By Cathy Howley

From Darwin to Dubbo, Brisbane to Broome, Australia has one of the highest levels of home ownership in the world. In spite of the recent surge in prices in every capital city, that great Aussie dream of owning your own patch of paradise is still what most of us aspire to. But if you’re smart and do some planning, there are clever ways to make buying your own home a little easier to do. Here are seven good tips to help you get the front door key faster.

1. Don’t be swayed by fabulous furniture and fresh flowers.

Many home sellers now use professional stylists to ensure their property looks the best at open for inspections. But look beyond the designer cushions and fresh flowers. Be practical. Do a pest and building inspection and check for major structural damage or signs of rot. And, don’t forget to ask yourself all those mundane questions – such as is there enough cupboard space in the kitchen or will your sofa fit through the front door?

2. Location first, property second.

Your first property may not be your dream home, but it can be a vital springboard towards that long term goal. The trick is to buy in a location where property values are growing at the same rate as the location you ultimately want to live in. This means compromising on the size or style of property. Buying a town house or a unit instead of a house, or a one bedroom instead of a two bedroom place.The important thing is that you’ll have a foothold in your dream location. When you’ve accumulated more equity through capital growth, you’ll be able to trade up to your dream home, too.

3. Small apartment blocks versus large.

The glamour of a big modern apartment block with outdoor pool, gym and on-site caretaker can certainly win over buyers. But here comes the crunch. You pay expensive body corporate fees every quarter and ongoing maintenance charges. Smaller blocks are usually older with fewer (if any) facilities, cost less to run and are often better maintained because of a higher level of owners versus renters. If you’re in the market for an apartment and see several places for the sale in the same block, chances are the fees are the reason why. Beware.

4. Save valuable time. Search online for the best loan

When it comes to finding a loan, it pays to do your homework. There’s a minefield of possibilities, offers, types of loans, variable and fixed rates. Compare what’s on offer with different banks (not just the big 4), mortgage brokers and boutique lenders. Some places may offer only one or two loan types, but lenders such as HSBC Australia have no less than 9 different loans to suit everyone’s lifestyle. Well worth checking out.

5. Don’t forget about fees – keep funds aside

Okay. You’ve been saving hard for a deposit and your loan has been approved. When you take the plunge a sign a contract of sale, there are all sorts of little (and not-so-little extras) added on. These include stamp duty, legal costs, disbursements, mortgage insurance, pest inspection report, survey report, builder’s report, loan application fee, valuation fee, registration fee and so on.

6. Another secret. Ask about “professional package” discounts

Banks are a lot more competitive nowadays and actively reward customer loyalty. If you’re earning a reasonably good salary, say more than $50,000 a year, or $80,000 or more with a partner, ask about the “professional packages”. The home loan interest rate you are offered is usually discounted by 0.5 per cent, which can really help. If you have a strong relationship with one lender and consolidate all your business with them, you can qualify for more discounts, savings account fee waivers and credit card annual fee waivers.

7. Forget that daily latte. Extra payments can reduce your interest faster

If you gave up buying your morning latte on the way to work, you can save over $700 a year! Put it towards your loan. Making extra repayments is one of the best ways to reduce the total interest paid and term of your loan. Some people even try making payments every fortnight – great if it works for you and your budget.

As a rule of thumb, every $1 in extra repayments you make early in the life of your loan saves around $2 in interest over the term of the loan, depending on the level of interest rates.

If you have spare cash from selling your car or a garage sale, think about making a one-off lump sum payment. Check first that your loan allows you to make additional repayments without a penalty.

Happy house hunting!

Share This

By Anne Fenwick

Build Your Holiday Home in Western Australia

Many people are now buying Holiday Homes or investment property abroad. Why not take a look at Western Australia; wherever you go in this country, you are never far away from miles and miles of golden sandy beaches, blue seas and beautiful weather.

In Australia, non resident can buy either newly built properties or building plots. The majority of the properties are usually in the suburbs of the cities, popular holiday resorts or large towns. If you wish to be a little more remote or individual you only have to buy a plot of land and build. This really is not a problem, plots are sold with all the services and there are plenty of builders, large or small just waiting to take you by the hand and build your dream holiday home for you.

Buying and building a property may sound daunting but it is not at all, the pain has been taken out of it; because a large proportion of Australian’s who live in WA build their own homes. This is mainly because they don’t want to live in the popular busy places on big housing estates or they prefer to have a house that is individual to their needs, also building land and builders are very available. WA is growing fast and there is getting to be a shortage of built properties so they buy a plot and build.

