Finding the Perfect Fit


Home loans come in many shapes and sizes. But how do you know which type of loan is right for you, including which represents the best value for money? Below we have listed a few common loan options.

BASIC HOME LOAN PACKAGE
These are your standard ‘no frills’ mortgages. They generally offer low interest rates and low ongoing fees – perfect for the first time buyer.

If you are looking for a loan that boasts a range of extras, this is not the one for you. A basic home loan package offers less flexibility, few features and can restrict the borrower from making additional repayments.

STANDARD VARIABLE RATE HOME LOANS
These loans offer something for nearly everyone.

While they will have a higher interest rate than a basic home loan package, standard variable rate mortgages offer greater flexibility, plus a raft of optional extras, including split loan features and redraw facilities.

But remember, rates go up as well as down. Your repayments may change with any interest rate adjustments, like last week’s rate cut.

FIXED RATE HOME LOANS
If you’re looking for certainty in your mortgage repayments, then a fixed rate home loan is probably right for you. The main goal is to lock in the cheapest rate possible, so timing is everything. Be sure to shop around and keep a keen eye on interest rate movements.

This type of loan offers very few features and little flexibility. In fact, borrowers can expect hefty fines for breaking the loan term.

INTEREST ONLY (THE ‘INVESTOR LOAN’)
Low repayments make this loan a favourite with investors. As the name suggests, interest-only loans focus solely on the interest component of the loan, keeping repayments low during its life.

These loans tend to have a shorter term – of two to five years – with the principal paid in full at the end of this period.

LINE OF CREDIT
If you’re looking for a loan that gives you considerable flexibility with your repayments and the ability to draw down additional funds, you might want to consider a line of credit.

Each month, borrowers can pay as little or as much as they want towards the principal – as long as they meet their interest repayments.

As a line of credit borrower, your loan is usually linked with a credit card with an interest-free period. This allows borrowers to access funds if and when they need. However, you need to be disciplined with your finances or you may end up adding years to your loan.

LO-DOC LOANS
Perfect for self-employed professionals, lo-doc loans provide finance for borrowers unable to provide the documentation usually needed.

Most lenders require lo-doc borrowers to take out lender’s mortgage insurance for loans of up to 80 per cent of the property’s value. These loans may well also carry a higher interest rate than that of the basic home loan.

As you can see, choosing the right home loan can be a challenge – but that’s where we come in.

We have access to thousands of home loan products and can tailor a loan to your own personal goals and objectives, helping you achieve your property dreams earlier.

 
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What does your ideal tenant look like?


In today’s market, finding a tenant isn’t an issue; finding the perfect tenant, however, is a different story.

With vacancy rates relatively tight across most markets, landlords are spoilt for choice when it comes to selecting a tenant.

But while choice is certainly an advantage for property investors, too much of a good thing tends to foster a range of problems, including some associated with finding the right tenant in an overcrowded market.

That said, finding that perfect tenant should be high on the priority list of all investors. The goal is to find a tenant who not only takes care of your property but makes rental repayments on time and causes minimal stress or concern for you, the landlord.

Good tenants are an essential ingredient of a sound property investment, so how should landlords go about attracting them?

There are effectively two options: The first is to engage a professional to manage the property on your behalf – and that service includes finding suitable tenants.

Hiring a professional property manager can often be a smart move, but their services do come at a cost – usually around 7.5 per cent of the rental value.

If you do engage a professional real estate or property management agent, they will not only find and screen suitable tenants, they will also manage your property on your behalf, which includes rental collection, maintenance and tenant liaison.

Alternatively, if you decide that you have the time to manage your own investment, you’ll need to find your own tenants.

It’s important that you advertise in the most effective media channels and use the right messages to attract the type of tenant you are seeking.

For example, for a suburban property, families are more likely to be your target market so local papers are usually a good vehicle for reaching them. If your investment property is in the inner city, your target market may well be students or singles – with whom you can connect online.

