Category: Strategy

It has finally reached Spring in Australia bringing with it blossoming flowers, warmer temperatures, and increased rainfall to all of us in the southern hemisphere. With those temperatures warming up, seeing how the property market reacts will be interesting.

The Australian property market has been intense over the last few years, and it is still growing further according to a study by CoreLogic. Prices for properties rose by 0.7% in July this year after four months of previous increases. This is why it is important to consider these tips when purchasing your property this spring.

Tip 1: Work Out Your Finance

Nothing is more disappointing than doing months of research, property hunting and visiting open homes only to find out that you could never get the home loan you needed in the first place.

Speak to a mortgage broker like us at Read Finance. Mortgage brokers can take your current position, financial goals and plans on board while providing professional advice catered to your unique circumstances.

A mortgage broker could look also at getting a pre-approval from a lender for you, which gives you an idea of what a bank or lender may lend to you. Potentially providing you with more confidence when dealing with sellers or real estate.

Tip 2: Research Houses and Locations

Location is often cited as the most crucial factor when searching for a property. The safety of the neighbourhood should be paramount; you can usually check crime rates and statistics online on websites that have scraped publicly available data and placed that data on a map. Proximity to essential services such as schools, hospitals, public transportation, shops, and other amenities is also vitally important.

Consider the future prospects of the area. Which of the following is it:

• Up-and-coming neighbourhood
• Stable
• Declining

A growing area might offer a good return on investment, but it might also mean dealing with construction and a rapidly changing neighbourhood dynamic.

Size and layout are also key considerations in selecting a property. Determine the size of the property you need, including the number of bedrooms and bathrooms. This is often dictated by your long-term goals for the property. Consider whether the property is for living, investment, or rental purposes. For instance, if you plan on renting out the property, a place with more bedrooms might fetch a higher rental income. Your long-term goals will also affect other aspects of your property search, such as the location, size, and type of property you consider.

Availability of public services and utilities is another essential factor to consider. Check the availability of essential services like water, electricity, gas, and internet. Some rural or newly developed areas might not have reliable access to these services, which can be a significant inconvenience. Also, consider the history of natural disasters in the area like floods, earthquakes, bushfires, etc. Properties in areas prone to natural disasters might have higher insurance premiums, and you might need to invest in additional safety measures.

Local amenities, including parks, gyms and clubs can significantly impact your quality of life in a new property. Proximity to these amenities can also increase the property value, making it a better investment. Finally, consider the noise levels and surroundings of the property. Are there any factories, busy highways, or train tracks nearby? These can be significant sources of noise pollution and can affect your quality of life and property value.

Tip 3: Get Professional Help

Using professionals could greatly streamline the process of purchasing a property by providing professional advice based on your unique circumstances. Here is a list of five potential professional services that you could use when buying a property:

Mortgage Broker

Mortgage brokers act as a middleman between you and potential lenders. Their role is to work on your behalf to find the loan that suits your needs. Some mortgage brokers like Read Finance will continue to monitor your mortgage over time to ensure that it is still competitive while suiting your interests. Get in touch with us today as it’s never too early to get advice or start the process.

Real Estate Agent

A real estate agent in Australia can be invaluable due to their extensive knowledge of the local property market and network of contacts. They can help you find properties that match your criteria, arrange viewings, and guide you through the negotiation process. Just remember that they are working for the seller and are aiming to get them the best deal that suits their clients needs.

Solicitor

A solicitor will handle all the legal aspects of the home buying process. From reviewing and helping you understand the contract to handling the transfer of ownership and ensuring that there are no legal issues with the property. Having a solicitor helps to ensure that all the legalities are taken care of.

Accountant

An accountant can provide valuable financial advice, help you set a budget, understand the tax implications of buying a property, and assist in securing a mortgage in Australia. Their expertise is particularly crucial in a country where there are several tax considerations and incentives for home buyers.

Buyers Agent

A buyers agent is a professional who represents the buyer in a real estate transaction. They can help by sourcing suitable properties, negotiating the purchase price and managing the buying process on your behalf. In the Australian property market, where demand has soared in different parts of Australia recently, a buyers’ agent can help you gain a competitive edge by leveraging their network and expertise to secure a property that meets your needs.

