Corry Cincotta - Mortgage Broker in Bayswater

Your Perfect Match - How to find a loan that keeps you warm at night.

Do you find that you're usually attracted to the same type of person? We all have a mental image of our perfect mate - some people are even lucky enough to wake up next to that person each day.

Just as the dating market can be tricky to navigate, it's easy to miss the signs and find yourself attracted to the wrong home loan.

To help you find a loan that loves you unconditionally, here is a quick run-down of the different types available.

Basic Loan

The basic home loan usually doesn't have a lot of fees. What you see is what you get. Usually you get a low interest rate, but you don't get much else. If you want some features, and flexibility this might not be the match made in heaven.

Introductory Rate loan

Otherwise known as a 'Honeymoon loan' this one is a bit like some new relationships. You get a really good deal at the beginning, and everyone is happy. After a year or two the honeymoon is over, and you find out what the loan will really cost you.

A good option if you want to keep your repayments down in the beginning - but make sure you investigate the interest rate that you will be charged after the introductory period.

Standard Variable rate loan

For those who want to be able to pick and choose their features, the standard variable rate loan could be your perfect mate. You generally get a low interest rate, but the flexibility to select some options that suit your needs.

Low-doc Loan

A low-doc loan is a good alternative for Self-Employed borrowers who are often unlucky in love when it comes to finding their ideal mortgage.

Low-doc loans allow you to use different methods of proving your income. The rules are usually a little less restrictive - but you will pay a much higher rate.

On top of this - most lenders require self-employed borrowers to contribute a 20% deposit, and cover all upfront costs such as Stamp Duty and Lenders Mortgage Insurance (LMI). This is a good option for people who don't have any other options.

100% home loan

Also known as a 'No-deposit' loan, this one allows you to borrow 100% of the purchase price. Don't be fooled though - this is not a free ride.

Most lender still require you to save a 3% deposit to cover the LMI, and you'll also need to make sure that you have enough left over to cover stamp duty, moving costs and conveyancing - and any other associated costs.

Sometimes these loans are available, sometimes they are not, it depends on the current lending environment - but it never hurts to ask.

Now you can buy with a little help from your friends:

We all know that Australia's housing market is one of the least affordable in the world.

Housing affordability is affected by many factors including slow land releases and restrictive development regulations (both likely to persist for some time).

An increasing number of Australians are turning to co-ownership as a solution.

To discover some of the benefits (and how to avoid the pitfalls) from entering into a co-ownership arrangement, download my free guide - "You can buy with a little help from your friends"?.https://www.mortgageaustralia.com.au/email/files/buywithalittlehelpfromyourfriends.pdf

Competition among lenders for home loans remains steep but borrowers may still be missing out on great deals and important information that could save them thousands of dollars.

1. YOU CAN SET UP A LINE OF CREDIT TO HELP FUND YOUR INVESTMENT PROPERTY

If you are negative gearing an investment property, you will have a shortfall between your costs and rental earnings. You can fund this gap with a line of credit (LOC) product using equity in your home or another property.

Say you have a gap of about $500 each month for your investment property, including interest and other costs, such as repairs and rates. You could set up a LOC for $20,000 to fund these expenses for a period of time, which may give you a little more financial breathing room. How long the LOC holds up will depend on interest rate fluctuations and your rental costs.

Like interest on your primary investment loan, the interest on this LOC is tax deductible, providing its sole use is to cover your investment expenses.

One caveat: this strategy works providing there is capital growth in your investment property over the same period, otherwise you are eating into your capital gain.

You also need to have some fiscal discipline and not dip into the LOC for non-investment related expenses, such as holidays.

While lenders will be able to set this structure up quite easily, they are not likely to offer it up front as part of your investment loan. Talk to your broker and financial advisor about whether this strategy is a smart option for you.

2. PEOPLE WITH POOR CREDIT RATINGS CAN STILL GET HOME LOANS

While it's true a poor financial record will probably make it harder for you to land a loan, the doors may not be closed. Lending criteria has tightened in the wake of the global financial crisis but there are still plenty of loans up for grabs for those with a blemished track record or little financial backing.

