While markets will fluctuate depending on geographic location, property in Australia on average doubles every eight to twelve years.

Investors that do their research, have a good understanding of their goals and take a long term approach will therefore usually realise good results from investing in property.

But it is not just the opportunity for capital growth that makes property a sound investment for the long term. The opportunity to leverage your investment is one of the most compelling arguments in favour of buying property – no matter where we are in the market cycle.

By borrowing the bulk of a property’s purchase price, property investors can achieve returns over the long haul that can far outstrip those offered by the share market or other asset classes. We hope you enjoy Investing in Your Future – Your Guide to Property Investment and use it to make smarter property investment decisions.

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1. Your Home, Your Mortgage
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Your Home, Your Mortgage aims to arm home buyers and investors with essential know-how and proven techniques to ensure you avoid the common pitfalls of financing a property.

With good buying opportunities across most markets – whether you’re buying a home to live in or for investment – knowledge and insights into the home buying process can give you a solid head start.

Throughout this handy guide you’ll find practical advice and helpful worksheets to steer you through the whole process – from researching the market and arranging your mortgage through to negotiating your property purchase and final settlement.

So whether you’re looking for your dream home or your first investment property Your Home, Your Mortgage provides insight and support every step of the way. We wish you every success in your hunt for your dream property.

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What’s not known about fixed rate home loans are the hefty break cost fees applicable should the property be sold, refinanced or altered during that term.

Below we highlight some common misconceptions and tips to help you borrow better and never be caught short when considering if a fixed rate home loan is right for you.

• A fixed rate is, by its very nature fixed, and will not decrease if variable rates do
• Significant break costs may apply if the fixed rate home loan is discharged early
• Break costs may be payable on a partial lump sum repayment during the fixed rate term
• A redraw facility or an offset account may not be available on a fixed rate loan
• A fixed rate home loan is not an appropriate option if you intend to or forsee that you may have to discharge the loan early for any reason
• Fixed rates on offer may increase (or decrease) during the period from the loan application to settlement of the loan, and that the fixed rate applicable to the loan will be the one applying at the time the loan was settled, most lenders offer a ‘lock in’ option at a nominal fee to alleviate this
• Extra repayments may not be possible or may be limited to a fixed amount per year
• Where a rate lock or lock in option is available, the borrower may wish to consider locking in the indicative fixed rate, the cost of the facility, the rate lock expiry date and its purpose

Fixed rate home loans are here to stay, working out if they suit you best is a decision that’s ultimately up to you and highly worth discussing with your local mortgage broker.

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Now I’m not interested in location specific guides and taxation loop holes. Anyone can utilise these tips and make them work. It also goes without saying- there is no miracle way to cut a 30 year mortgage in half, nor a special pill you chew 3 times daily. With just a little bit of work on your behalf you can potentially save thousands upon thousand in interest with a goal to being mortgage free sooner.

1. Ask for a better deal

My number one, easy as pie way to be mortgage free sooner is to ask for a discounted interest rate. Pick up the phone now and call your bank, your mortgage broker and that little credit union down on the main street corner, and simply (courteously) ask them for a better rate. This literally takes seconds to do and can save you big dollars. Don’t forget to put the extra you save back onto the loan!

2. Making regular contributions

No need to switch to weekly repayments- save the hassle. Instead, transfer any left over, surplus money back onto your home loan every week or day if you can. Be it $10 or $20, more if your lucky, every little bit counts when you want to be mortgage free.

3. Refinance

If tip number 1 didn’t go too well for you consider another lender. Here I’d usually recommend a mortgage broker, but if you know what your doing but you can potentially secure a better deal with lower repayments and a better term. Always make sure to check the outgoing and incoming lenders fee and charges- It may be just not worth it.

4. Feature overload

Consider this- Do you need that cheque book or that line of credit? Chances are that your paying extra for them. What suited you 2-3 years ago could now not be necessary, so why pay for it? Also consider integrating any other debt into the new facility. This sounds contrary to the whole “mortgage free sooner’ mantra but debt at 7% is a lot better than the same debt at 20%+.

5. Check your statement

Make a habit of checking your mortgage statement. You’ll want to make sure all the extra little contributions your making from the above tips are working for you and coming off the principle amount owed. Even banks make mistakes so it pays to stay on top by checking once a month.

6. Low interest rate? Pay more!

Depending on just where in the world you are, rates can be as low as 2% (here in Australia its more like 7%). I know it’s not always possible but whenever you can, larger lump sum payments can make a massive difference. It could be your upcoming Christmas bonus, tax refund or Melbourne Cup win- pay down your loan and be mortgage free faster.

By now you should be well on your way to being mortgage free sooner. Check out our mortgage calculators to see just how many years you can take off with these handy hints. Paying off your mortgage early isn’t for everyone, and in some cases it’s just not possible. But if you can, owning your own home and living a mortgage free life will be worth all of the hard work and sacrifice.