WA has grown over the last few years, as many people have moved from the high prices in the East; if you venture away from the cities you find that there are no newly built housing estates built by one builder but fields that have been sub-divided and sold off as individual plots with all the services and roads ready for you to connect too.

Finding either a single builder plus an architect to design your dream place and oversee the build or a large building company who will have a selection of plans for you to choose your holiday home from. Both will take you by the hand and build your property without problems, it is not the headache you may think it will be, as they have been building individual places for people for years and most of the problems have been ironed out.

It will take you about a year from buying the plot to completing your property and taking possession; this is certainly not as stressful as buying a shell and modernizing a property in a country were you don’t even speak the language.

Cost of plots have gone up over the last few years but you can still pick up very cheap plots if you are willing to go away from the tourist areas and nowhere is far from the beach.

In many areas of Western Australia it is like walking back in time but with all the mod cons of today and everyone is so very friendly. Perth is the jewel in the crown, with the Swan River winding its way through the beautiful city. Take a bus ride up to Kings Park and see the amazing panoramic view over the city of the river and the sea beyond, it is a spectacular view not to be missed. This city has so much to offer both the young and old with its many beaches, beautiful shops and restaurants with the old Port of Freemantle to discover nearby.

Travel through WA to the far north you will come to the wild remoteness of Broom, then journey back you can visit the coral reefs of Exmouth and the Dolphins at Sharks Bay. This country is so diverse that an hour’s train journey from Perth inland, you will find scrub and desert, where the first prospectors found and mined gold at Kalgooli, here is one of the largest open cast mines in the world, a spectacular sight where incredibly large dumper trucks look like tiny Dinky toys. Journey South from here you come to the wheat belt and the vineyards in the South and the country town of Albany. But better still go and take the journey yourself and discover the freedom it offers.

Share This

 by Gerry Marsh
Private Mortgage Insurance is a type of insurance that the lender requires when the mortgage loan balance is greater than 80% of the value of the property. It is like any other insurance in that there is a person who pays the premiums, that is you, and a beneficiary, which is the lender. Mortgage insurance is a type of guaranty that helps protect lenders against the cost of foreclosure. It’s important to understand that the primary and only real purpose for mortgage insurance is to protect your lender — not you. There is much confusion about this that I hope to clarify.

Mortgage Insurance Defined

“Mortgage Insurance” is a term used by two distinct groups to mean two entirely different things. To lenders, the term “mortgage insurance” means Private Mortgage Insurance, or PMI. Mortgage Guaranty Insurance Corporation (MGIC) originated PMI in the 1950s to assist in getting lender approval on an loans considered too risky to be otherwise acceptable. This helped borrows qualify for higher value homes or to qualify for the home they wanted by putting less money down.

Before PMI was available you needed to have 20 percent of the purchase price as a down payment – plus, of course, enough money for the other closing costs. This requirement kept many people from qualifying for a home loan. With the advent of Private Mortgage Insurance, the down payment requirement was reduced to 10 percent and later to only 5 percent. Lenders could safely loan the higher amounts because if the borrower defaulted the mortgage insurance would pay off the loan.

Mortgage insurance was the perfect answer to help stimulate the economy because it allowed people with good credit and good earnings to get into their dream home without having to wait until they accumulate a large amount of savings.

Lenders

Lenders usually consider any mortgage that has less than 20% down as being a “high risk” mortgage. Lenders usually require private mortgage insurance on low down payment loans for protection in the event that the homeowner fails to make his or her payments. Most lenders who use private mortgage insurance make their requests through a provision known as Direct Endorsement. This which authorizes them to consider applications without submitting paperwork to HUD.

The nation’s largest owners of home mortgages, Fannie Mae and Freddie Mac, instruct their lenders to cancel the insurance if a borrower has made payments on time, the loan has been in effect for at least 24 months, and the owner’s equity is at least 20%. Most lenders today permit you to cancel the PMI after a certain time has past. Borrowers should contact their loan servicer to find out the procedure for canceling mortgage insurance when they think they have achieved 20 percent equity.

Lenders have some leeway to refuse to cancel your PMI if you are not current on your payments, if there are liens against the property or if you have an exceptional amount of debt based on your income.

The Borrower

Borrowers can expect faster loan approval, less paperwork and more variety in premium plans when their lenders choose to buy private mortgage insurance. Home purchasers who cannot make a down payment of 20% today have three ways to go: traditional borrower-pay mortgage insurance; second or “piggyback” mortgages; and lender-pay mortgage insurance. Private mortgage insurance does not give you additional homeowners insurance coverage, but it does give the bank insurance just in case you do not fulfill your obligations by not paying your mortgage payments.

