Just wishing you all a very merry Christmas and happy new year.
All my properties are open to view over the Holidays by appointment.
Have an enjoyable & safe break and see you all in the new year.
DEB BRADY
0405 570 903
Monday 19 December 2011
Tuesday 6 December 2011
What is your home worth?
Hi Followers
Are you thinking of making a move or just interested in knowing what your home is worth?
For a confidential market appraisal please contact Deb Brady on 0405 570 903 anytime to discuss.
DEB BRADY
0405 570 903
Are you thinking of making a move or just interested in knowing what your home is worth?
For a confidential market appraisal please contact Deb Brady on 0405 570 903 anytime to discuss.
DEB BRADY
0405 570 903
"Ten ways to increase your borrowing capacity"
Hi Followers
I came across this today and though I'd share:
Since the mid nineties Australian mortgage providers have operated under regulatory guidelines designed to encourage responsible lending. One aspect of these guidelines has been the ‘Ability to Repay Test’, commonly referred to as 'serviceability'.
"Put simply, financial institutions must demonstrate they’re satisfied that borrowers can afford to repay their debt," Smartline Personal Mortgage Advisers managing director Chris Acret explains. "If lenders don't demonstrate their satisfaction to that end, they risk their right to foreclose on a client in the event of default."
Acret says lenders interpret the Ability to Repay Test in different ways and, contrary to popular opinion, the loan amounts lenders deem to be responsible also vary greatly.
"In fact, a recent enquiry made by one of our advisers determined – from a range of 22 mortgage lenders – that a single borrower on a gross annual salary of $60,000 and a credit card liability of $5000 was able to borrow approximately $277,000 with the most frugal lender and approximately $372,000 with the most expansive lender," he says. "This demonstrates the range within which lenders interpret a borrower’s ability to repay – and that it pays to shop around."
Since the global financial crisis lenders have tightened their Ability to Repay calculations. "However, while lenders have been making moves to lend us less money, borrowers are faced with growing property prices in every capital city," Acret says.
These changes don’t mean that securing the right loan for your needs is an insurmountable task, but it’s more challenging and time consuming to wade through the policies, loan types, rates and lenders on offer.
With that in mind, API asked a few experts in the finance field to come up with effective strategies for investors to consider in their mission to boost their borrowing capacity.
Mortgage Choice senior corporate affairs manager Kristy Sheppard says rolling your personal loan or other debts into your mortgage can help your cause because they then won't show as other financial commitments. "However, this will stretch the debt over the life of your home loan term, attracting more interest in the long run," she warns.
"When most lenders assess your ability to repay a mortgage, they assume that your credit card will be fully drawn up to its limit," he says.
"Given most credit card providers insist that three per cent of the debt amount be repaid every month, the unused limits can be detrimental to your mortgage borrowing capacity. Every $1000 in credit card limits adds $30 per month to your monthly expenses and reduces your ability to borrow."
Canstar Cannex senior financial analyst Harry Senlitonga suggests closing all credit card accounts except one.
"It may sound extreme but lenders will look at the credit limit on your card or cards as a liability you may have in the future, even if you don’t owe a solitary cent currently," he says.
"For instance, if you have a card with an $8000 limit and another with a $4000 limit, a lender will write down $12,000 as a debt against your name. Reducing your credit card limit by $10,000 may increase your calculated monthly disposable income by $300, which has the effect of having a net pay rise of $3600 per annum."
"Simply completing your tax returns on time can help your mortgage adviser secure the loan you're after," says Acret.
Senlitonga says it's also important to show your overall income to your lender, not just your last two payslips.
"In many cases, the last two payslips required by a lender may not give a clear picture of your true income," he says. "In the situation where you may have a low base salary but high bonus payments, providing your last two payslips could be a disadvantage. Most lenders will be able to provide an alternative way to assess your income which can be based on the group certificate from your employer or even notice of assessment from the Australian Tax Office.
