Don’t Pay More Than You Should… How To Get Cheaper Rates!

By on May 16, 2012 in Blog

ratesAs we’ve seen in recent months, major banks not passing on rate cuts generally causes the sort of shock and controversy, which causes people to sit up and take note. And in this situation, smaller lenders may be a more viable option.

While some banks refuse to move their rates, others will. When banks move rates in either direction, this can often create confusion in the market place. However it can also create opportunity as many any of the smaller lenders are looking to take advantage of such movement and acquire a bigger market share by offering attractive lending packages. So it can definitely pay to talk to good broker to make sure that you have got the best deal available.

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Cut Your Mortgage Loan Term in Half! 10 Tips for Paying it Off Sooner…

By on May 11, 2012 in Blog

mortgageAnyone who has ever had to pay off a mortgage will tell you they would love to pay it off before the term, but most people will continue to chip away at their loan on autopilot. A proactive strategy can cut your loan term from 30 years to less than half in some cases.

 

Robert Projeski of Australian Mortgage Options offers 10 ways on how to own your home sooner…

 

  1. Pay your mortgage as you receive your income – for example, fortnightly. This cuts down on interest payable and can save you a lot of money over the course of your home loan. As there are 26 weeks in a year, but only 12 months, you effectively end up paying one month extra annually, reducing both time and interest on your home loan.

 

  1. Set up an automated recurring payment for your mortgage payments. This is usually free of charge and means that you are always on time and can’t overspend on other things, leaving you short to meet your payment obligations.

 

  1. Park a large lump sum into your mortgage account. For example, if you get $2000 back from your tax return, receive dividends from other investments, sold a car, boat or caravan or get bonus payments from your job, make a large payment towards your mortgage. These large lump sums can cut years worth of interest off the loan. You’ll need a re-draw or line of credit facility in order to have access to these funds when you need to.

 

  1. List your regular expenses and you’ll find one or two items that you can do without. Whether it’s buying your magazines as subscriptions rather than at the newsagent or pooling your family’s mobile phones and home phone on one plan, often giving you free calls in between all your numbers – these can present a considerable saving. This will make a big difference to your cash flow, freeing up disposable income to put into your mortgage account.

 

  1. Make a habit of going only your bank’s ATMs. The charges (usually $1 to $2.50 per transaction or account enquiry) can easily add up to a nice little amount ($60 to $120 per month) that can remain in your pocket or go towards your loan. Another way to save on transactions is to get cash out on EFTPOS purchases rather than using ATMs.

 

  1. Increase your repayments. You can cut up to two years off the lifespan of your loan by paying an extra $30 to $50 on each payment. This may just mean cutting out an extra cup of coffee here or there or occasionally taking lunch to work rather than buying it.

 

  1. Have your wages paid directly into your home loan account, but you’ll need a loan with re-draw or line of credit type facility so you can have unlimited access to the funds for living expenses etc. This will greatly reduce the interest that you pay as the interest is debited at the end of the month and usually calculated daily.

 

  1. Offset your loans with a savings account. This is called mortgage offsetting, whereas the amount in your savings account (earning interest) is calculated/subtracted against the actual interest charge against the loan amount, then the interest is calculated only on the balance. For an example, if your loan is $400,000 and you have $100,000 in savings, this equates to $300,000 on which you actually pay interest. This of course greatly reduces the amount of interest you effectively pay and will save you years on your home loan.

 

  1. Perform a mortgage health check. Sometimes you just have to admit your loan might not be the best for you anymore. It may have been superseded as a product or interest rates may have changed drastically, leaving you better off with a variable rate than a fixed one. In that case, look at refinancing.

 

  1. When refinancing, consider pooling or consolidating any other loans (such as a car or personal loan) and credit cards (with a much higher interest rate) into the one loan as the savings often will outweigh the slightly higher loan amount. And if your repayments end up being lower than they were, consider keeping the same amount going. The extra on each payment can really slice some cost/time off your loan.

 

Extra tip: If you’re refinancing, consider making a lump payment at the start. Most loans are set out that you pay more interest in the earlier stages. So if you pay only $100 at the start, this can add up to about $1,600 in interest savings over the life of the loan. Ideally throw a lump sum against your loan, which instantly reduces the premium and hence the interest payable.

 

Source : Australian Property Investor (3 February 2012)

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Property Investment Is Not A Get Rich Quick Scheme

By on May 9, 2012 in Blog

property investmentSome may describe the market as “sluggish”, others describe it as “normal real estate conditions.” Whatever the case, property investment has never been a get rich quick scheme.

 

Property is a great investment over long periods of time.

Too often people get excited when the market booms and fast gains can be made. This type of market is rare and generally lasts for short periods. The current climate is typical of a normal real estate market where one can make steady long-term gains over time.

History shows that property has proven to be a great investment averaging annual growth of upwards of 7% per annum over 10 year periods. This provides the opportunity for property values to double every 7 – 10 years.

There are riches to be made through property investment but a sound strategy and patience are the keys.

Please feel free to contact us for free expert advice on all your property investment needs.

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Bottoming Out… Are Brisbane’s Property Prices Now as Low as They Can Go?

By on May 5, 2012 in Blog

Herron Todd White May 2012Many perceive that Brisbane property prices have gone as low as they can and this has been confirmed in the latest Herron Todd White May 2012 Month in Review and National Property Market Report.

Our office certainly has recorded massive growth in our results for the first four months of this year compared to last year. Perhaps this is confirmation that buyers believe it’s time to act before prices increase?

I am not expecting massive changes in prices in the near future but would say to buyers the market is obviously at a low point and the only real way to pick the lowest point is when you have missed it! So if you are looking to buy now is a good time to do so!

Read the full report on what’s happening across the nation here:

http://propertysalesbrisbane.com/wp-content/uploads/2012/05/Herron-Todd-White-Month-In-Review-May-2012.pdf

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Are You Covered for a Disaster by Your Insurance?

By on May 2, 2012 in Blog

insuranceSo far, it’s been a wild year, with January offering up bushfires in the west and flooding in the east.  When was the last time you checked your insurance policy, to make sure it’s up-to-date and be 100% certain of exactly what it covers?

 

ASIC’s Senior Executive Leader Financial Literacy, Delia Rickard, suggests checking your policy or contacting your insurer and asking them exactly what events you’re covered for and what’s excluded, for example: damage from flooding!

“Some home and contents policies may not cover damage from floods, or may have caps on how much you can claim for flooding and other events,” says Ms Rickard.

`Make sure you have enough home insurance cover by using online calculators on insurance websites to estimate the total cost of rebuilding your home. Try a couple of calculators to compare because the results can differ. Be sure to shop around for appropriate cover and quotes. Phone potential insurers, and ask lots of questions,” she advises.

Home insurance policies are usually either `sum-insured’, `extended replacement cover’ or `total replacement’ policies.

Sum-insured cover is more common and will cover you up to a set amount that you choose. Extended replacement cover policies have a sum-insured amount, but will provide a limited amount of extended cover in the event of a total loss. Total replacement cover covers the costs to rebuild your home to the standard it was prior to the event, thus significantly reducing the risk of being underinsured.

There are a number of variations to these basic models, so read the fine print and ask as many questions as possible when comparing insurers. The key is to be sure your policy covers all the costs of rebuilding your home.

If you are renting, you should consider insuring the valuable items that you couldn’t afford to replace, such as your car, boat, tools of trade, and expensive home contents.

See the insurance articles at www.moneysmart.gov.au for more details.

 

Source : Quartile Property Network (3 February 2012)

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