One of the great things about constructing your own home is that it can be tailored to your specifications. If you’re interested in building rather than buying your dream home, here’s the process you need to follow:Speak to your broker about your goals, so you can create a finance plan togetherBuy the landDesign your homeFind a reputable builderObtain building permits and approvalsBuild the homeWith a traditional home loan, you receive the money in one lump sum; but with a construction loan, you receive the money in five stages throughout the project. You pay interest-only on the portion of the funds you've received to date, rather than the whole loan; and at the end of the build, your loan reverts to a traditional principal-and-interest mortgage.It’s worth noting that the rate of annual growth in house-building costs increased from 3.9% in September 2023 to 4.3% in June 2024, according to the Australian Bureau of Statistics.Given that costs will likely continue to rise, the sooner you build, the cheaper it could be in the long term. If this is something you’re thinking about doing, you should explore your options soon.Get in touch if you need a construction loan.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 How to build your dream house
Mortgage activity rising, as borrowers commit to $29bn of home loans
The latest home loans data from the Australian Bureau of Statistics has revealed three key trends.Borrowing is rising strongly. The total value of home loan commitments in June reached $29.19 billion, which was 1.3% higher than the previous month and 19.1% higher than the previous year. Investor activity is incredibly strong right now. While the volume of owner-occupied loans rose 13.2% year-on-year to $18.17 billion, investment loans jumped 30.2% to $11.02 billion. While refinancing activity remains quite high, it's well below the record levels of mid-2023. Borrowers refinanced $15.79 billion of loans in June, which was 20.9% lower than the year before. Contact me if you’re thinking about buying a property. I can get you a home loan pre-approval and, if you’re interested, introduce you to a good buyer’s agent.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 Mortgage activity rising, as borrowers commit to $29bn of home loans
Why banks assess your home loan re-payment capacity at higher interest rates
When you apply for a mortgage, the lender uses a series of criteria to assess how likely you’d be to repay the loan. As part of this process, the lender also considers whether you’d be able to continue making your repayments if interest rates were to rise.Generally, lenders will apply a buffer of at least 3.00 percentage points – so if you applied for a loan with an interest rate of 6.50%, this would mean calculating whether you’d be able to make repayments at 9.50%.This ‘mortgage serviceability buffer’, as it’s known, is mandated by APRA, Australia’s banking regulator.Partly, it’s designed to prevent lenders from issuing risky loans; because if a large number of borrowers defaulted on their loans, that would undermine the banking system. And, partly, it’s designed to protect borrowers from taking on loans they might not be able to afford.The serviceability buffer can make it harder for borrowers to qualify for loans, but is ultimately designed to be in their best interests.Talk to me about your borrowingHit 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 banks assess your home loan re-payment capacity at higher interest rates
Rents expected to keep growing, but at slower pace
Property investors have enjoyed a golden run over the past five years, during which the national median rent increased 39.7%. However, in July, rents increased just 0.1%, which was the slowest growth since 2020, according to CoreLogic.At the same time, annual rental growth has been trending down over the past few months.Between February and July, rental growth fell from 9.7% to 8.0% in the combined capitals, although it rose from 5.4% to 7.1% in the combined regions. The big cities appear to be close to their rental affordability limit, while the regions, which have had less rental growth, might have more capacity to absorb higher rents. Despite the slowdown of the national rental market, CoreLogic economist Kaitlyn Ezzy said rents were likely to keep increasing.“Low supply will likely continue to put upward pressure on rents, albeit at a slower pace,” she said.“With dwelling approvals and commencements at historic lows, providing sufficient new housing will not be a quick fix and remains a genuine challenge for policymakers, the property industry and, of course, tenants.”In other words, while rents are likely to keep rising, tenants are likely to get some relief and investors shouldn’t budget for the double-digit-percentage increases of previous years.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 Rents expected to keep growing, but at slower pace
Property investors very active in the market
Home loan volumes have significantly increased over the past year, especially among investors. Investors committed to $10.67 billion of mortgages in May, according to the latest data from the Australian Bureau of Statistics. That was 29.5% higher than the year before. At the same time, owner-occupier borrowing activity rose 12.2%, to $18.13 billion. Investors were responsible for 37.1% of the home loans that were issued in May. Despite the surge, that's only slightly higher than the long-term average (in records dating back to 2002) of 35.9%. By way of comparison, investors' share of home loan activity bottomed out at 22.4% in 2021 and peaked at 45.9% in 2015, while owner-occupiers’ share reached a low of 54.1% in 2015 and a high of 77.6% in 2021. If you’re thinking about applying for a home loan, here are three important tips to make yourself more creditworthy in the eyes of lenders:Reduce your spending, to free up money to pay off a loan Pay all your bills on time, to maintain a good credit score Contact a broker, who will compare the market for youNeed 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 Property investors very active in the market
New vendor data shows interesting sales trends
Record property prices are proving to be good news for vendors, with 94.3% of all vendors in the March quarter selling their home for more than they'd originally paid, according to CoreLogic. That was the fourth consecutive quarterly increase and the highest share since 2010. However, the share of vendors who made a gross profit varied significantly from capital city to city, reflecting different market performance. Another significant finding was that house owners were more likely to record a profit than unit owners, by a share of 97.1% to 89.0%. Also, there was a clear link between the amount of time someone had owned a home and the size of their profit. Vendors made a median profit of $82,000 with a hold period of up to two years, $275,000 for up to 10 years, $435,000 for up to 20 years and $780,000 for up to 30 years. 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 New vendor data shows interesting sales trends
Investment Loans: How Much Can I Borrow For Investment Property?