Be prepared, however, to pay a higher interest rate than the standard offering. A Mortgage Broker will be able to help you find loans with less stringent criteria, often labelled non-conforming loans, and will help negotiate with the lender on your behalf.

You should also do a budget to ensure you are able to make any repayments, lest you end up adding to your woes.

3. THERE ARE WAYS TO AVOID LENDER'S MORTGAGE INSURANCE IF YOU DON'T HAVE A 20 PER CENT DEPOSIT

Lender's Mortgage Insurance (LMI) is a one-off payment by the borrower when a loan exceeds 80 per cent of the property's value. It covers the lender's risk if the borrower defaults, but does not cover any loss by the borrower.

LMI can be a painful hit to the hip pocket, often running to several thousands of dollars, especially after a home buyer has scraped together the minimum deposit.

One alternative to paying LMI if you have less than a 20 per cent deposit is to secure a guarantor to cover the extra stretch.

A guarantor is usually a family member who is willing to put forward their property as security. One of the common myths that can scare family off is that the guarantor is then responsible for the entire loan. Not true. They only need to guarantee any amount beyond the 80 per cent loan-to-value ratio (LVR). Although it's a good idea for a guarantor to seek both financial and legal advice before committing.

The advantage of securing additional funding through a guarantor is that it simply gets tacked onto your loan so you can repay it over time, rather than forking out up front for LMI.

The key before you make any big decisions about home finance is to have all the facts at your fingertips. Your broker will be able to compare the products and options that are out there and size up which arrangement will work for you and your circumstances.

4. YOU HAVE FREEDOM OF CHOICE

Most lenders will pitch one or two loan products to customers. But that's a tiny fraction of the number of loans available in Australia. If you want to get a grasp of the wide variety of products out there, consider a mortgage broker.

A mortgage broker works for you, not the lender, and can help you tap this vast vein and find the loan that is best suited to your needs.

Talk to your broker about your financial circumstances and goals so they have as much information as possible to determine the best product solution for you.

All lenders ask for the pretty much the same information. If you're approaching a lender there are a few things you should be ready to give them to avoid unnecessary and frustrating delays.

Download my one page "Applying for a Loan" PDF guide for details.https://www.mortgageaustralia.com.au/email/files/applyingforaloan.pdf

Can you live as One Big Happy Family?

More Australian families are moving in with parents or in-laws in a bid to stake their claim in the property market and save everyone a bundle along the way.

Multi-generational housing has risen by more than 60 per cent over the past three decades, according to a 2013 report by the University of NSW City Futures Research Centre.

With property prices escalating and new land at a premium in most major capital cities, more families are deciding to pool their resources and take up digs together.

While not for every family, there are clear benefits to kids, parents and grandparents bunking in, not least of them being big savings.

Already more young adults are living at home longer to stave off the increasingly high costs of independent living, save for travel or squirrel away a deposit to buy their own place.

And while that arrangement probably suits the adult child more than mum and dad, the concept of multi-generational living tends to have more mutual perks.

The oldest generation, for example, might be looking to down-size and make their superannuation go further without compromising their lifestyle, while their children might want to step up to a bigger property in a better location.

Together, they are able to meet their financial and lifestyle goals.

Advantages:

Savings for all
One of the most obvious benefits of families sharing a property is greater buying power.

Naturally the property needs to be big enough to cater to a large number of people (and they can be difficult to come by) but once economies of scale kick in, families who combine their funds can usually pick up a higher calibre of property than if they were on their own.

Sharing families who can�t find the home they need may choose to build their own or renovate an existing one. Some are opting for a duplex-style arrangement where a wall splits the home in two to create entirely separate living areas with separate entrances.

Designed properly, the property can maintain its Residential A zoning without attracting all of the red tape and costs associated with developing a proper duplex.

Check with your local council what rules apply for your property.