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When working through your loan options with your mortgage broker there are a number of issues to keep in mind to ensure you’re getting the most appropriate mortgage for your needs.

The type of loan

Different loan types tend to come with different interest rates. So if your loan has a range of features, such as re-draw, offsets or early repayment facilities, you’ll usually pay a little more in interest.

Alternatively, while a basic loan doesn’t have all the bells and whistles of other products the interest rate is typically lower. When assessing which loan best suits your needs, ask your broker to explain how the different features work to assess whether they are worth paying a higher rate for.

For example, if you’re looking to drive your mortgage down quickly or would like flexibility in your repayments, it may be worth paying for the features needed to do this most effectively.

The type of rate

Interest rates move up and down in line with the economic current cycle. With rates looking certain to continue their upward march for the immediate future, some borrowers are choosing to fix their home loan rate – or ‘lock in’ a rate for a set period of time.

If you’re considering this option, it’s important to remember that a fixed interest rate is usually just higher than the current variable rate. However, if rates are on the rise and you’re concerned they’ll keep going up, fixing your rate will ensure consistency in repayments each month.

Alternatively a split loan can give you the best of both a fixed-rate and variable-rate loan. This means that if interest rates rise, a proportion of your loan will be protected – minimising the impact of higher monthly repayments. If on the other hand rates fall your fixed-rate will remain higher and the variable part of the loan will fall.

Interest rates and the impact of a rate rise

Should interest rates rise, there are a number of effective ways to lessen the impact on your finances:

Factor in possible hikes – Leave room for a number of interest rate rises when you assess your borrowing capabilities – this is essential, particularly now with rates on the upward climb. You may have to reduce your mortgage amount slightly or purchase property that’s at the lower end of your price range as a result.

Interest only – If you’re really struggling to keep up with rate hikes, you can consider changing to an interest-only loan. While not an effective long-term strategy for owner-occupiers, it might be an option while you deal with the
here and now.

Refinance – Your situation may have changed from when you first took out your mortgage – for example you’ve now only got one person in the household earning a salary. Interest rates between lenders are also changing dramatically as rates continue to rise. Ask your broker what mortgages are available that better suit your situation.

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First Home Owner Grant

First home buyers across Australia may be eligible for the Federal Government’s First Home Owner Grant (FHOG) which is a one-off, tax-free $7,000 gift from the Government.

As long as you’re a first time buyer above 18 years of age, and an Australian citizen or permanent resident, you’ll most likely be eligible for the grant.

The grant is administered by each state and can differ depending on each state’s respective legislation. For example, in Victoria first time buyers can also benefit from the First Home Buyer Bonus of $2,000 for established homes and $11,000 for new properties. Both apply for properties below $600,000.

For more information on the FHOG in your state visit www.firsthome.gov.au or contact us.

Stamp duty breaks and concessions

Australia’s State Governments have introduced breaks for the stamp duty associated with a property purchase.
Stamp duty is a tax applied to certain property transitions. When land is sold, transferred or leased, for example, stamp duty is generally payable.

It is usually the buyer, not the seller, who is liable to pay stamp duty. Payment must generally be made within three months of entering into the contract for purchasing the property.

The amount of stamp duty payable depends on the value of the property and the amount for which it is sold, transferred or leased. It is calculated on its market value or the price paid by the buyer.

Each State Government has its own rules surrounding stamp duty on property purchases. For this reason, the exemptions and concessions available differ from state to state.

Generally, however, first home buyers, vacant land holders, and farm buyers may be entitled to some exemption or discount on stamp duty. So it pays to check out whether any apply to you through contacting the revenue office in your state or territory.

Note: Details are current as at print date and should be confirmed with your local Office of State Revenue or equivalent body.

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Capitalise on market conditions and negotiate yourself a bargain, you could save thousands with out latest guide to buying a home!

There are now sections of the property market in Australia that are flat. Opportunities have emerge for the savvy buyer with the finances organised and proactive strategy in place.

Where there are fewer buyers in the market for the number of properties available for sale, and properties taking longer to sell, a ‘buyer’s market’. In those circumstances there is greater scope for driving vendors down on price when buying a home.

Buyers that have sound negotiation skills can score themselves a better deal. Here are a few key tactics for becoming a smooth property operator.

Know the market - Attend as many inspections and auctions as you can to find out what’s on the market, in the region you want to buy, and at what price properties are selling. Talk to agents and compare quoted prices with final prices. You might think a property is worth $500,000, but in that market it may be worth less. By knowing what properties are selling in your market for you’ll avoid over-paying.

Don’t be afraid to start low - Where there exists a buyer’s market, properties will usually sell at under their quoted price. There is no golden rule, but start seeking a discount upwards to 10 per cent (or more) than the price the vendor has listed. You’ll be surprised what you might be able to drive the price down to.

Consider a professional valuation - This may help you determine whether you’re paying fair market value. Don’t set your limit at an obvious, rounded number, because most people will do the same – Put your final price in at a more unusual number such as $358,500 rather than $360,000.