If you are thinking about buying an investment property, you might wonder, "How much can I borrow for investment property?" This is an important question because it helps you understand your options and plan your finances. Knowing the amount you can borrow will guide you in finding the right property that fits your budget and investment goals.Investment loans can vary based on several factors, such as your income, credit score, and the value of the property you want to buy. It’s essential to do your research and speak with a mortgage broker to get a clear picture of your borrowing potential. In this blog, we will explore the key factors that affect how much you can borrow and what you need to consider when looking for an investment loan. How Much Can I Borrow For An Investment Property? When you ask, "how much can I borrow for an investment property," the answer depends on several factors. Lenders look at your income, credit score, and existing debts. They want to know if you can repay the loan. A higher income and a good credit score usually mean you can borrow more money. Lenders also consider the type of property you want to buy. A single-family home may allow you to borrow more than a multi-family property or a fixer-upper.Another important factor is your down payment. Most lenders require you to pay a portion of the property’s price upfront. This amount can vary, but it is often around 20% for investment properties. If you can save a larger down payment, you may be able to borrow more. A bigger down payment also lowers your monthly payments and interest rates, making it easier to manage your finances.To find out exactly how much you can borrow, consider getting pre-approved for a loan. This process involves a lender reviewing your financial situation. They will give you a specific amount that you can borrow based on your details. Knowing this nu mber can help you focus on properties within your budget. It also shows sellers that you are a serious buyer, making your offers more attractive. How Much Can I Borrow For An Investment Property: 5 Things Banks Look At When Assessing Borrowing Power When considering how much you can borrow for an investment property, banks look at several key factors. Understanding these factors can help you prepare your finances and improve your chances of getting approved for a loan. Here are five important things banks assess when determining your borrowing power.First, banks evaluate your financial position. They will look closely at your income, expenses, and any existing debts. A strong financial position shows that you can handle the repayments on an investment property loan. If you have a steady job and a good income, it increases your chances of borrowing more. Additionally, having a low debt-to-income ratio is favourable. This means you have more income available to cover new debt.Second, banks consider the deposit you can provide. Typically, you will need to … [Read more...] about Investment Loans: How Much Can I Borrow For Investment Property?
Home Loan Repayment Calculator: A Comprehensive Guide on Repayments on 300k Mortgage
Buying a home is a big step, and understanding your mortgage is important. One of the best tools to help you is a home loan repayment calculator. This tool can show you how much you will pay each month for repayments on 300k mortgage. Knowing these numbers can help you plan your budget and make smart financial choices.In this comprehensive guide, we will explain how to use a home loan repayment calculator. We will also discuss different factors that affect your repayments on a 300k mortgage, such as interest rates and loan terms. By the end of this guide, you will have a clear understanding of what to expect and how to manage your mortgage payments effectively. How Much Deposit Do You Need For A $300,000 Mortgage? To buy a home worth $300,000, the amount you need for a down payment can vary. If you choose a traditional option of 20%, you would need to pay $60,000 upfront. This larger down payment can help you avoid private mortgage insurance (PMI) and may lead to better interest rates. However, there are also options for lower down payments. For example, with an FHA loan, you can put down as little as 3.5%, which would be $10,500 for a $300,000 house. Some conventional loans allow for even lower down payments of 3%, meaning you would need only $9,000 to start.When considering how much deposit you need, it's also essential to think about your monthly repayments on a $300k mortgage. If you put down 20%, your monthly payments will be lower compared to a smaller down payment. For instance, with a 20% down payment and a 6% interest rate, your monthly payment could be around $1,816. If you only put down 5%, your monthly payment might rise to approximately $2,440, including PMI. This shows how a larger deposit can significantly affect your monthly financial commitment.In addition to the down payment, you should consider other costs associated with buying a home. These include property taxes, homeowners insurance, and maintenance fees. All these expenses can add up, so it's wise to budget for them when planning to purchase a $300,000 home. Understanding these factors will help you make informed decisions about how much you can afford to pay upfront and what your ongoing costs will be. How to Use A Home Loan Repayment Calculator A home loan repayment calculator is a useful tool that helps you estimate your monthly payments and the total interest you'll pay over the life of your loan. Here's how to use one:When using a home loan repayment calculator, you'll need to enter your loan details, such as the loan amount, interest rate, and loan term. For example, if you have a 300k mortgage, you would enter "300,000" as the loan amount.The loan term is the number of years you have to repay the loan. Most home loans have terms of 15 or 30 years. The longer the term, the lower your monthly payments will be, but you'll pay more interest over the life of the loan.Home loan repayment calculators typically offer different … [Read more...] about Home Loan Repayment Calculator: A Comprehensive Guide on Repayments on 300k Mortgage