Lenders are competing strongly for borrowers, especially those with strong credit profiles. As a result, borrowing activity jumped 18.2% between January 2024 and August 2024, according to the most recent data from the Australian Bureau of Statistics.During that time, owner-occupier borrowing climbed 14.9%, while investor borrowing surged 23.7% and refinancing also increased, rising 1.2%. If you have an existing loan and have not had it reviewed in the past two years, there’s a good chance a better deal might exist, or if you are in the market to purchase, please get in touch to find out.I can help you:Compare loans from a diverse range of lendersMaximise your borrowing capacityChoose a strategy and loan structure that suits your personal circumstancesGet in touch if you need a home loanHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Lenders competing strongly for borrowers
Why ‘buy and hold’ can be a lucrative strategy
About 20% of home owners bought their property in the past five years, CoreLogic has estimated. The data shows that 2021 was the most common year in which homes were last purchased, with 5.3% of all homes being bought in that year. It makes perfect sense for people to buy and sell homes every few years, because as circumstances change, we may need to upgrade, downgrade or relocate. That said, if you are able to hold onto a property for the long-term, there can be enormous benefits. First, you can avoid the transaction costs associated with buying and selling. Second, you can potentially enjoy strong capital growth. CoreLogic reports that the nation's median property price has increased by 70.2% over the past 10 years, 157.9% over the past 20 years and 425.9% over the past 30 years. Depending on your financial circumstances, it might be possible to move without selling your existing home if you turned it into an investment property. While you’d then have two mortgages, some of that extra cost would be offset by the rent you’d start collecting. If you want a larger or newer home, another alternative would be to renovate instead of moving: potentially, you could finance the project by borrowing against the equity in your home. Need a home loan? Let’s chat. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Why ‘buy and hold’ can be a lucrative strategy
Why 98% of borrowers are going variable right now
The vast majority of home loan customers are currently choosing variable-rate loans over fixed-rate loans.In August 2024, 98% of new loans were variable, while 2% were fixed, according to the most recent data from the Australian Bureau of Statistics.By comparison, in August 2021, when interest rates were at record-low levels, 46% of borrowers decided to fix, while 54% went variable.Interest rate expectations appear to be guiding borrowers' decisions.In 2021, when rates were at ultra-low levels due to the pandemic, most borrowers assumed they would rise sooner or later – so many chose to lock in those lower rates. Today, most borrowers assume rates have peaked, so they want a variable loan that will get cheaper if and when the Reserve Bank of Australia starts reducing the cash rate.Fixed vs variable:Fixed loans simplify budgeting, because your monthly repayments won’t change during the fixed periodAs a result, you won’t suffer when rates rise and won’t benefit when they fallVariable loans are unpredictable, because your repayments can change at any timeVariable rates go higher when rates rise and lower when they fall Want a competitive rate? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Why 98% of borrowers are going variable right now
Negative Gearing Explained: Understanding Your Property Investment
Negative gearing in property investments is a term that many people hear but may not fully understand. It happens when the costs of owning an investment property, like mortgage payments and maintenance, are higher than the income it generates. This means you are losing money on the property each year. However, many investors use negative gearing as a strategy to offset their taxable income. In this blog, we will explore what negative gearing is, how it works, and its potential benefits and risks for property investors. What is Negative Gearing in Property Investments? Negative gearing refers to the practice of borrowing money to invest in a rental property where the costs of owning the property, including mortgage repayments, maintenance, and other expenses, exceed the rental income generated by that property. In simpler terms, when a property is negatively geared, the investor incurs a net rental loss. This loss can often be used to offset other income, thereby lowering the taxable income, which leads to tax benefits that can be quite appealing for property investors. The mechanics of negative gearing are straightforward. An investor purchases a rental property using a home loan, and the associated costs—including interest repayments, property management fees, and maintenance expenses—outweigh the income received from rental payments. This net rental loss, or negative cash flow, can be claimed as a tax deduction. Thus, while the property itself may not be generating positive cash flow in the short term, the tax deductions can provide immediate financial relief by reducing the investor's overall tax bill. Difference Between Positive and Negative Gearing In contrast to negative gearing, positive gearing occurs when the rental income from a property exceeds the expenses associated with owning it. A positively geared property generates a net rental profit, which can lead to higher cash flow for the investor. Choosing between positive and negative gearing largely depends on an investor’s financial situation, investment goals, and risk tolerance. While negative gearing can provide immediate tax benefits, it may require a more substantial financial commitment and a longer-term investment strategy to realize capital gains. What Are the Benefits of Negative Gearing? One of the most significant advantages of negative gearing is the tax benefits that come with it. Investors can claim the rental expenses associated with their negatively geared properties as deductions against their taxable income. These deductions can include interest on the mortgage, property management fees, repairs, and maintenance costs, ultimately reducing the investor's income tax liability. For many Australian investors, this tax consideration is a compelling reason to engage in property investing, as it allows for a strategic approach to managing their tax bracket and overall financial responsibilities. Although negative gearing typically results in a net rental … [Read more...] about Negative Gearing Explained: Understanding Your Property Investment
Construction Loan: How Does Construction Financing Work?
