings.

Also, remember to have all of your identification documentation and employment evidence ready. You’ll need the standard 100 points of identification that you’d need to open a bank account, as well as at least your two most recent pay slips to prove your income. A letter from your employer highlighting both income and length of employment is also useful. For self-employed borrowers, things are a little more onerous. Expect to be asked for copies of your past two tax returns and contact details of your accountant. Some lenders will ask for formal certified profit–loss statements.

# Follow up

If things go wrong and the loan is not approved, be sure to follow up with the lender and the credit reporting body they have used. Being denied home finance once will impact on future applications, so it becomes even more important to have all the facts when applying for the next best opportunity.

Banks and mortgage providers are lending you hundreds of thousands of dollars for your home – they’re not going to do that without some extensive research into your ability to repay that debt under the agreed terms. There is no point trying to fight the systems they’ve set up and trust, but you can use that process to present yourself as honest, knowledgeable and passionate about the investment you’re making.

Know the Checklist for Home Buyers

There is a considerable measure to consider when searching for a property to purchase, and when you have found the one, making the genuine buy can be loaded down with inconveniences. Streamlining your land pursuit and utilizing every accessible apparatus is the most ideal approach to begin. From here, setting up your obtaining power with potential banks will have you prepared to purchase. Once in the market, ensure your home reviews are productive by realizing what to pay special mind to. Try not to think little of the significance of good legitimate exhortation: this can alarm you to property title issues, illicit building increases and whether an agreement of offer secures your interests. At last, to guarantee your fantasy property doesn’t fall through your fingers finally, acclimate yourself with the trading of agreement and settlement forms.

  • What is your ideal property and area? Identify your suburb wishlist and key property requirements.
  • Know the differences between buying a house or unit. Think council rates, strata management fees, insurance and other important homeowner considerations.
  • Consider professional property buyer services. Consult real estate agents, conveyancers and financial advisors.
  • Do a financial health check. Know your buying limits and be realistic about upfront and ongoing homeowner costs.
  • Become a property inspection expert. Rising damp, buckling walls and pest infestations – avoid property nightmares.
  • Know how to seal the property deal. Whether you buy at auction or by private treaty you need to understand your contractual rights and obligations.

Home Insurance Costs of Houses and Unit

Houses tend to attract higher insurance premiums than units or townhouses due to their size and security requirements. That said, if you’re buying into a complex, you will need to pay strata insurance, which protects the building’s common areas, in addition to home and contents insurance.

Strategies to minimize home and contents insurance costs include:

  • Bundling policies such as car, life, health, pet and travel insurance with home and contents insurance
  • Increasing your excess to save money each month that you don’t claim
  • Protecting your no-claim status, which can save up to 65 per cent on premiums
  • Paying annually if you have the cash flow, to reduce the premium

By shopping around for a policy that best suits your needs and ensuring you don’t pay for unnecessary extras, you can cut home insurance costs from the outset. Make sure you talk to your chosen insurer about steps you can take to reduce risk and safety hazards around your home, and update the insurance company about any changes to your home and contents that may affect your premiums.

Find Property You Want, Here Its Tips

# Choosing a suburb and property

Embarking on your property journey without clear parameters is like sailing in a ship without anyone at the helm. Make a suburban checklist that will form the basis of your search and help you decide which areas to target. Consider the following features in choosing your suburbs:

  • Proximity to your work, social network and family
  • Access to amenities such as shops, schools, medical services and transport
  • Access to your favourite leisure spots including parks, beaches, cultural centres, cafés and other entertainment areas
  • Future developments and potential infrastructure changes or rezoning.

Research property prices to find out where you can afford to buy. Use industry data to assess an area’s median prices, by suburb, postcode, street or property type. Having an idea of your property requirements will also be a big help. This includes:

  • Property type – house, unit, studio or townhouse
  • Property style – off-the-plan, new, specific architectural period (e.g. Federation, Art Deco, Mid-Century or industrial) or fixer-upper
  • Number of bedrooms, bathrooms and parking spots

When an area was developed or experienced a resurgence in development, and its history of use – such as rural, industrial or residential – will determine the types of properties available.

# Real estate search tools

A range of advanced property tools is now available to help you in your search, including mobile, online and print property listings and buying guides. You can also enlist the help of buyer agents, real estate agents and mortgage brokers.

— Mobile apps

The very nature of hunting for property means getting out on the road. By downloading a property app, your resources will always be on hand. Domain’s award-winning app provides tailored search functions, interactive maps, property photo galleries, agent details, inspection and auction times, and directions.

— Online

The convenience of jumping online at any time of the day or night to review the latest property listings is invaluable. Tailor your searches, save search results, shortlist properties, and access thelatest market data based upon city, suburb, postcode or street.

— Print

By reviewing printed listings and guides you can obtain an instant overview of a particular market and gain greater insight into featured properties. Domain prints listings in over 200 metropolitan, regional and community newspapers.