Whether you build or buy, the savings can stack up in terms of loan repayments and rates and utilities, providing there are sound agreements in place for splitting expenses (see tips).

Extra care
Another advantage of multigenerational living is built-in childcare, providing it is mutually agreeable.

Grandparents are often willing to help out with children, which can help tally up further savings or create greater flexibility for busy working parents.

Even if children don�t require fulltime day care, having a grandparent on hand for school pick-ups or extra-curricular activities can help ease stress on the family dynamic. And it may not be just children who require the care.

Some families choose to live together to provide emotional or physical support to an aging parent who may be struggling to maintain their independence.

Fringe benefits
Although probably not top-of-mind for co-located families, there are plenty of incidental benefits when generations reside together:

There is someone on hand to care for plants and pets when one family goes away.

Senior residents can attract discounts on home insurance and improve security if home most of the time.

Old and new skills can be passed between generations � for example, grandkids can teach grandparents about technology, while grandparents might teach grandkids how to cook an old- fashioned favourite.

Many families report increased respect and understanding between generations.

Tips for multi-generational living

Although there are many advantages to multiple generations living under one roof, the arrangement is not without its challenges.

Prior planning and plenty of ongoing, respectful discussion are often required to help things run smoothly.

Here are some tips on what to consider to help ensure the situation doesn�t get too close for comfort.

Discuss what each party expects to get out of the situation so there�s agreement from the outset.

Get legal and financial advice and ensure there are agreements in place to avoid any grey areas over who pays for what when establishing the home � buying or building � and for all ongoing expenses, such as groceries and household bills.

Be clear about responsibilities so each family member understands what jobs are expected of them.
Establish a routine for meals � who cooks, when the family eats and whether everyone eats together.

Set up rules for privacy to instil boundaries if needed � grandkids, for example, might be asked to give a grandparent some time out after dinner.

Consider whether holidays and outings involve all family members or just some, and try to make plans well in advance so there are no surprises, clashes or confusion.

Grandparents should be clear from the get-go about how much they wish to be involved in caring for grandchildren.
Make time to discuss how the situation is tracking for everyone involved so any grievances can be aired productively.

Mention interior designers and most people think glossy magazines, luxe fit-outs and big bucks. But interior designers are not necessarily expensive, and the right advice from the right style guru could add some panache and pizzazz to your d�cor for fewer dollars than you think. It�s as much about knowing who to use as it is about knowing how to use and when to use an interior designer.

When building:

An interior designer can help inject your personal style and personality into your new home. If building a custom or architect-designed home, an interior designer will help connect your carefully crafted exterior with what�s within. Your architect and designer may even work hand in hand to ensure there�s continuity throughout. It�s about creating spaces you enjoy but also those that function efficiently.

Inviting a designer to work on a new home is like presenting a painter with a blank canvas. But don�t wait until your house is complete to introduce your designer. Bring them into the project while it�s under construction to help choose materials for critical design features, such as the kitchen, bathrooms and floors.

Even if building a project home, with limited choices of features and materials, you can make the most of a designer to stamp your own style. Find a designer who is willing to work for just a few hours at an agreed rate to provide advice on colour, art choices and soft furnishings.

Avoid incorporating too many fads into permanent fittings and fixtures. Tastes, trends and technology change so limit bold statements to furniture and d�cor you can switch out easily.

When renovating:

Before you knock down walls or put up new ones, invest in a visit from an interior designer for sound advice and fresh thinking. A good designer will listen to your brief but overlay it with their experience and insights, which means they can see around the corners you can�t, helping you maximise design opportunities and avoid costly mistakes. Your designer can also project manage some aspects of the renovation for you, which is handy if you work full-time. Costs vary but add at least 10 per cent to your renovation budget for this service.

Show your designer any special items you wish to display, such as a painting or a collection, to ensure your remodel will accommodate them. Interior designers focus on the big picture but also bring an eye for detail to ensure your renovation reflects you, your interests and your lifestyle.

