background preloader

What to Consider when Buying a Second Property

What to Consider when Buying a Second Property
Buying your own home remains the great Australian dream – and purchasing a second property may help you take your wealth further. Whether you’re building your property investment portfolio, buying a holiday house, upgrading or supporting a family member, there are plenty of things to think about before you take that all important next step. Consider your cashflow Property tends to be a long-term investment, so do your sums to make sure you can afford the ongoing repayments on two mortgages. Also think about any major life changes on the horizon – for example, you may be planning to expand your family, or you might need to support a parent in the coming years. Get to know the market and location Research what’s happening in the current market, and whether it’s the right time for you to invest in a second property. Investigate before you invest in a second property If you’re buying a property as an investment, carefully consider its location. Choose the right mortgage Like this: Like Loading...

http://www.oceanhomeloans.com.au/what-to-consider-when-buying-a-second-property/

Related:  Mortgage Loansdesiryfennedawsonmillie43sveinunglord11

3 Questions to Ask Before you Refinance your Home Loan The home loan market is constantly changing, with new and attractive deals coming up all the time. Refinancing can help you secure a more competitive interest rate, access the equity in your home, add features (such as an offset account) or consolidate your debts, but there are some important questions to consider before you get the ball rolling. Has my financial situation changed? untitled The start of a new year is a great time to review your finances. Engaging a mortgage broker now will give you a window of time to figure out what processes and practices you can improve upon. Do you need advice on your home loan?

How to Choose a Home Loan Term Some people pay off their home loan in record time, while others take 30 years. Which is better? Deciding on the length of your mortgage term is an important decision because it can significantly affect the amount of interest you pay, as well as have implications for equity and cash flow. With a shorter-term loan you’ll build equity more quickly, which gives you the opportunity to generate a larger profit when you sell. With a longer home loan term you will pay significantly more interest over the life of the loan, but on the flip side, there is more flexibility and less financial risk. For example, a 15 year loan of $430,000 at 4% interest, will cost you $142,518 in total interest paid and $3,181 in monthly repayments.

No move on Interest Rates again The final meeting of the Reserve Bank for 2015 produced no surprises as the Board made the decision to keep interest rates on hold. The official cash rate continues to stand at an all time low of 2%. Looking back on the past year, it’s been nothing but good news for the Australian housing market. Now that the traditional ‘spring fever’ has transitioned into the more languid days of summer, we can reflect on an extraordinary year. With one cut of 0.25% to interest rates and seven months of no change, homeowners have managed a sigh of relief, with many choosing to put extra payment towards their mortgage. In fact, Citibank’s head of banking solutions and wealth management, Dierdre Wroth, said early this year that more Australians are taking advantage of low interest rates by culling their debt “They either accumulate cash or they start to de-leverage their debt.

What you Need to Know about Home Loan Refinancing A home loan is generally a long-term proposition, but in some situations it can make sense to refinance your mortgage. Read this guide to the home loan refinancing process, and speak to your broker, before deciding whether it’s right for you. Refinancing involves taking out a new mortgage and using those funds to pay off your existing mortgage. Doing so can save money and result in significant financial gains over time, here are some of the reasons why you might refinance. Housing Affordability, what’s our new PM’s stance? On 15 September 2015 Malcolm Turnbull was sworn in as Prime Minister, signalling a new era for the Liberal leadership and this may lead to a different approach to the issue of housing affordability. There could also be a fundamental shift in the way the government addresses economic issues, with the Turnbull government set to be “a thoroughly Liberal government committed to freedom, the individual and the market.” At the heart of Turnbull’s economic ethos is the concept of a ‘free market’, encouraging competition wherever possible. Despite low interest rates, the rate of home ownership for those under 65 is declining, along with wages growth.

What is home loan portability? If you are moving house, home loan portability gives you the option to take your current loan with you. By keeping your loan from one property to the next, you won’t have to go through the process of refinancing and you can save on establishment costs like application and valuation fees, government charges and potential exit fees (banned on loans taken out after 1 July 2011). If you have a fixed rate home loan, then loan portability could save you the significant break costs that may be charged for altering your loan before the full term. It also entitles you to retain existing facilities like your ATM card, Offset account and cheque book. Some mortgages include portability and others provide it as an option. Often there are restrictions in place that determine in what circumstance portability can be used.

How will the changes to investment loans affect you? The importance of a knowledgeable mortgage broker has come sharply into focus following the recent banking system changes to investment loans. Many panicked borrowers have turned to mortgage brokers like us, for guidance in the months since the Australian Prudential Regulatory Authority (APRA) directed the major banks to place limits on investment lending and hold more funds in capital reserves. With each bank responding individually to the directive, the changes in policy and pricing have varied wildly from one lender to the next. There has been confusion among borrowers and concern about how current and future investment lending is affected. Investment loans affected by the APRA changes If you fall into any of the below categories, you may well be affected by some of the changes.

Finding a home loan when you’re self-employed There are many perks to working for yourself, but when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders. Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contractor, entrepreneur, tradesperson or freelancer. Yet by being proactive and accessing specialist advice, self-employed applicants can also enjoy a successful and hassle-free road to securing a mortgage. Try these top tips for starters. Mortgage Brokers more popular than ever Mortgage brokers are now responsible for writing over half of Australia’s home loans and are valued for their choice, expertise and convenience, according to a new survey commissioned by the Mortgage and Finance Association of Australia (MFAA). From a 49.9 per cent share of the market in the March 2014 quarter, total new home lending to mortgage brokers increased to 51.9 per cent in the March 2015 quarter. Over this time there was a $44.2 billion increase in mortgage lending across Australia and brokers were responsible for 71 per cent of this increase, Australian Bureau of Statistics data reveals. Brokers were also found to be proficient at matching the right product to customer’s needs. In fact 30.2 per cent of broker initiated home loans went to smaller lenders, demonstrating that brokers offer consumers real choice and have access to a wider range of mortgage products than banks or other financial organisations. Investors look to Mortgage Brokers

Related: