You don’t always need to wait for the auction – here’s why

So you’ve found the house of your dreams. But there’s a catch – it’s going to auction so all you can do is wait and hope you’re the lucky bidder, right? Nope, there is another option. It’s one that could see you with the keys in your hand without ever having to hear the bang of the auctioneer’s gavel.

Putting in an offer before auction

In today’s competitive real estate arena, it’s common for interested buyers to put in an offer before a home goes under the hammer.

If you find yourself in this boat, there’s a few things you should understand and get in place to increase your chances of success.

  1. Get your finance sorted – make sure you have your loan pre-approval firmly in place before submitting an offer.

 

  1. Ensure it’s legal – get your conveyancer or lawyer to review the contract. While you may be in a hurry to snatch up the property, you should ensure there are no surprises in the contract ie property covenants (building restrictions) you need to be aware of.

 

  1. Consider the competition – the estate agent will present your offer to the vendor. But they will also notify any other interested parties and invite them to counter-offer. As the agent works for the vendor, it’s their job to act in their best interests to try to drive up the price. This may result in a ‘boardroom auction’ where you go back and forth until the highest offer is submitted. Be prepared for this and understand it may not go your way, or be the quiet purchase you envisaged.

If you have all these things in place, buying a property by submitting an offer before auction can be exhilarating. We wish you the best of luck and hope you end up with the keys in your hand at the end!

Using your super to buy your first home faster

If you’re a young Aussie trying to buy your first home, you know exactly how hard it is to get your foot in the door … of the bank that is, not the potential property! But the federal government recently announced a new superannuation scheme that might just make it that little bit easier.

The First Home Super Saver Scheme

As the name suggests, the First Home Super Saver Scheme targets first home buyers. As of 1 July 2018, those who qualify can take out any voluntary superannuation contributions made after 1 May 2017 to put towards a deposit on their first home. Voluntary contributions include personal as well as salary sacrificed ones.

How you benefit

By using this scheme, you’ll get a considerable tax break so you can save up for that all-important deposit much faster. It may be a better alternative than getting taxed at your marginal rate and then putting whatever you can afford to save into a savings account – especially when you consider super fund returns are generally better than bank interest rates!

Getting further help to secure your first home

Still not sure if this scheme is right for you? We can help by looking at your numbers and discussing the options available to you so you’re well on your way to getting that dream home , rather than later!

Please remember you will need to check with your own fund and a super expert about how this may work for you.

Home loan approvals – have the banks really changed that much?

If you think it’s tough to get into the housing market, the home loan approval process ain’t much better! The past twelve months have seen an enormous amount of change in lending parameters. This can come as a rude shock to those applying for loan. Here’s some information about what the banks are now looking for and how you can up your chances of approval.

New criteria

Banks are now stricter when it comes to lending. It’s no longer a simple process of assessing your income to ensure you can afford to make your repayments and then bang, there’s your loan. It’s quite different.

Apart from tightening their lending criteria, banks are now scrutinising your living expenses. To be eligible for a loan, you’ll be asked a whole bunch of in-depth questions about your spending habits.

Things like:

  1. How often do you eat out?
  2. Do you go to the gym?
  3. Do you have Foxtel or digital streaming services?
  4. What is your mobile phone plan like?

And so on.

Your best shot at approval

Apart from strict lending criteria and the vast amount of detail they require, each bank also has their own preferences. These can make all the difference between an approval and a decline. This is where an experienced broker can help.

At Professional Partners, we keep up-to-date with the ebbs and flows of what each bank requires. We understand the ‘ins and outs’ of different bank products, application details and what best matches your unique requirements to get your loan approved – fast. Contact us today to chat about how we can help you secure your loan approval and get you well on your way to your dream property.

Getting a home loan approved is like mastering a game of chess

Gone are the days where you could assume that a steady income would grant you some kind of home loan. The current lending environment is a fickle one!

What many fail to realise is that getting approval is much like playing a game of chess – make one wrong move and check mate, you’re declined! 

Why you need a Grandmaster to help you get your home loan approval

Entering the loan game as a beginner (having never played before) or with limited experience (having secured a loan or two previously) is risky. Just like competitive chess, if you make the wrong move you can’t retract it. And a bad move to make is  choosing the wrong bank for your situation. For example some banks’ are ok with different employment modes, some are better with investors and others are better with self-employed.

To combat this, you need a Grandmaster in your corner; someone who has played the game hundreds of times and knows the nuances involved in making the right moves to ensure your home loan is approved the first time. An expert who intimately understands what different banks look for; or when one says ‘that’s your maximum loan amount’, can find others out there that may be more flexible.

Our Grandmaster difference

We’ve been playing in the same league as the banks for over a decade. With a 98% loan approval rate, we’re not shy to say we’re pretty good at playing the game!