Get in quick - The early bird catches the worm, so move fast when looking at buying a home.

Know thy vendor - Find out as much as you can about the seller, including why they are selling, why they’ve set the price they have, how long the property has been listed for and how much interest/ how many offers they’ve had. The more you know the more power you’ll have in terms of negotiation.

Keep your cards close to your chest - Play it cool and don’t reveal too much to the agent. Lets face it- buying a home has never been an easy task, if you’re really keen you wouldn’t want them to know it.

When making your initial offer the trick is to restore low but not so low that your offer is dismissed. You want to offer enough to get the seller interested. If you are making a low offer, afford a decent reason – perhaps there’s no garage or the house needs a paint job, for example.

To acquire a lower price, you may also need to offer the seller some kind of incentive. One of the better ways to become an attractive buyer is to offer a quick sale, or if required, an extended settlement time.

Remember: find out what’s important to the vendor and use it as leverage, they will try the same!

Do you have any tips you can share on how to net a better deal when buying a home?

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In those areas, there’s a widening gap between demand for property compared to the number of properties available – there is greater latitude for buyers to negotiate on price. Combined, for many home owners these dynamics may influence your decision to not sell now.

If you’re looking for a new home or more space, rather than selling why not look at improving your current property – and, potentially, adding to its value to boot. Before you seek to renovate it is crucial to have a game plan to ensure the most successful outcome. Here’s five sure fire ways to capitalise on a renovation.

Research

Seek out a professional, such as a licensed builder, structural engineer or a certified plumber, for advice to determine whether there is enough scope in your property to benefit from renovation. Understand what adds value Different features hold different value on different properties, so focus on identifying what additions are likely to generate the most interest from prospective buyers for your specific property.

Plan

Even though the sums may add up and a profit (should you choose to sell) can be turned, all your hard work can be undone if you don’t plan which areas to direct your funds to. Make sure you set a budget and stick to it so you don’t over capitalise the property. It’s all too easy to let prices spiral out of control… successful renovators know their limits and know when to stop.

Finance

How you choose to finance your renovation can have a lasting impact on how much profit you make, plus the scope of works you’re able to undertake.

There are a number of different scenarios to finance your renovation, such as refinancing or using equity currently in your home. Give us a call and we can determine the best plan of attack.

Seek advice from the experts

Get a building inspector to take one last look to see if your property is structurally sound and doesn’t have any major problems. Renovations can sometimes reveal significant problems you were unaware of; for this reason be conservative in your estimates and factor additional funds into your budget in preparation for unexpected expenses.

Properties with potential

Not all properties were created equal, with some properties more ideal to renovate than others. Properties with a greater potential for renovation have:
• A desirable location
• A floor plan and structure that can be altered
• Structural soundness, free of pests
• Room to expand
• Significant scope for work
• Appealing neighbouring properties

Be sure to speak to the team at Lifestyle Loans when next planning your renovations- We can help!

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The state government has recently introduced a number of new incentives aimed squarely at the first home owners, concession card holders and pensioners in regards to stamp duty concessions.

First home buyers are now eligible for a 20% discount on the amount of stamp duty payable. The initiative was introduced 1st July 2011 and applicable to all properties settled on or after this date up to a maximum purchase price of $600,000.

Now if your in Victoria, this is in addition to the $7,000 existing First Home Owners grant already available for established homes. On the average $550,000 purchase price you can potentially save over $13,000 on stamp duty alone.

In addition to the 20% stamp duty saving, a further 10% reduction will follow each subsequent year amounting to a total of 50% by 1st September 2014 (so, 20%,10%,10%,10%= 50%).

This is great news for First Home Buyers providing it doesn’t artificially inflate properties as evidenced in the past though it looks like the staggered rollout will alleviate this somewhat.

Don’t be the old guy on our office wall waiting for the price of property to come down, these stamp duty savings may never repeat themselves again.

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1. Home Buyers Road Show

Lifestyle Loans in Partnership with AllianceCorp are proud to present this exclusive event.

Come join us on our property market tour, Jointly run by Melbourne’s preferred property coach, Jason Paetow who has vast experience with the Melbourne property market who presents this special event with in conjunction with Lifestyle Loans.

We expect that you’re a vigilant homebuyer or earnest investor, and these events aim to make you a more knowledgeable property buyer as great property purchasing opportunities are unveiled and buying strategies are revealed.

Join us for an educational experience that you can’t miss, get in touch with the Lifestyle Team and secure your position now.

BOOK TODAY. Tickets just $30. Bus departs from 28 Queensberry St, Carlton, Sat 23rd July at 9am, concluding at 1.00pm. Our property market tour is an easy and fun way to learn more, ask freely and see lots. Jump on board with for what is typlically an eye-opening experience for most.

LIMITED SEATS: To secure your place call (03) 9663 0009, or email info@lifestyleloans.com.au to get onboard our property market tour.

Download the brochure here Lifestyle Loans Property Tour.pdf.

Hope to see you all there!

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