— Real estate agents

Along with perusing the local real estate agents’ windows, it is helpful to register your interest with a number of agents located in your target areas. They can search for properties on your behalf that fit your criteria, with the added benefit of being up on new properties coming onto the market.

Purchase a Rural Property

Whether you need to work the land or simply appreciate life in nature, purchasing provincial property can be an extraordinary venture. It is not without pitfalls, however. Indeed, even master property speculators commit errors with their first country property venture, correctly in light of the fact that they are uninformed of the special dangers of obtaining a property in a provincial range.

Know the risks

If you’re aware of the hidden risks of rural properties, you can avoid them. These can be things that wouldn’t even cross your mind when considering suburban or inner-city properties, but can make all the difference when looking at a rural property. For example:

  • Chemical contamination of land and/or water can be a problem in some areas.
  • Livestock diseases may be present in an area.
  • Plant diseases and pests may be an issue.
  • Land usage rights can affect what you can use your property for or what outside parties can do on your property.
  • You may be required by law to control noxious weeds, animals and/or insects.
  • Drought may make water sources dry up or create severe bushfire danger.

Uncovering potential pitfalls like these can be challenging because vendors may not be required by law to disclose them. You can, however, find out what you need to know by contacting the Department of Primary Industries (DPI) or its equivalent in your state. The New South Wales DPI, for instance, provides free information about rural areas throughout New South Wales.

Rewards of buying rural properties

If you have assessed the risks and choose to proceed, you can reap huge rewards from buying a rural property. Imagine having a holiday home on 300 lush acres of rural land for less than the price of an inner-city terrace.

If you prefer to build your own home, you can find large acreages with stunning hilltop views for well under $200,000. Look for a property that’s not too far from a city centre and has a good access road.

Interstate Investors Tips

Venture interstate may appear to some like a major bet; it is a tiny bit terrifying not being acquainted with, or near, the region your well deserved speculation dollars are going to. The flipside, obviously, is that you may likewise be passing up a great opportunity for profitable open doors by constraining your venture near and dear. Things being what they are, what are a portion of the potential pitfalls in contributing interstate? What’s more, would you say you are passing up a great opportunity by staying home?

# Become more acquainted with the market

What are the long haul anticipates the zone? Is the populace developing? Is the economy stable? Is there a scope of ventures and demographics in the locale? Who are your objective inhabitants? A touch of research ought to have the capacity to answer these inquiries for you; Domain’s property aides and market results are incredible spots to begin.

# Be aware of hidden costs

You bought a lovely investment property right by a river, then the wet season arrived and it all went underwater. Or you bought an apartment in a town where industry was booming, but now it has gone bust and you can’t give the place away. These are the sorts of things people fear most about investing interstate. So do your research, thoroughly. Other things to consider are whether there are any hidden costs, fees or taxes in the state you are considering investing in.

# Visit the local area

If you can, spend some time in the area you are planning on investing in. Local knowledge will beat second-hand information every time. If the numbers add up, the next thing is determining if the property is as good as it looks. A healthy dose of scepticism and knowing the tricks of the real estate photographer’s trade will help you avoid getting sucked into a bad deal. If you still aren’t sure, and really cannot visit the property yourself, you may want to consider enlisting the services of a buyer agent.

At the end of the day, the most important thing is getting a healthy return on your investment; if you are lucky enough to live in an area that is also great for investing, then look no further!  Sometimes it really is a case of better the devil you know…

Higher Bid, Holding Out or Not?

# Staying with an offer

The familiar axiom goes that a flying creature in the hand is worth two in the hedge, and in any event to a point, believe it or not. Tolerating an offer in the hand implies your property will (spare any impossible fiasco) offer, and you can proceed onward to the following section of your life. What’s more, who doesn’t care for a touch of sureness in this insane round of life?

This is an especially decent choice if the cost on offer as of now meets (or surpasses) your desires. You’re not being eager but rather are tolerating an offer for your property that you feel is reasonable and that permits you to purchase your next property or apportion the cash to support different undertakings.

On the flip side, you may be desperate to off-load the property for whatever reason, or there could seem to be no sign of any other offers coming through. Of course, the latter is indicative of a falling or stagnant market, in which there are limited buyers. Also, those who are looking to buy will be showing restraint in their offers as they try to bag a bargain. As such, it may be a wise financial decision to accept the offer in hand, instead of risking the property lagging on the market indefinitely.

# Pushing the price higher

Choosing to wait for a higher offer is not just the domain of property sellers. Sharemarket investors often hold out for a higher price when it comes to a corporate takeover, for instance, and the very notion of auctions – property auctions, antiques auctions, automotive and industrial goods auctions and so forth – is built around the concept of waiting for the price to go as high as possible before selling.