One of the biggest benefits of using an interior designer is their ability to act as a renovation referee, ensuring the project caters to both his and her needs and encouraging compromise where required.

When selling:

This is when designer tastes can really pay off. A well-staged home can help seal the deal sooner and potentially fetch bigger bucks than if you styled it yourself.

Staging can cost thousands, especially if you hire furniture and art (which can be worth it), but a designer can also help you show your house in its best light on a budget.

One of the first priorities is to declutter. A designer is likely to be more ruthless and less emotional about what to display, and will know how to make rooms appear as light and bright as possible.

Ask your designer to advise on paint, window dressings and soft furnishings, all of which can be easy and inexpensive to change before your house goes on the market.

How to work on a budget with an interior designer:

Find a designer who is willing to work for an hourly rate and be specific about how you wish to use their time. You might, for example, ask them to come up with design ideas on the proviso you put the effort into bringing them to life.

Share your decorating budget with the designer so they select furnishings, fixtures and fabrics you can afford.

Ask your designer to develop a mood board with colours and materials so you can create the look yourself.

If your budget is super skinny, engage a designer just to scope your colours. You can get expert advice on the right paint palette for as little as $150 an hour.

Find images in magazines and online to explain what you do and don�t like.

Just letting everyone know my phone is on! I'm taking calls and still helping clients.

This past week, I helped a client secure a loan for their first home, which is honestly the most satisfying part of my job.

The best part about being a first-home buyer right now is that you may be eligible to purchase a home with only a 5% deposit through the First Home Guarantee. The government guarantees your deposit, so there's no Lender's Mortgage Insurance (LMI) to pay.**
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The First Home Guarantee is designed to help first-home buyers and give them a chance to enter the property market. So, to all my first-home buyer friends out there, I'd be happy to hear from you! Give me a call, send me a message, or comment below.

Drive away in your dream car with a low cost car loan.

Make your house a home with a low cost home improvement loan.

For the more adventurous - here is a guide to investing in Commercial Property.

When mum and dad investors consider property, most look no further than the residential market.

While homes and apartments may be seen as simpler and safer options, many investors are prepared to defy tradition and set their sights on the commercial sector.

Commercial property differs to residential, but with the right understanding of the key drivers, it need not be more complex.

How does commercial property differ to residential?

Firstly, commercial property attracts GST on the purchase price and the rent received, unlike residential real estate, which remains GST-free on both fronts.

An exception to this may be where the property is acquired with an existing lease in place. In this case, the vendor may be able to treat the sale as a 'GST exempt sale of a going concern' (refer www.ato.gov.au).

Commercial properties also usually attract higher yields - seven to eight per cent on average, compared to half that for the residential market. But the higher returns are often offset by the bigger risk of longer vacancy periods, which is why choice of property is paramount.*

On the up side, commercial tenants tend to take much longer leases than domestic renters, providing a stable financial footing for your investment.

Another distinction is who pays for property upgrades. In the residential sector, owners foot the bill for maintenance, repairs and improvements, while tenants usually cover the cost of refurbishments to suit their particular enterprise.

The right property

With retail outlets, offices and industrial estates all sitting at the heart of our economy, it can be hard to decide which type of commercial property to invest in.

Many first-time commercial investors are business owners looking to end the rent cycle and acquire an asset at the same time. If you don't own your own business, a good starting point is to consider the same principles that apply to residential investment.

Look for properties in growth sectors in areas with low vacancy rates. A drive around any light industrial estate, CBD or retail strip will quickly reveal the 'for rent' signs and give you a pulse check on local supply and demand.

You should also consider local infrastructure, such as transport, and even commercial entities that may be a drawcard for others. In the retail sector, a big brand name with a long-term lease (called an anchor tenant) can be the attraction for smaller operators looking to cash in on the high foot traffic the big name will generate.

Commercial tenants also look for properties with high visibility, easy access and plenty of parking, especially if there is no public transport nearby.