FAQ's What is the first home owner grant for a townhouse? The first home owner grant is payable to eligible buyers purchasing a new townhouse. If you meet the criteria, you can receive financial assistance to help with your purchase. How does property value affect my eligibility for the first home owner grant? The grant is payable only if the property value meets certain limits set by the state. If your townhouse is within these limits, you may still be eligible for the grant. Can I apply for a loan if I have permanent residency? Yes, as a permanent resident, you can apply for a loan to buy your first home. Make sure to provide all necessary information about the first home and any relevant documents. What should I include in a comprehensive building contract? A comprehensive building contract should include details about the construction, costs, and timelines. This information is crucial when applying for a loan and securing your first home. How can I find out more about the first home owner grant? You can find detailed information about the first home owner grant on government websites or by contacting us directly. We can help guide you through the eligibility criteria that apply. If I have previously received a grant, can I apply again for another townhouse? If you have previously received a grant, you may not be eligible for another one. However, it’s best to contact us to discuss your situation and see if you may still be eligible. What are the benefits of having a comprehensive building contract when buying my first home? A comprehensive building contract protects both you and the builder by clearly outlining expectations and responsibilities. This can help prevent issues that may arise during construction of your townhouse. How can mould removal services help me as a first home buyer? Mould removal services are essential to ensure your new home is safe and healthy. If you’re buying a property with existing mould issues, it’s important to address them before finalising your purchase to protect your investment and property value. How do lenders determine the loan to value ratio for a bridge loan? Lenders determine the loan to value ratio for a bridge loan by assessing the value of your new property compared to the total amount of the loans you are taking on, including any existing mortgages. A higher ratio may result in higher interest rates or fees. Can I buy your new home without selling my current home first using a bridge loan? Yes, using a bridge loan allows you to buy your new home without waiting for the sale of your current home. This financing option provides immediate access to funds needed for purchasing while managing the sale of your existing property simultaneously. Get in touch if you need a construction loan.Hit the button below to arrange a conversation … [Read more...] about Construction Loan: How Does Construction Financing Work?
3 Things First Home Buyers Should Know Before Applying For a Loan
FAQ's What is the first home owner grant for a townhouse? The first home owner grant is payable to eligible buyers purchasing a new townhouse. If you meet the criteria, you can receive financial assistance to help with your purchase. How does property value affect my eligibility for the first home owner grant? The grant is payable only if the property value meets certain limits set by the state. If your townhouse is within these limits, you may still be eligible for the grant. Can I apply for a loan if I have permanent residency? Yes, as a permanent resident, you can apply for a loan to buy your first home. Make sure to provide all necessary information about the first home and any relevant documents. What should I include in a comprehensive building contract? A comprehensive building contract should include details about the construction, costs, and timelines. This information is crucial when applying for a loan and securing your first home. How can I find out more about the first home owner grant? You can find detailed information about the first home owner grant on government websites or by contacting us directly. We can help guide you through the eligibility criteria that apply. If I have previously received a grant, can I apply again for another townhouse? If you have previously received a grant, you may not be eligible for another one. However, it’s best to contact us to discuss your situation and see if you may still be eligible. What are the benefits of having a comprehensive building contract when buying my first home? A comprehensive building contract protects both you and the builder by clearly outlining expectations and responsibilities. This can help prevent issues that may arise during construction of your townhouse. How can mould removal services help me as a first home buyer? Mould removal services are essential to ensure your new home is safe and healthy. If you’re buying a property with existing mould issues, it’s important to address them before finalising your purchase to protect your investment and property value. How do lenders determine the loan to value ratio for a bridge loan? Lenders determine the loan to value ratio for a bridge loan by assessing the value of your new property compared to the total amount of the loans you are taking on, including any existing mortgages. A higher ratio may result in higher interest rates or fees. Can I buy your new home without selling my current home first using a bridge loan? Yes, using a bridge loan allows you to buy your new home without waiting for the sale of your current home. This financing option provides immediate access to funds needed for purchasing while managing the sale of your existing property simultaneously. Get in touch if you need a construction loan.Hit the button below to arrange a conversation … [Read more...] about 3 Things First Home Buyers Should Know Before Applying For a Loan
