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Should you use a mortgage broker

You have decided that you want to purchase a property. Should you use a mortgage broker or just contact one of the big banks or perhaps deep dive into Google and do all the research yourself? Do you even know what a mortgage broker does?

A mortgage broker

The most important thing to know is that a mortgage broker is working to find you the best lender based on your circumstances and needs. It is their speciality to go through your facts and figures and come up with one or several options that suit you. A mortgage broker will generally come to you and spend an hour or more understanding your needs so they can advise you.

From here that will assess your borrowing power and determine the amount that you will be able to borrow and can afford to borrow. They will help you to fill out the paperwork and submit your application for approval – yes they do the paperwork for you!

As a general rule, on average most mortgage brokers are accredited with more than 30 of the best lenders.

A mortgage broker is paid by the lender so there should be out of pocket for you.

What are the benefits

  • Saving you time and money
  • Knowledge to find you the best deal currently available
  • Management of the paperwork to gain your preapproval
  • Peace of mind that they are looking after everything that is required
  • A mortgage broker is independent which means there is no favouritism to one lender
  • The broker is accredited with 20 to 40 or more lenders to choose from

What you should ask

  • Are they accredited and registered ASIC
  • Have a credit license
  • Association memberships are a bonus
  • Find out how many accreditations they have so you have more choices
  • Ask your friends and family for recommendations of people they have used
  • Some brokers do charge fees so ask first
  • If they are members of the Mortgage & Finance Association they are required to disclose their commission from the lender
  • How much information they need from you so you can be prepared when you meet.

When you are ready to buy a property ensuring your finances are in order is the first step. You can then confidently search for and buy your property. At Select Conveyancing, we work directly with your lender to ensure the settlement of the property on the day of settlement.

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Open for inspection checklist

We are in the era of homes being staged for sale. This is so they look their best for the buyer and it is easy to fall in love at an inspection. You walk into a house that just happens to be presented exactly as you have always dreamed and boom you are sold. However, if you are truly serious about buying this property you need to make some simple checks yourself.

It is this simple open for inspection checklist that can save you a lot of money in the future.

Check the following:
Open for inspection checklist

  • Check the walls for signs of moisture.
  • Check near showers and baths and their adjoining walls.
  • Look inside the cabinets of the bathroom and kitchen for damp mould or mildew.
  • Look over the bathrooms and bedrooms for mould and ask if it was recently cleaned or painted as this can disguise issues further.
  • Check the walls for any large cracks, more than 2mm in width can be a major issue and should be checked further.
  • Look for map cracking (looks like the lines of a map) on plaster as this may cause the plaster to come loose when you attempt to hang a fixture.
  • Look over the ceiling for any sagging spots.
  • View the roof lines from outside – are they nice and straight or are they dipping, if they are dipping this may be a costly repair.
  • What do the gutters look like – Any rust or corrosion will need repair.
  • Where do your downpipes run to – it should always run to the stormwater drains and not just the ground.
  • Look around the property for any signs of previous flooding or water issues.

All these checks are fairly simple to do yourself. If you are happy you should then get a professional to asses the property and provide you with a report so you can have peace of mind with your purchase.

Make sure you contact Select Conveyancing to look after the contracts for your new property.

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Are you a first home buyer?

Planning to buy your first home can be the most exciting time. However, there are many things that you need to consider and think about as first home buyers that your parents did not have to worry about.

Banks are warier

Following the banking royal commission, it is important for banks to include more items in the lending process. For example, scrutinising potential buyers spending habits was not mandatory – now it is part of the lending process. Since 2017 it has been that much harder for everyone to borrow as lenders have become far more responsible.

TIP: Make sure your saving is consistent and your debt is minimal or non-existent.

Uber Eats & Afterpay

We all love the convenience of getting our meals delivered and it is very easy to do this every other night. You should know that your lender may look right through all the transaction on your account and see a pattern of spending.

TIP: Calculate the approximate payments of your future home loan. If this is going to be $600 per week you should be saving this amount each week to demonstrate your ability to meet the requirements. And if you are renting and paying $450 per week then you should be saving the other $150 each week.