If looking at a light industrial property or office complex in a commercial estate, check it is not in a flood zone. Some commercial complexes are built in low-lying areas at risk of riverine or flash-flooding. Flood cover is not always offered on commercial properties and can be costly when available, so assess the risk thoroughly before you invest.

Commercial property agents will happily help you with the property hunt. Keep in mind their job is to sell, so make sure you do your own homework on values, vacancy rates, average rents and potential tenants for any property put forward.

Another helpful starting point is your mortgage broker. They can help you work out your budget based on your existing loans and financial arrangements and find a loan product suitable for your circumstances.

The right tenants

Attracting the right tenants is the key to successful commercial investment. Concerned by the potential for long vacancy periods, commercial property investors often snap up the first tenant who comes along.

Take time to research whether the applicant is in a viable sector with strong demand or a waning one. While you can lock any tenant into a three-year lease, an insolvent business will not be able to pay the rent, no matter how many demands you place on it.

On the other hand, a flourishing business with a strong track record may request a longer term lease in some cases up to 10 years. You may even be able to request a bank guarantee for the term of the lease.

* The information contained in this article does not constitute either financial or taxation advice. We recommend you speak with your financial advisor, and as taxation legislation is complex, you should consult a tax advisor or contact the ATO for further details and expert advice in relation to your personal circumstances.

How to buy a property with a friend (and remain friends)!

How would you like to double your deposit and double your income to buy your first property? Sounds pretty good doesn't it? That's the reason why many young homebuyers are now working together with a partner, friend or relative to break into the property market.

Although there are some excellent benefits to entering a property partnership, there are some pretty nasty horror stories out there too - so you need to make sure you protect yourself against the worst.



Make sure you have similar goals for you property purchase.

Do you both agree on how long you would like to keep the property for? Do you want to rent it out, or will you be living there together? Make sure everyone is on the same page before you enter into any contracts.



Buy with someone who is at a similar stage in life.

If you buy with a family member who has a baby on the way, you might be asking for trouble. Likewise, buying with a sibling who is too young to appreciate the importance of keeping up financial commitments could be just as much of a recipe for disaster.



Take a moment to check your financial compatibility.

You will be responsible for the loan if the other party becomes unable to pay, so take the time to have some open discussions about money, and make sure you are both equally committed to paying things on time and keeping track of the bills.



Decide if you want to be housemates.

If you plan to live together in the home, make sure you both agree about things that could cause arguments such as having pets in the house, allowing partners to sleep over, housework and other potentially touchy subjects.



Get Legal Advice.

Find out about your options legally if something was to go wrong, and decide whether you want to be Joint Tenants, or Tenants in Common. This might depend on whether you will pay an equal share of the deposit and loan repayments.



Create a formal agreement.

Get a formal agreement drawn up that covers as many issues as you can think of. Hopefully you won't have any problems, but it might be helpful if you already agree on the solution ahead of time. Property partnerships can turn into nasty legal battles when parties don't agree on important issues, such as whether or not to sell the property. If you can thrash out some of these issues now you will save yourself a lot of worry in the future.



Keep records of spending.

Make sure you keep it even, and try to keep records of who paid for what, just in case you have problems down the track.

Hopefully your property partnership will be a very positive experience, and if you follow these steps you should be well on your way to being a great team.

My top 7 Tips for Buying Off The Plan

New home sales are back on the rise, fuelled in part by many investors and owner-occupiers buying off the plan.

The concept is straightforward: put up a deposit (usually 10 per cent) to help the developer fund construction and pay the balance when the build is complete.

Apartments are now springing up at a rapid rate in capital cities and popular holiday locations with the confidence that property prices will rise, handing buyers a tidy capital growth when they eventually take possession.

Developers sell off the plan to entice as many sales commitments as possible to then secure from their lender the finance they need for the build.

Because buyers are essentially handing over their deposit for the promise of an apartment they won't see for one to two years (or more), prices are set at current market rates with incentives often offered to entice buyers.

