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Archives for June 2015

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Investor

First time property investors :: you are not alone – ask for help

Property investment is one of the most popular ways in which Australians choose to grow their wealth.

The combination of a passive rental income with growing equity in an appreciating asset is certainly an attractive one, particularly as with property investment loans you can purchase a piece of investment real estate at comparatively high leverage.

For first time investors however, it may be daunting to take the first step and enter the arena. How do you know where to start and how to proceed?

Get to know your market conditions

Investment real estate is a market and it has its ups and downs. Unless you are a property guru it can be hard to accurately predict the exact movements of such a complex set of relationships.

Yet that doesn’t mean you can’t make educated guesses, and the quality of those guesses will depend on how much you educate yourself about current market conditions.

There are lots of different statistics which can help you form a picture of the market and influence where and when may be best to buy.

Housing market activity can be gauged by looking at auction clearance rates, loan commitments and housing starts which is an economic indicator that reflects the number of privately owned new houses on which construction has been started in a given period.

Similarly, an overview of current rental activity can be gained by studying vacancy rates, median rent prices and investment loan commitments.

Learn how to get maximum benefit

If you don’t know what negative gearing is, we can refer you to some expert advice.

Property taxes and other legislative requirements are not the same for investors as they are for people buying property to live in themselves.

That means you will have different obligations, but also different opportunities – so be sure to clue yourself up.

Talk to an investment loan expert

At Power Financial Solutions we can structure a personalised investment finance deal which gives you the

funds you need to start your property portfolio.

We can also provide you to someone for helpful tax advice for investors and talk you through the insurance covers you will require as the new owner of an investment property.

Power Financial Solutions has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further.

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First Home Buyer

First home buyer? Don’t know what to do first?

A good place to start is by getting your head around the various costs associated with buying a property and applying for your first home loan.  When it comes to budgeting to buy a home, the process can feel daunting – especially if you are a first-time buyer.

A good place to start is by getting your head around the various costs associated with buying a property and applying for your first home loan.

While these can vary from state to state, getting a rough estimate together will help you determine how much you will need to borrow – and what kind of a deposit you will require to do so.

Lenders’ fees and stamp duty

A mortgage lender may charge you a fee to value your property and process your loan application. Together, these fees may reach into the region of $1,000, so it is important to be prepared.

You should also be ready for stamp duty, which is calculated on your property as well as the size of your mortgage. Property stamp duty and mortgage stamp duty can vary from state to state – and in many states, there are concessions for first-time buyers who meet specific criteria – so it is important to do your research and ask plenty of questions.

Mortgage insurance

Lenders’ mortgage insurance is a one-off fee that is designed to offer your lender protection in the event that you are unable to repay your loan.

This type of financial product is generally a requirement anytime you borrow against more than 80 per cent of the value of your property. The amount you will need to pay is calculated on a sliding scale and will depend on a number of factors, including your loan-to-value ratio.

Taxes and fees

In addition to the value of your property, the amount of money you have already saved towards a deposit and the fees listed above, there are a number of other important charges you will want to bear in mind.

These include the fees for services carried out by solicitors and conveyancers and will depend on a number of factors, including the amount of work that was done and the amount of time it took.

You will also need to budget for the costs of inspection reports as they are required, as well as any fees associated with enlisting a removalist service on moving day.

Power Financial Solutions has a great range of mortgage calculators to help with all those tough decisions that come with finding the right loan. Have a look at our calculators on our website to help you further.

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Broker News

It seems the banks are now responding to APRA’s guidance in relation to current investor lending. NAB Broker has made changes from June advising interest rates on some products are increasing and that the LVR will be at 90%.  Looks like the 100% investment loans are on the back burner for awhile.  We will just wait and see what effect this has on the investment property market.

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