If you are an active online shopper, you will have undoubtedly seen the introduction of ‘Buy now Pay Later’ platforms such as AfterPay and Zip Pay. During the period of 2015 and 2018, such providers saw a steep growth of interest with the number of users increasing from 400,000 in 2015 to 2 million in 2018! If you are a looking to purchase your first home, the ‘Buy Now, Pay Later’, instant gratification shopping, will come at a cost, potentially that of buying your first home. If you are a shopper that has not tried the ‘Buy Now, Pay Later’ experience, it is a system that allows the consumer to buy an item of clothing, for example, even if you do not have the cash in the bank. The provider, such as Zip Pay or Afterpay, will pay the merchant on behalf of the consumer, allowing the consumer to receive their new item of clothing immediately. As the consumer, you are then required to pay off the debt to the provider in a number of instalments. Shoppers be warned!! This particular method of shopping could risk your ability to buy your first home. How? Well If you manage your money… [Read More]
When people think of buying an investment property, many only think about buying in their local area. Investing in a property interstate may be a smarter idea, potentially resulting in a better return on your investment. it may also be a potential way to snaffle a bargain. You could be buying into an area with greater potential capital growth compared to your home state – as well as being more affordable for the budget. Many first home buyers have chosen to rent in the area that they want to live in and purchase an investment property elsewhere, just so they can get in the property market. There are some the key issues to keep in mind before you buy: The logistics of property management Some may find it hard to manage their investment property from another state. It can be costly maintaining a property and finding tenants if you regularly need to travel between states. Although employing a property management service may be able to help here. Property managers undertake several jobs that can be difficult for an interstate investor to do. They can screen your potential tenants, source local tradespeople for repairs and, by inspecting the property on your… [Read More]
Did you know you can get an equity release on your existing home loan to renovate? An equity release or a top up loan is an additional loan on top of your current mortgage. The amount you can release will depend on how much you currently have owing on your home loan and the value of your property. Typically, lenders will allow you to access up to 80 per cent of this equity and use it as a source of credit on your mortgage. Do I qualify for an equity release? The ability to release equity from your existing home loan will depend on a number of factors: Do you currently have equity available? Lenders will generally allow you to borrow up to 80% of the value of your property: Purpose of the equity release: There are many reasons that a lender will allow for equity release, in particular to renovate your home Loan term: Your mortgage must be at least 6 months old. Your current financial position: You will require good mortgage repayment history and have a good income compared to your level of debt. Benefits of equity release: Review of your existing home loan to ensure it currently suits your situation…. [Read More]
Location, Location, Location What are the local amenities that you might need? Shops Schools Public Transport Entertainment Are there any infrastructure changes or other council changes planned? How long will it take for you to commute to and from work Outside the Property Is there off-street parking? Is the building structurally sound? Consider a building inspection to ensure stability What is the condition of the external building? The paintwork, garden, roof and guttering? Is the area noisy? Consider inspecting the property at different times of the day. Are there any building restrictions? Inside the property How many bedrooms and bathrooms are there? Is there room for an expanding family? Are there any concerns about the wiring or plumbing? A building inspection will help to determine any faults Do all the windows open? Is there enough storage space? Is the Kitchen in good condition? Are all included appliances in working order?
Budget Cut back on the extras, look at the whole year of bills, not just a month. Not sure how much you spend? Have a look at your recent bank statement. Spending more than you are earning? Printing out a budget will help you to understand how you spend and where you can make some cut backs. The MoneySmart website has tools to help you budget: https://www.moneysmart.gov.au/managing-your-money/budgeting/how-to-do-a-budget Have a dedicated savings account Look for a high interest rate savings account. Automate payments on pay day into this savings account. Out of sight, out of mind. This may help you to save more quickly. Reduce your debts Credit cards and other credit facilities attract high interest rates. Credit cards including facilities such as afterpay can affect your borrowing capacity. Reducing your credit card facility to the minimum you need, or cancel the card completely, can help to increase your borrowing capacity when you buy your new home. Make use of Government Grants Stamp duty exemption and concessions on established homes, exemption for properties valued up to $600,000 and concession for properties $601,000-$750,000 First home buyer grants; buying or building a new home you may be eligible for $10,000 owner occupied property… [Read More]