"Concentrating on the bigger picture of annual income rather than the most recent payslips will help."
Lenders can be very selective when it comes to the type of income they include in their repayment capacity calculations, says Acret. Some income types may be excluded altogether by one lender and fully included by another.
According to Acret, "Almost every lender treats income derived from dividends, second jobs, child maintenance payments, company profits, bonuses, commissions, government benefits, annuities and rents differently. Navigating your way around this maze is very difficult and every dollar that a lender accepts improves your borrowing capacity."
"A decrease of one per cent on your home loan rate may free up your cash flow by $260 a month on a $400,000 loan," says Senlitonga. "This has the same effect of getting a net pay rise of $3120 per annum."
"For example, two children as dependants may not be counted as your dependants if you can prove that your partner does and will continue to provide for them financially," he says.
"It's increasingly requested by lenders because it minimises their risk of lending money against one single property," says Senlitonga. "In other words, it's a form of diversification for a lender."
But be warned, there are pros and cons with this strategy.
"The good thing is it may increase your serviceability to the extent you may borrow at a higher loan-to-value ratio. This may also save you money on lenders mortgage insurance when you borrow above the lender's threshold.
"The bad thing is, in the event of you being unable to meet the loan repayments, the lender may repossess the securities, which could put your properties at risk."
Another disadvantage with this option is that it can restrict your ability to refinance with another lender, so make sure you understand all the implications.
"Thirty-year loans for property are considered normal but not many people realise that you can now get 40-year loans in Australia," says Senlitonga. "Extending your loan term from 30 to 40 years will reduce your monthly repayments by $184 on a $400,000 loan.
"There are more than a handful of institutions offering these extended term loans and, in the right circumstances, a 40-year loan can boost loan serviceability."
This information was gathered from:
http://www.apimagazine.com.au/api-online/property-investment-articles/ten-ways-to-increase-your-borrowing-capacity
DEB BRADY
0405 570 903
I came across this today and though I'd share:
Since the mid nineties Australian mortgage providers have operated under regulatory guidelines designed to encourage responsible lending. One aspect of these guidelines has been the ‘Ability to Repay Test’, commonly referred to as 'serviceability'.
"Put simply, financial institutions must demonstrate they’re satisfied that borrowers can afford to repay their debt," Smartline Personal Mortgage Advisers managing director Chris Acret explains. "If lenders don't demonstrate their satisfaction to that end, they risk their right to foreclose on a client in the event of default."
Acret says lenders interpret the Ability to Repay Test in different ways and, contrary to popular opinion, the loan amounts lenders deem to be responsible also vary greatly.
"In fact, a recent enquiry made by one of our advisers determined – from a range of 22 mortgage lenders – that a single borrower on a gross annual salary of $60,000 and a credit card liability of $5000 was able to borrow approximately $277,000 with the most frugal lender and approximately $372,000 with the most expansive lender," he says. "This demonstrates the range within which lenders interpret a borrower’s ability to repay – and that it pays to shop around."
Since the global financial crisis lenders have tightened their Ability to Repay calculations. "However, while lenders have been making moves to lend us less money, borrowers are faced with growing property prices in every capital city," Acret says.
These changes don’t mean that securing the right loan for your needs is an insurmountable task, but it’s more challenging and time consuming to wade through the policies, loan types, rates and lenders on offer.
With that in mind, API asked a few experts in the finance field to come up with effective strategies for investors to consider in their mission to boost their borrowing capacity.
1. Consolidate unsecured debts into your mortgage
"Typically, unsecured debts such as personal loans and credit cards have short repayment terms that force you to reduce your debts with expensive monthly repayments," says Acret. "These high repayment levels impact the bank's Ability to Repay calculation for your mortgage because unsecured debt limits the amount of uncommitted funds you have available to repay the proposed mortgage."Mortgage Choice senior corporate affairs manager Kristy Sheppard says rolling your personal loan or other debts into your mortgage can help your cause because they then won't show as other financial commitments. "However, this will stretch the debt over the life of your home loan term, attracting more interest in the long run," she warns.