Deciding to reject any offer in the hope of receiving a higher one is always a gamble. When choosing this option, you should consider both the overall strength of the property market in your area as well as the level of interest so far in your property. Chances are that when property prices are rising strongly and you’ve had a flood of people through the door during inspections, holding out for a higher offer may not be a big risk at all.

The most enticing situation to hold out for is when you have more than one buyer competing for the property. In this case, you can play each buyer against the other until either you reach a price you’re happy with or you hit the point at which one offer comes up trumps.

Of course, the ultimate decision of whether to accept or reject an offer or bid for your property really depends on your individual circumstances. Leave emotions at the door and look solely at the facts of the situation and the level of interest in your property, then discuss the situation with your agent before making a decision that reflects what is best for you.

Interest Rates in Simple Looks

Loan cost settings are a key calculate financial action, including the execution of Australia’s lodging market.

Higher loan costs lessen moderateness, backing off lodging movement and making repressed request. Bring down rates enhance moderateness, discharging repressed request.

It is this request – driven by abnormal amounts of movement, a lodging lack and Australians’ compelling passionate connection to home possession and property speculation – that supports the strength of the lodging market.

It additionally implies that the loan fee cycle and house value development are firmly connected: falling financing costs drive up costs; rising rates drive down costs.

# Cost of borrowing

Interest rate settings are a key macroeconomic policy tool. The RBA determines the rate settings and monetary policy at its monthly meeting, where it sets the cash rate that determines the cost of borrowing and indirectly how much is earned from money on deposit.

It increases interest rates when it wants to slow down price growth, controlling inflation. Increasing rates raises the cost of borrowing, which reduces demand in the economy. If the RBA wants to stimulate weak economic activity, it reduces rates to increase demand.

The RBA takes several factors into account when it’s setting the cash rate, including inflation, pay rises, the unemployment rate, jobs growth, the strength of the Australian dollar, gross domestic product (GDP) and house prices.

# Moderating pay rises

Wages growth is important to the RBA when it’s setting official interest rate policy. Strong competition for labour in a robust economy can lead to a wages/price spiral that feeds on itself. Raising interest rates in this scenario aims to slow down the economy and moderate pay rises.

Unemployment levels are also very important when setting rates. Higher and rising unemployment is a drag on overall economic activity. By lowering interest rates and borrowing costs, the RBA is trying to increase demand for labour and reduce unemployment.

Both variable and fixed mortgage rates are essentially determined by the level of the official cash rate. The banks keep a close eye on the RBA and when it raises the cash rate, your mortgage is likely to go up. When there is a rate cut, your mortgage rate will usually fall.

Should You Buy Low Maintenance Home?

While many Australians are more than happy to maintain an older home on a quarter-acre block and spend weekends weeding, mowing and repainting in exchange for space for the kids to run around, such homes no longer suit a large proportion of the population.

For many singles and professional couples, the perfect Sunday morning is spent relaxing with friends or reading the newspaper over brunch at their favourite local café; not dusting, mopping, weeding and mowing at home. For older people, simply keeping up with home maintenance can be problematic due to less mobility, or they would rather be out on the golf course than doing the housework.

# Choosing durable materials

A low-maintenance home should be designed to require little regular upkeep and have inbuilt durability in the materials used, so they rarely, or never, require repainting or other maintenance. Look for tiled roofs, non-timber durable cladding, solid-brick or concrete-block construction and aluminium timber-look decking for low-maintenance living.

Inside, the use of hard flooring such as timber or tiles reduces housework, as does flush, built-in storage that doesn’t allow dust to collect on shelving. A central vacuum system or automated vacuum cleaner can further reduce time and energy spent on house cleaning. Appliances such as a self-cleaning pyrolytic oven or an automatic defrost refrigerator further free up time that would otherwise be spent on household chores.

# Easy outdoor spaces

A small courtyard or terrace can be used to enjoy the outdoors while remaining virtually maintenance-free if plants such as succulents, drought-resistant Australian natives or a slow-growing grass variety are planted.

Low-maintenance living need not mean downsizing to an apartment or townhouse; the amount of upkeep and maintenance required even in larger family homes can be considerably decreased by following the same principles of using durable materials, incorporating easy-to-clean elements and landscaping the garden so it is designed to virtually look after itself.

In the long term, a low-maintenance home not only frees up much of your spare time on weekends and makes day-to-day organising a breeze, but it can also save you considerable sums of money because there will be no need to repaint weatherboards, re-stain decking or replace rusted tin roofing.

# Passive design

Whether you are building, renovating or buying, keep passive design in the back of your mind. Passive design eliminates the need for heating or cooling by using clever design and nature to do the work for you. If your home is passive you won’t have to worry so much about the temperature or your bills. This can save you money and also make your home more comfortable no matter what season it is.

If you are in the market for a new home, and the idea of low-maintenance living appeals to you, start by making a checklist of your requirements that will reduce the amount of time you spend on housework and garden maintenance. Then look forward to spending your extra free time on the things you enjoy in life.