This adds to the capital gain potential, but price rises are never a sure thing, as we have seen in past years.

In exchange for your deposit, the developer should provide a contract that outlines the details of your particular purchase, the completion date for the development and the deadline for when a decision must be made as to whether the development will go ahead.

That decision usually hinges on whether sufficient finance has been secured. If the developer pulls the pin or passes the decision deadline, you should be entitled to a refund of your deposit, but this depends on the conditions of the sale contract.

It is imperative that you read this document carefully, and we recommend that you seek thorough legal advice. Full payment for the property is not required until settlement, which is usually one to three months post completion.

While buying off the plan looks great on paper and can reap rewards, getting in on the ground floor of a new development is not always a fast track to making money. Haven looks at how you can make the most of the opportunity and avoid some of the common pitfalls.

?- Time on your side

One of the biggest advantages of buying off the plan is time. Unlike traditional property purchases with relatively short windows to round up the total finance, you will have at least 12 months, if not longer, to settle.

Savvy buyers will take advantage of this extra time to save their pennies and reduce their borrowings.

- New home, no hassles

If you dream of a new home but have nightmares at the thought of building one, an off-the-plan purchase may be the perfect compromise.

Although you will not get to design everything as you would with a custom-built home, most off-the-plan developments allow some customisation of finishes and fixtures.

Make sure your contract outlines what you can tailor and that you are clear on any additional costs.

- First-home-buyer advantage

Various incentives are still being dangled in front of first-home-buyers, which may add to the appeal of buying off the plan.

Concessions vary across Australia and some have been curbed since January 1, so visit your State or Territory web site for the latest information on grants and exemptions.

You can also research your eligibility for stamp duty concessions on new properties at www.stampdutycalculator.com.au

- Investment incentive

Off-the-plan apartments are often pitched heavily at investors due to the tax* benefits that come with depreciation on new properties and rental assurances.

Tax savings will depend on your individual circumstances, but generally the newer the property, the higher the depreciation allowance for the building and fixtures.

Investors may also be offered attractive rental returns for a limited period. Make sure you do your homework on rental returns on similar properties in the area before accepting the developer's terms.

Be wary of over-inflated rental figures. Builders will sometimes promise a high-rent yield to lure investors, build the cost into the property price and then subsidise any gap themselves for a short period.

When the rental guarantee expires, you may find the actual market rent falls well short of what you originally pocketed. If investing, make sure you have the option to manage the property yourself or with your chosen property manager from the time you take possession.

- Beware a boom

Many buyers get swept up on a wave of rising property prices when they hand over their deposit in exchange for a floor plan. Historically, property is a consistent long-term performer, but property prices can plateau and even wane at the mercy of economic factors.

Buyers also need to be wary of over-supply, which may devalue their property. Queensland's Gold and Sunshine Coasts are carrying a glut of apartments on the back of many years of off- the-plan sales, while the skylines of capitals such as Canberra have real estate commentators urging caution.

Make sure you consider the bigger picture if buying off the plan. Research how many other developments are planned in the area and whether any increase in apartment numbers is justified by new or improved infrastructure, such as transport corridors, business precincts, universities or hospitals.

- Be discerning about the developer

Make sure you purchase from a reputable builder and take the time to research their previous projects. Do they use quality contractors? Do they deliver projects on time? Make a point of visiting some of their projects so you can assess the finished product first-hand.

My Top 7 Top Tips

1. Investments like this are big decisions, so investing in the right professionals to have onside before you commit is money well spent. Ensure you get professional legal advice on any contract before you sign it and that you speak with your financial advisor or tax professional to make sure you've got the right advice from day one.

2. Make sure your deposit will be refunded if the project doesn't go ahead by a certain date.

3. Make sure the contract contains as much detail as possible about the finished product.

4. Be clear on what finishes and fixtures you can customise.

5. Find out if you can on-sell during construction in case your circumstances change.

6. Ask if you can inspect the site during construction.

7. Talk to your mortgage broker about the right loan structure for your circumstances.