2. Reduce excess credit, especially credit cards
Acret says if you have any unused credit cards or credit cards with limits that exceed your need for credit, then it makes sense to either cancel the limits or reduce the limits down to a manageable level."When most lenders assess your ability to repay a mortgage, they assume that your credit card will be fully drawn up to its limit," he says.
"Given most credit card providers insist that three per cent of the debt amount be repaid every month, the unused limits can be detrimental to your mortgage borrowing capacity. Every $1000 in credit card limits adds $30 per month to your monthly expenses and reduces your ability to borrow."
Canstar Cannex senior financial analyst Harry Senlitonga suggests closing all credit card accounts except one.
"It may sound extreme but lenders will look at the credit limit on your card or cards as a liability you may have in the future, even if you don’t owe a solitary cent currently," he says.
"For instance, if you have a card with an $8000 limit and another with a $4000 limit, a lender will write down $12,000 as a debt against your name. Reducing your credit card limit by $10,000 may increase your calculated monthly disposable income by $300, which has the effect of having a net pay rise of $3600 per annum."
3. Keep financial records up to date
One of the most common reasons borrowers find themselves well short of their anticipated borrowing levels is that they don’t have up to date financial information to prove their income levels to the lender."Simply completing your tax returns on time can help your mortgage adviser secure the loan you're after," says Acret.
Senlitonga says it's also important to show your overall income to your lender, not just your last two payslips.
"In many cases, the last two payslips required by a lender may not give a clear picture of your true income," he says. "In the situation where you may have a low base salary but high bonus payments, providing your last two payslips could be a disadvantage. Most lenders will be able to provide an alternative way to assess your income which can be based on the group certificate from your employer or even notice of assessment from the Australian Tax Office.
"Concentrating on the bigger picture of annual income rather than the most recent payslips will help."
4. Select the right loan product
According to Smartline, even within one financial institution there can be a big difference in borrowing capacity levels based on the product you select. “Product features such as interest-only repayments, fixed rates, variable rate discounts and lines of credit can all impact how much the lender will offer,” says Acret.5. Be aware that income type is treated differently by nearly every lender
Lenders can be very selective when it comes to the type of income they include in their repayment capacity calculations, says Acret. Some income types may be excluded altogether by one lender and fully included by another.
According to Acret, "Almost every lender treats income derived from dividends, second jobs, child maintenance payments, company profits, bonuses, commissions, government benefits, annuities and rents differently. Navigating your way around this maze is very difficult and every dollar that a lender accepts improves your borrowing capacity."
6. Shop around
It may sound obvious but paying a low interest rate will save you hundreds of dollars on annual loan repayment commitments and thus increase your initial affordability."A decrease of one per cent on your home loan rate may free up your cash flow by $260 a month on a $400,000 loan," says Senlitonga. "This has the same effect of getting a net pay rise of $3120 per annum."
7. Split your liabilities with your partner
If you're planning to buy a property under your name only, you can split your expenses on paper with your partner, says Senlitonga."For example, two children as dependants may not be counted as your dependants if you can prove that your partner does and will continue to provide for them financially," he says.
8. Use your properties as cross collateral
Using your property as cross collateral, or cross security, means you provide an existing property as a security to buy another property."It's increasingly requested by lenders because it minimises their risk of lending money against one single property," says Senlitonga. "In other words, it's a form of diversification for a lender."
But be warned, there are pros and cons with this strategy.
"The good thing is it may increase your serviceability to the extent you may borrow at a higher loan-to-value ratio. This may also save you money on lenders mortgage insurance when you borrow above the lender's threshold.
"The bad thing is, in the event of you being unable to meet the loan repayments, the lender may repossess the securities, which could put your properties at risk."
Another disadvantage with this option is that it can restrict your ability to refinance with another lender, so make sure you understand all the implications.