Conclusion

For prospective buyers, this season is an opportune time to strategically plan their investments, focusing on comprehensive research regarding property locations and assessing neighbourhood dynamics, amenities, and potential future developments.

Moreover, seeking professional help from services like mortgage brokers, real estate agents, and accountants can streamline the process, ensuring an informed and financially sound decision-making pathway in the robust Australian property landscape.

Make sure you reach out to us at Read Finance for a complimentary meeting where we can review your financial situation, goals and see how we can help you.

It’s time to set up your New Year’s resolutions and one important resolution you could be considering is to do with a home loan. So we’ve created a list of five ideas you can review and see for yourself if they align with your goals.

1. Reviewing Your Goals

Defining your goals is a great way to start with your New Year’s resolutions. This way you can get an accurate idea of what you want to achieve and then work out from there the way to achieve it. Make sure you set a deadline to achieve it as well.

For example, if you are looking at saving for a new home loan you should get an idea of the area you want to move into, the size of the house or apartment, and from here work out the amount of money you need to save.

2. Saving for a Home Loan

If you’re a first home buyer, next home buyer, or working towards an investment property then saving for a home loan may be the suitable new year’s resolution. 

An idea to help save money for a home loan is to set up a budget and strictly stick to it. There are tons of software available for purchase, but you don’t need to rely on software to do it. You can easily set up a spreadsheet to track your spending or use the old method of sorting your budget funds into labelled envelopes.

There is a simple formula to work out how much you need to save a week to reach a savings goal. Check the formula below and the example to assist with understanding it.

Formula: S / W = A

S = Saving Goal
W = Weeks to Save
A = Answer

Example: If you wanted to have $10,000 this year you would put $10,000 in a calculator and then divide it by 52 weeks to get your answer. The answer is that $192.31 needs to be put away each week for a year to save $10,000.

Formula: 10,000 / 52 = 192.31

3. Home Loan Review

One New Year’s resolution that is straightforward is to get your home loan reviewed to see if your current mortgage is still one that best suits your needs. You may be missing out on important features you previously didn’t want such as an offset account or even paying a much higher interest rate. This is why it is important to get your home loan reviewed.

You can get your home loan reviewed complimentary with me at Read Finance. Giving you professional advice on how your current loan compares to others in the current market. Providing you with the ability to change using our service if it’s in your best interest and you are interested.

Some people don’t realise the amount of savings they could have if they refinance to a lower rate. Take a look at this table which shows the estimated monthly saving you could get on a lower interest rate.

Estimated Monthly Savings With Lower Interest Rate

	-0.5%	-0.75%	-1%
$225,000	$67	$101	$133
$400,000	$121	$180	$238
$700,000	$211	$314	$416
$1,000,000	$302	$449	$594
$1,300,000	$392	$583	$772

Refinancing can also provide you other benefits that you should talk about such as debt consolidation, funds to renovate, or funds to invest. Eliminating your debt alone could be its very own New Year’s resolution.

4. Extra Repayments

Making extra repayments on your home loan to reduce the principal will not only reduce the amount you owe but also the amount of interest that you pay over the lifetime of the loan. Paying an extra $200 for the lifetime of a $300,000 loan at a 5% fixed interest rate for 30 years would save you around $69,000 in interest while paying it off just over 6 years earlier.

An alternative option is to have an offset account that you place extra money into to reduce the amount of interest you pay.

Some home loans that are on a fixed rate won’t allow you to make extra repayments, or they’ll limit the amount. Paying extra on top of these could lead to extra fee’s being charged.

5. Renovating

If you plan on renovating your home and don’t have the funds saved up, you could consider refinancing your home loan if you have enough equity in the property. Using those funds to pay for the renovation.

If you are lucky after the renovation, your home loan’s estimated value will increase after you have completed the renovations. A positive for if you plan on selling or renting the home out after you are done.

Conclusion

These are five news years resolutions you should really think about when it comes to a home loan in Australia. The value you get out of following one of them could be life-changing so make sure you do your research and contact us to help you achieve your goals.