Remember that Afterpay is a debt and an ongoing debt if you are a regular user of this facility. It is another expense that lenders are going to be closely reviewing when you apply for a loan. Debts include car loans, personal loans and Afterpay.

TIP: Remove any unnecessary subscriptions and regular payments and show that you are a frugal saver.

Buyers Market or Sellers Market

It is always best to buy low and sell high. Keep an eye on what the experts are saying about the market, do your own research. In a buyers market, you can often negotiate a good price for your property.

TIP: Remember that buying property is a longterm investment and buying in the right location at the right time can be amazing for your future.

Lenders

You don’t have to stick with one of the big banks – shop around and get a deal that suits your circumstances. Visiting a mortgage broker is great for this as they can look at many different lenders to get the best deal for you.

Incentives – There are still first home buyer incentives available through the government, ask your lender about this.

When you are ready to purchase speak to Select Conveyancing. 

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Buy then sell – Sell then buy

This is almost an eternal question – Should you sell first and then buy or buy first and then sell?

Of course, there are no specific rules and everyone’s circumstances are different which leads to the actual answer being different for everyone. Buying first and selling second can potentially leave you with two mortgages. Selling first can leave you making a rushed purchase or needing to rent somewhere in between.

There is a third option – Settle on the same day. Serendipity… I hear you say. In a perfect world, the sale and purchase settle on the same day, paperwork exchanges without issue and all is well in the world. This however rarely happens and it mostly needs help to do so.

Here are some ideas to help you

Look at the market – In a rising market, it can be the perfect time to buy first and sell second. Buying at the start of the rise and selling at a higher price. Again you run the risk of not being able to settle and having a bridging mortgage or two mortgages. Also, there is a risk that you will accept a lower price as you become desperate to sell.

If there is a cooling market it is advised that you sell first and buy second. The pressure to accept a bad offer is reduced and you know exactly what you can afford to spend on your next purchase. However, you may find yourself renting if you can’t find the perfect property to buy.

Ask your agent – Working with one agent for the buying and selling increases your chances of buying and selling on the same day. Serendipity.

Extended settlements – By negotiating an extended settlement you increase the chances of a simultaneous settlement with your property’s. By negotiating 3 or 4 months you have the flexibility to work on getting the dates to match up. This can be tricky to agree to as the vendor may be in the same situation and need their own dates to work out.

Subject to completion – You can make an offer subject to completion. This means that your offer is only valid once your home is sold. While this reduces your risk it may not work for the vendor.

Bridging finance – Buying first and not selling your home will lead you to bridging finance. Typically interest only it is a loan on top of your existing home loan.

Conclusion

Make sure you do your research and decide on what will work for you. Contact us for your conveyancing needs and discuss how we can work with you to get your property settlements to occur on the same day.

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Is winter a bad time to sell your house?

You may have heard that winter is not the best time to sell. There is however some positives and some negatives to consider. It is important to remember that there is less stock, motivated buyers and cooler days to deliver great views. It is possible to get a great price for your home.

Selling your home in winter

Positives

Less stock – this may simply be a myth as in Sydney we don’t have horrible snow days when people can’t leave their house. There are still plenty of homes available during a buoyant market.

Motivated buyers – People making the effort to look at homes in the cooler months are more likely ready to buy. Particularly if your inspection day is a rainy day!

Cosy living – You can show off just how cosy your home is during the cooler months. The warmth from a fire or ducted air conditioning shows your home at its most welcoming.

Negatives

Buyers have to brave the weather – You may not get as many people through but the people who do come through will be genuine.

Wet weather can reveal issues in your home – Older homes may show damp issues or water issues. However, a serious seller would always repair this first.

Less natural light – Your home may not look its best in lower lighting

What about the other seasons

You may have heard that Spring is the best time but really, the best time is when you are ready to sell. It is the best time when you can present your property in its best light and overall presentation.

Regardless of when you decide to sell make sure you have a professional conveyancer involved in the process. Contact Nicola – Select Conveyancing Lane Cove.

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Using your equity for investment

Are you curious about using your equity to invest?

What is equity?

Home equity put simply is the difference between the current market value and any loans (debt) held against it. It is the amount of your home that you own outright and the amount that you can potentially use to invest. Using your equity for investment

What can I do with it?