If you think you could benefit from our moves and making sure you’re with the right bank, contact us today for a no-obligation chat. We’d love to place our best pieces on the table so your game ends in the ultimate checkmate – your much-desired loan approval!

Top tips to help you manage your money

Everyone loves a little extra cash in their back pocket. Use these simple steps to get your money working harder for you and put you on the fast-track to wealth.

 

  1. Review your expenditure

Put your lifestyle under the microscope and work out where you can make savings. Ask yourself: ‘What can I live without?’ Is it essential you go out for dinner every week? Do you really need a car upgrade every 3- 4 years?

What about other outgoings? Look at everything from petrol to groceries to transport and rent. Try to identify where you can cut corners on costs without making too many compromises on the quality of your lifestyle.

 

  1. Be mortgage-smart

There are many useful tricks to squeeze the most out of your biggest financial commitment. Consider upping the frequency of mortgage payments (e.g. weekly rather than monthly); use a mortgage offset account and/or continue with the same repayments even if the interest rate drops.

 

These small changes won’t have a huge impact your lifestyle but you’ll soon see the massive difference they make on the length of your loan and how much interest you pay.

 

  1. Get in the savings habit

Automatically schedule a set amount of your pay each month/week into your savings account. It’s a great way to form a ‘better-money-management’ habit. It doesn’t really matter how big or small the amount is – all that counts is you save something and form the habit. In time, you’ll find it much easier to increase the amount you put away.

 

  1. Review all bills regularly

Just about every bill benefits from a regular review, whether that’s monthly, quarterly, half-yearly or annually.

Consider everything – utilities, mobile phone plans, internet, insurance (car, home and health), gym memberships, even children’s lessons (ask for discounts if they’re doing multiple lessons or you have more than one child doing them).

Don’t be afraid to haggle to get a better deal. Most companies have some wiggle room if it means keeping your custom. You can do it online but may experience greater success over the phone. Bundling plans and insurance is always a good cost-saver too.

 

  1. This one is hard but it’s key

Now this tip can be tricky to stick to but try your best to only spend what you have. Credit cards are not cash!

 

Need help?

Are you struggling to stay on top of your spending? If you could use an extra hand in getting your budget under control, feel free to contact us here at Professional Partners. We can offer you a range of great advice from helping you forecast your budget to innovative tools to assist with mortgage repayments.

Refinancing can be painless – here’s how

If you’ve had a mortgage for some time, you’ve probably thought about refinancing at least once or twice. It could be because you’ve had a bad experience with your bank treating you more like a number than a customer. Or perhaps you want to borrow more money but your current bank hasn’t presented any enticing offers.

Whatever the reason, refinancing is often about finding a better deal. But most people don’t get beyond thinking about it because they fear it’s a costly exercise. However, this is an all-too common misconception.

 

It doesn’t have to cost you the earth

Refinancing costs have dropped significantly over the last few years. This is great news if you think you’ve found a better offer.

If you’re in this boat, follow these easy steps to get on the right refinancing track …

 

3 simple refinancing steps

  1. Review your current bank loan: Make sure you fully understand all associated fees (including deregistration and valuation fees) and your current interest rate.
  2. Reflect on how you use your existing bank accounts: Do you need an offset feature or a linked savings account? What fees are you paying (for instance, to use ATMs, a monthly account charge etc)?
  3. Speak to a mortgage broker: Being professionals, they’re in the best position to advise on what’s out there and whether you can get what you really want. They may even be able to direct to you a deal you didn’t know existed. Another advantage is they can manage the entire process for you – saving you time, stress and most importantly, money!

 

Unsure of what to do next in your refinancing journey?

If you’re still a little confused about the process or need further assistance locating the right deal, then contact us for an obligation-free chat. We’ll use our years of expertise to provide you with a diverse range of refinancing options to ensure you get the best fit for your needs today.

Starting a family & upgrading my home – can I do both at the same time?

Starting a family is a very exciting time in your life. It’s also a time when you start thinking about upgrading your home. But can it be done on a reduced income when your partner takes maternity leave? In this post, we address this important question and hope to provide you with some advice to help you answer it.

 

The loan term matters

When you take on a mortgage, the bank don’t expect you to repay it back quickly. It’s not really in their best interest if you do! That’s why they offer you a 30 year loan term.

Thirty years is a long time. Consider all the things that will happen to you over that period. We guarantee you will experience all sorts of significant changes and starting a family (and the resulting reduced income) is just one of them.

 

A longer-term approach

Making a decision to extend your current home or upgrade to a new one shouldn’t be based solely upon a one or two year period when your partner is not working. A wiser move is to look further than that.