When selecting a tenant you’ll need to be rigorous with your reference and rental history checks as well as with determining their employment status and current family situation.

If you’re unsure about how to find an agency to manage your property, or to discuss how the quality of your tenants may impact your mortgage, please feel free to get in touch.

 
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Saving on stamp duty


While several state governments have reduced stamp duty concessions, there are still some great savings on offer for home buyers who know where to look.

Looking to enter the property market in the near future? Here’s one cost you may have completely overlooked when crunching the numbers; the state-imposed tax known as stamp duty.

When taking the plunge, home buyers can be left feeling blindsided by the significant cost of stamp duty.

The tax is calculated based on the value of the property being transferred, and as you can imagine these costs can be quite significant. For example, a $550,000 house in NSW would involve a stamp duty charge of around $20,500.

So what can you do to avoid these nasty fees? Unfortunately, the answer is not a whole lot. But if you are entering the market for the first time, there are several government incentives or concessions you may be eligible to receive.

Stamp duty concessions and incentives vary greatly from state to state – as does the tax itself –with some state’s incentives more generous than others.

In Western Australia, for instance, stamp duty concessions are available for all home buyers eligible for the WA First Home Owner Grant. Known as the First Home Owner Rate of Duty, concessions apply to house and land packages valued up to $600,000, or to $400,000 for vacant land.

Better yet, eligible home buyers are not required to pay any stamp duty on their purchase of properties valued up $500,000 or land valued up to $300,000.

Similar incentives are available in New South Wales under the First Home Plus Scheme.

This scheme waives stamp duty for all eligible home buyers purchasing a property valued up to $500,000 and provides concessions for homes valued between $500,000 and $600,000.

In recent years, several states have dramatically decreased the incentives on offer. Complete exemptions have been replaced by lump sum rebates or percentage discounts.

For instance, in Queensland, home buyers looking to purchase a property valued at under $505,000 will receive a deduction of $8,750.

As the value of the home increases, the incentives on offer decrease. For properties valued at $550,000 or more, there are no cash incentives at all.

As you can see, stamp duty concessions and incentives can be rather confusing. Thankfully, we can help!

Make sure you get what you’re entitled to and give us a call today.

 
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Wine review

Wither Hills Wairau Valley Pinot Noir 2010

Wither Hills' two Pinot Noir vineyards, Benmorven and Taylor River, are strategically sited in the lea of the southern landmark range of the Wairau Valley - the Wither Hills. Each vineyard site was hand harvested at optimum flavour ripeness, and you’d have to say the 2010 vintage is an absolute cracker!

Termed “The Best $20 New Zealand Pinot” by the WineStar Journal, this well-structured Pinot has a delightful core and outstanding potential to develop impressive complexity.

Bright and floral with lots of red cherry and plum fruit aromas, it’s an appealing Pinot with a touch of tannin giving support to the ripe plump flavours. Great drinking now.



Rating : 3.5 stars
RRP : $20.00

 

App review

MoneyBook

If you've been on the hunt for a feature-packed budgeting app then look no further than MoneyBook. It's simple in nature, but looking a little deeper you'll find a number of unexpected surprises. Entering a new transaction is a breeze, with flexible options for adding notes or affixing a specific category to individual transactions.

MoneyBook has options to export your finances and also lets you password protect sensitive items you don't want others to see. Graphs are a little limited, but MoneyBook also comes with a free cloud backup service in case you lose your iPhone or just want to make sure your important transactions are stored somewhere other than on the device itself.



RRP : $2.99
Available on :  iPhone, iPod touch, and iPad. Requires iOS 5.0 or later. Optimized for iPhone5

 
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Contact us

 
 

 

 

 

 

 

Great Aussie Dream

T 1300 72 68 48
F 02 4733 4115
E info@gad.com.au

www.greataussiedream.com.au

Australian Credit Licence Number: 387787 | ABN: 84129326352

 

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