A Complete Guide to Property Investments for Beginners
FAQ's How does a bridge loan work when buying and selling a home? A bridge loan works as short-term financing that allows you to buy your new home before the sale of your existing home is complete. This type of short-term loan provides the funds needed to buy your new home while you wait for your current home to sell. Can I use a bridge loan mortgage to cover my current home loan payments? Yes, you can use a bridge loan mortgage to cover your current mortgage payments if you need additional funds while waiting for the sale of your existing home. This allows you to manage two loans until your current home is sold. What happens if my current home does not sell before my bridge loan term ends? If your current home does not sell before the bridge loan term ends, you may need to refinance into a longer-term loan or consider other options to manage the ongoing loan. It’s important to plan for this possibility when considering a bridge loan. Are there any fees or other loan amounts associated with a bridge loan? Yes, there can be fees or other loan amounts associated with a bridge loan, such as closing costs and interest payments. It’s essential to understand these costs before entering into a bridge loan agreement. How can a home equity loan be used alongside a bridge loan? A home equity loan can be used alongside a bridge loan to provide additional funds for buying your new home. This combination allows you to leverage the equity in your existing property while securing short-term financing. What are the typical bridging loan interest rates compared to other loans? Bridging loan interest rates are generally higher compared to traditional home loans due to their short-term nature and quick approval process. It’s crucial to compare these rates with other types of home loans before deciding. How does the sale of your existing home affect the bridge loan process? The sale of your existing home is critical in the bridge loan process because it determines how quickly you can pay off the loan. Once your current home is sold, you can use the proceeds to pay off the bridge loan. What is the difference between a second mortgage and a bridge loan? A second mortgage is an ongoing loan secured against your existing property, while a bridge loan is a type of short-term loan designed specifically for buying and selling homes quickly. Bridge loans are typically used in real estate transactions where timing is essential. How do lenders determine the loan to value ratio for a bridge loan? Lenders determine the loan to value ratio for a bridge loan by assessing the value of your new property compared to the total amount of the loans you are taking on, including any existing mortgages. A higher ratio may result in higher interest rates or fees. Can I buy your new home without selling my current … [Read more...] about A Complete Guide to Property Investments for Beginners
How Does a Bridge Loan Work to Buy Your Next Home?
FAQ's How does a bridge loan work when buying and selling a home? A bridge loan works as short-term financing that allows you to buy your new home before the sale of your existing home is complete. This type of short-term loan provides the funds needed to buy your new home while you wait for your current home to sell. Can I use a bridge loan mortgage to cover my current home loan payments? Yes, you can use a bridge loan mortgage to cover your current mortgage payments if you need additional funds while waiting for the sale of your existing home. This allows you to manage two loans until your current home is sold. What happens if my current home does not sell before my bridge loan term ends? If your current home does not sell before the bridge loan term ends, you may need to refinance into a longer-term loan or consider other options to manage the ongoing loan. It’s important to plan for this possibility when considering a bridge loan. Are there any fees or other loan amounts associated with a bridge loan? Yes, there can be fees or other loan amounts associated with a bridge loan, such as closing costs and interest payments. It’s essential to understand these costs before entering into a bridge loan agreement. How can a home equity loan be used alongside a bridge loan? A home equity loan can be used alongside a bridge loan to provide additional funds for buying your new home. This combination allows you to leverage the equity in your existing property while securing short-term financing. What are the typical bridging loan interest rates compared to other loans? Bridging loan interest rates are generally higher compared to traditional home loans due to their short-term nature and quick approval process. It’s crucial to compare these rates with other types of home loans before deciding. How does the sale of your existing home affect the bridge loan process? The sale of your existing home is critical in the bridge loan process because it determines how quickly you can pay off the loan. Once your current home is sold, you can use the proceeds to pay off the bridge loan. What is the difference between a second mortgage and a bridge loan? A second mortgage is an ongoing loan secured against your existing property, while a bridge loan is a type of short-term loan designed specifically for buying and selling homes quickly. Bridge loans are typically used in real estate transactions where timing is essential. How do lenders determine the loan to value ratio for a bridge loan? Lenders determine the loan to value ratio for a bridge loan by assessing the value of your new property compared to the total amount of the loans you are taking on, including any existing mortgages. A higher ratio may result in higher interest rates or fees. Can I buy your new home without selling my current … [Read more...] about How Does a Bridge Loan Work to Buy Your Next Home?