Sit down and discuss what your situation might look like post-maternity leave beyond the first few years. Consider reduced work hours, reduced income and who’s going to look after the kids if your partner goes back to work. Think about the change in expenses too when you go from being a double-income-no-kids unit to one with a young family.

 

Seeking advice

After these discussions, you’ll have a good feel about what you can and can’t afford post-maternity leave. You can then start to consider your upgrading options: whether to purchase a new property or even extend your current one.

This is when a mortgage broker can be of most benefit. It’s our job to help you see into the future and help you forecast and budget for big life events such as upgrading your lifestyle. Ready for some help? Then contact us for an obligation-free chat.

 

‘The Fast and Furious’ version of paying off your mortgage

We wish we could say there was a magic formula or easy way to pay your loan off fast. But we can’t (well, we could but that would be a lie and we don’t roll that way!). It simply takes time and hard work. However, we can offer you some numbers that may put a smile on your dial. The following example scenarios illustrate how you can still save hundreds of thousands of dollars in interest if you make a sound financial plan and commit to it.

 

The working example

Let’s assume you have the following:

  • loan amount: $500,000
  • monthly repayments: $2,400pm
  • 30 year loan term
  • interest paid over life of loan: $360K

Now take a look at each scenario below to see how the numbers stack up.

 

Scenario 1 – making extra repayments

  • loan amount: $500,000
  • increase your monthly repayments to $3,000pm
  • pay off loan in 20 years (not 30)
  • interest paid over life of loan: $225K
  • save around $135K in interest & pay off loan 10 years earlier

 

Scenario 2 – increase repayments according to CPI increase (3% PA repayment increase)

  • loan amount: $500,000
  • monthly repayments: $2,400pm
  • year 1 – pay $2,470pm; year 2 – pay $2,550pm; year 3 pay $2,620pm etc
  • pay off loan in under 20 years
  • interest paid over life of the loan: around $250K
  • save around $110K in interest & pay off loan 10 years earlier

 

Scenario 3 – combine scenario 1 & 2

  • loan amount $500,000
  • increase your monthly repayments to $3,000pm + add in CP increases each year
  • pay off loan in 15 years
  • interest paid over the life of the loan: around $185K
  • save around $175K in interest & pay off loan 15 years earlier

 

What this all means for you

Scenarios 2 and 3 are effectively a nifty forced saving plan. By choosing either of these options, the principle amount you pay off results in huge savings to your hip pocket. You reduce the loan term by 10-15 years thereby saving all that interest. Imagine what you could do with all the extra cash?

 

These scenarios are just one of the great tools in our investment arsenal that we can help you employ to keep your repayments on track. Connect with us as we’d love to share them.

Is it time to fix your interest rate?

There are a few different reasons to fix your mortgage rate but in our opinion, not all of them are valid. Let’s see if you can pick the right one:

Should I fix my rate to:

  1. Beat the bank and interest rate market?
  2. Save money?
  3. Manage risk?

 

If you answered C, you’re a winner!

To understand why, think about this. What would your budget look like if rates were to rise by 0.5%, 1% or even 2%? If that thought gets your heart racing a little bit, then it just might be a good idea to think about fixing.

At Professional Partners, we offer a complete interest rate sensitivity analysis service for our clients to help them see the impact of a rate rise on their budget. With rates more likely to go up – rather than down – in the next few years, it might be a good time to contact us to take advantage of this service and give your budget a good ol’ tune-up.

Budgeting 101 For New Parents

Having a baby brings much anticipation and joy. But it can also be stressful too as you start to think about juggling your mortgage with all the new expenses a family can bring – not to mention a reduction in income when your partner goes on maternity leave. There are, however, a number of ways to manage this and keep your finances on track.

 

Top tips to managing your budget when you start a family

 

  1. Plan ahead – make sure you understand your employer’s maternity leave policy and what you are entitled to in terms of government benefits.
  1. Watch your savings – if you have savings, ensure you adequately manage them by adding to your account wherever you can, rather than ‘dipping in’. If you have to dip in then pay yourself a set amount via a direct transfer each month. This way, you won’t be tempted to pull out more and more on an ad hoc basis which can quickly eat into your savings nest egg.
  1. Keep a tight rein on debt – avoid running up credit cards and personal loan debts. Use the direct transfer method to keep it under control.
  1. See if you qualify – your bank may offer a ‘repayment holiday’ for up to 12 months if you’ve had your mortgage with them for some time or have extenuating circumstances. Contact them to see if you’re eligible.

 

These are just some of the ways you can manage your mortgage repayments as you welcome a new family member. For more, speak to one of our mortgage brokers here at Professional Partners. We can offer you lots of great advice from helping you forecast your budget to innovative tools to assist with repayments.