9. Extend the term of your loan
The longer the loan, the less the monthly repayments."Thirty-year loans for property are considered normal but not many people realise that you can now get 40-year loans in Australia," says Senlitonga. "Extending your loan term from 30 to 40 years will reduce your monthly repayments by $184 on a $400,000 loan.
"There are more than a handful of institutions offering these extended term loans and, in the right circumstances, a 40-year loan can boost loan serviceability."
10. Save, save, save
Build up as much deposit or equity as possible. "If you're using a deposit to secure your loan, be sure to have saved consecutively over at least three to six months, depending on the lender," Kristy Sheppard says.This information was gathered from:
http://www.apimagazine.com.au/api-online/property-investment-articles/ten-ways-to-increase-your-borrowing-capacity
DEB BRADY
0405 570 903
"How to maintain a tenant and improve your rental return"
Hi Followers
I came across this article today and thought I'd share with you.
We all want a great tenant and the rent on our investment property to go through the roof. Both can be hard to find and in terms of rent, even harder to keep increasing.
For example, you might get the great tenant but then be reluctant to notch up the rent in order to keep the tenant happy. Or you might be achieving a good rental rate but feel obliged to continue the same rent year after year. After all, some rent is better than none at all, right?
Let's start with the tenant. Property millionaire and author Jan Somers says keeping a good tenant is all about being fair and the odd improvement every now and then isn't a bad idea.
"It doesn't have to be a complete renovation," she says. "But if something needs fixing, we do it instantly."
In today's current market, she adds some areas such as Redcliffe in Queensland are experiencing an oversupply of rental properties. This might mean landlords actually have to drop their rent, but lowering your rent slightly is often worth it in a slow market.
"A tenant tomorrow is better than holding out to get your $350 per week in three months' time," she says.
"You must have a tenant ASAP, so 90 per cent or 80 per cent of what you think your rent should be is better than 100 per cent of nothing."
If the rent is slightly cheaper, the tenant may also be willing to stay longer.
"Then you don't have the changeover fee where you'd be paying an agent once or twice a year," she points out.
While Somers is generous with her tenants, it's still important to "nudge the rent along" occasionally.
"If the market warranted putting it up $20 or $30 per year, we might put it up at $5 or $10," she says.
Giving the occasional bottle of champagne to your property manager doesn't hurt either.
However, Your Empire founder and director, Chris Gray, is a little bit stricter with his portfolio. Being a savvy Sydney investor, he has no trouble ending a lease if it means more for the hip pocket.
"A lot of tenants won't pay a massive increase, so you're better off getting rid of them," he says.
"People say 'I've got good tenants so I'm not putting the rent up'. But if you have a good property, there should always be good tenants."
The trick, he believes, is to get a good property manager who knows how to negotiate increasing the rent and how to market your property so it's the must-have roof to be under. You can also do renovations but make sure the tenant is paying for them.
"Get the property manager to ask the tenant what they want and then what they'd be prepared to pay for it," he says.
"Add in lost rent down time. With a lot of these things, quite often it's (the renovation) is over a period of weeks. But over the year, the net benefit might then be positive."
This information was gathered from:
http://apimagazine.com.au/api-online/property-investor-tips/how-to-maintain-a-tenant-and-improve-your-rental-return
DEB BRADY
0405 570 903
I came across this article today and thought I'd share with you.
We all want a great tenant and the rent on our investment property to go through the roof. Both can be hard to find and in terms of rent, even harder to keep increasing.
For example, you might get the great tenant but then be reluctant to notch up the rent in order to keep the tenant happy. Or you might be achieving a good rental rate but feel obliged to continue the same rent year after year. After all, some rent is better than none at all, right?
Let's start with the tenant. Property millionaire and author Jan Somers says keeping a good tenant is all about being fair and the odd improvement every now and then isn't a bad idea.