In Summary

Mortgage insurance is typically required for loans with less than 20% down payment using conventional financing. It is insurance that protects your lender against non-payment should you default on your loan. If the borrower dies, the loan is not paid off. Mortgage insurance only pays off the loan if the borrow defaults. Unlike Mortgage Life Insurance, you cannot name beneficiary – it is always the lender.
 

About the Author
Gerry Marsh is a successful webmaster and on-line publisher in the fields of real estate and financial services. More information on mortgage insurance, as well as other types of insurance can be obtained from the Best Insurance Portal one of the authors’ financial websites.

Share This

By Lou Lynch

In today’s world of instant messaging and global marketing, it’s often real estate agents who get to try new technology first. Real estate agents work with everyone of a certain income level and savings, which makes their industry a fertile market for new products. Real estate is also a good starting point for developers who want to learn more about how their technology will be used. For example, most online mapping applications launched in recent years have been created with real estate in mind – whether it’s finding an innovative approach to display home for sale listings, or creating realistic 3-D renderings of buildings, these new tools go the extra mile to make agents and their clients happy.

Real estate professionals who don’t make use of the latest technologies might be missing a big opportunity to expand their business. Every new product targeted at real estate represents a chance for brokers and agents to tap into a new market, and improve relations with their existing clients. And for those agents who still aren’t informed about basic Internet and email strategies, now’s the time to learn.

The best part about becoming a tech-savvy real estate agent is how easy it can be. If you’re well-versed in real estate law, how to properly list and negotiate a home sale, and what makes the local market tick, you’ve already done the hard part. Becoming tech-savvy is simply the process of taking your years of experience and knowledge and plugging it into a new system. Technology developers don’t expect real estate agents to know how to program software or even know html – all you have to do is stay current on what’s out there.

The best real estate news sites provide regular features on new technology. Here you can learn about the latest tools available, like database-driven real estate evaluation tools, and voice recognition software allowing agents to update the local MLS from their phone. Many real estate blogs also offer daily tech news, while real estate forums provide a place to discuss and learn more about technology trends.

If you’re an agent or broker with a successful website, staying informed on new technology can help boost your web presence. You’ll learn how to drive up traffic to your site through search engine optimization and new software, and how to protect your web presence from competition and copyright infringement. Many online agents and brokers use duplicate content detection software to keep their sites unique.

Real estate and technology have always fed off one another, but the relationship has become especially apparent in recent years. As developers continue to target the real estate market, many agents and brokers are doing away with old marketing strategies, like telemarketing, cold calling, and door knocking. New strategies for tech savvy real estate pros are being created every day.

Share This

By Raynor James

There are certain pillars in the real estate world that we have all come to know and rely upon. The question, however, is where did those pillars come from. For instance, how did 20 percent come to be the magic down payment number?

In the world of real estate, home buyers know or should know that a 20 percent down payment is a magic number. Why? Well, the payment of such a figure accomplishes two things. First, it lets you avoid the payment of private mortgage insurance. Second, it makes lenders view you with a more lenient eye. If you can manage to bust it up to 25 percent, they will practically throw money at you!

Still, one has to question where the figure of 20 percent came from. After all, why isn’t the magic number 15 or 25 percent? At the end of the day, it is a number based on history and experience.

Lenders are always looking at borrowers with a critical eye. They are sizing up your average borrower as a risk. If they lend you money, what is the risk that you will default on the loan and leave them holding the real estate in question? As you can imagine, there are plenty of factors that go into the analysis. Certain factors can be very important to one lender and less so with another. The one factor that makes all lenders pay attention, however, is the down payment.

At its heart, the 20 percent down payment is a tipping point on risk. Lenders have determined over the years and after a few painful experiences, that borrowers who put down 20 percent of the purchase price of a home are far less likely to default than those that put down less money. This should hardly be surprising news. On a $300,000 home, a 20 percent down payment equates to $60,000. It is the rare bird that will walk away from this amount without making a major effort to fix whatever financial problems arise.

At the end of the day, the 20 percent down payment is a tipping point on the teeter totter of risk. If you can raise this amount of money for your home purchase, a lender is less likely to balk at credit issues and so on. The lender will view you more as a partner in the process instead of a potential defaulter, and that is an invaluable position to be in. Saving up 20 percent for a down payment is not easy, but it is well worth doing if you can.

Share This