"It doesn't have to be a complete renovation," she says. "But if something needs fixing, we do it instantly."
In today's current market, she adds some areas such as Redcliffe in Queensland are experiencing an oversupply of rental properties. This might mean landlords actually have to drop their rent, but lowering your rent slightly is often worth it in a slow market.
"A tenant tomorrow is better than holding out to get your $350 per week in three months' time," she says.
"You must have a tenant ASAP, so 90 per cent or 80 per cent of what you think your rent should be is better than 100 per cent of nothing."
If the rent is slightly cheaper, the tenant may also be willing to stay longer.
"Then you don't have the changeover fee where you'd be paying an agent once or twice a year," she points out.
While Somers is generous with her tenants, it's still important to "nudge the rent along" occasionally.
"If the market warranted putting it up $20 or $30 per year, we might put it up at $5 or $10," she says.
Giving the occasional bottle of champagne to your property manager doesn't hurt either.
However, Your Empire founder and director, Chris Gray, is a little bit stricter with his portfolio. Being a savvy Sydney investor, he has no trouble ending a lease if it means more for the hip pocket.
"A lot of tenants won't pay a massive increase, so you're better off getting rid of them," he says.
"People say 'I've got good tenants so I'm not putting the rent up'. But if you have a good property, there should always be good tenants."
The trick, he believes, is to get a good property manager who knows how to negotiate increasing the rent and how to market your property so it's the must-have roof to be under. You can also do renovations but make sure the tenant is paying for them.
"Get the property manager to ask the tenant what they want and then what they'd be prepared to pay for it," he says.
"Add in lost rent down time. With a lot of these things, quite often it's (the renovation) is over a period of weeks. But over the year, the net benefit might then be positive."
This information was gathered from:
http://apimagazine.com.au/api-online/property-investor-tips/how-to-maintain-a-tenant-and-improve-your-rental-return
DEB BRADY
0405 570 903
FOR SALE: 8/31 Harvest Road, North Fremantle
Hi Followers
Situated in a boutique complex of only 8 this 2 level townhouse is perfect for any person looking for an easy care lifestyle. Natural light flows through the open plan living.
- Private & secure
- Highly desired location
- Walking distance to The Swan River & North Fremantle shopping and cafe precinct.
This home is perfect for the busy professional couple or downsizers wanting a hassle free lifestyle.
Situated in a boutique complex of only 8 this 2 level townhouse is perfect for any person looking for an easy care lifestyle. Natural light flows through the open plan living.
- Private & secure
- Highly desired location
- Walking distance to The Swan River & North Fremantle shopping and cafe precinct.
This home is perfect for the busy professional couple or downsizers wanting a hassle free lifestyle.
Accommodation: 3 bedrooms, 2 bathroom, open plan kitchen meals and living, outdoor area, 2 car, secure living.
For Sale: OFFERS
To arrange a private inspection or for further information please contact Deb Brady on 0405 570 903
DEB BRADY
0405 570 903
FOR SALE: 15/7 O'Halloran Lane, Mosman Park
Hi Followers
This renovated two level townhouse Is the opportunity for first home buyers or investors. A private and secure garden & terrace surrounds this lovely refurbished home. Downstairs consist of a spacious living room and large modern kitchen while upstairs features 2 large double bedrooms and a bathroom.
Accommodation: 2 bedrooms, 1 bathroom, living area, kitchen, larghe garden & terrace, 1 car
For Sale: $489,000
To arrange a private inspection or for further informationplease contact Deb Brady on 0405 570 903.
DEB BRADY
0405 570 903
This renovated two level townhouse Is the opportunity for first home buyers or investors. A private and secure garden & terrace surrounds this lovely refurbished home. Downstairs consist of a spacious living room and large modern kitchen while upstairs features 2 large double bedrooms and a bathroom.
For Sale: $489,000
To arrange a private inspection or for further informationplease contact Deb Brady on 0405 570 903.
DEB BRADY
0405 570 903
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