Remember that you need to be able to afford to pay it back, so the bank will asses you based on your home value, income and expenses. While you may have a lot of equity, you may not have access to all of it at once.

  • Use it as a deposit on an investment property
  • Pay for a renovation
  • Invest in shares
  • Buy a car or go on a holiday

Buying an investment property is generally a good investment when you do your research and look for a property that can expect good returns and growth over time. You can include the expected rental to help you to service the loan and over time you will gain equity in that property. This new equity can be used to buy more investment properties.

Calculating your equity

Let’s say your home is valued at $1million and you owe $500,000. You have an equity of $500,000. Banks will generally lend you up to 80% of the value of your home so you have the potential to access $800,000 less what you already owe which leaves you $300,000. It is this $300,000 you can use towards a new investment. Remember that you do need to show that you can afford the new amount – If you are buying an investment property you will have rent to help you with the affordability calculations.

Once you have your approval to buy you can start looking for your investment. Speak to Nicola @ Select Conveyancing for all your conveyancing needs.

Always make sure to gain independent advice based on your circumstances to ensure you feel comfortable with the investment that you are making.

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Tips on investing in property

Are you looking for tips on investing in property?

When it comes to investments, property remains one of the safest choices long-term. You may be investing from a distance and renting out your property. Or you may be buying and living in it while you renovate to sell in the future. Either way, keep reading and get in touch with Nicola at Select Conveyancing for your all property conveyancing needs.

Know how much you can spend

Before you invest in property you need to know exactly how much you can afford. This is done by both understanding your cash flow and going to a lender for pre-approval of your investment loan. You can then go looking for properties with confidence and knowledge.

Know your costs ongoing

Property can be expensive – Council rates, insurance, maintenance and if you are in a strata property there are strata fees. When you are renting out your property you need to keep on top of maintenance and ensure that the property is in a great condition for tenants.

Know the areas

Buy in an area that will have growth. If you are going to be renting out your property you want to make sure that there is a good demand for rental properties. Looking for a property that is close to transport and schools will give it more appeal.Tips on investing in property

Know your investment goals

Are you looking to flip the property – renovate and sell? Or are you looking to hold the property long term?

Know the mistakes to avoid

It is very easy to get carried away so here are some things to remember

  • Do your due diligence
  • Decide based on facts not emotions
  • Try to stay under your borrowing limit
  • Research the location
  • Don’t rely on rental income to cover everything, you may have unexpected costs
  • Know the tax deductions you may gain
  • Realise that property is usually a long-term strategy

Happy property buying – Nicola, Select Conveyancing Lane Cove.

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Buying a Unit Checklist

For many people buying a unit is an affordable way to get into the property market. Units are also great if you are not interested in looking after gardens and lawns. They are perfect for people with busy lifestyles and if you are planning on living close to the city centre they are much cheaper than a house.

All units will vary in size and the facilities that are included can come with hidden costs. Here are a few areas to consider when you are buying:Buying off the plan

Strata Fees

Strata fees are an ongoing cost when you buy a unit. Strata Fees are levies which are generally paid quarterly to cover the cost of repairing and maintaining the units blocks common or shared areas. You will pay based on the square meters of your unit and the expenses of the property. If the property has a pool, gym, lifts etc. the fees can be quite costly.

  • What are the owner’s strata fees
  • Is there a maintenance fund
  • Is there an ongoing debt
  • Are there any planned building works

Owner’s corporation

  • What are the pet ownership rules
  • Common area rules
  • What are the meeting requirements
  • Ask if you can view minutes from a recent meeting

Nearby Facilities

  • Is there a local park
  • Nearby shops
  • Restaurants, cafe’s and bars
  • Public Transport

Parking & Storage

  • Does your property have a car space or garage on the title?
  • Is it single or double?
  • What storage do you need?

Neighbours

  • Ensure you walk through the property prior to purchase.
  • Ask about the number of renters to owners within the property.
  • Does it seem noisy, smelly, messy, dark!
  • Is it a security building?

Structure and layout

  • Check for any cracks, mould or broken sealants.
  • What are the walls made of and are they insulated well?
  • Is there carpet or floorboards?
  • Remember that renovating a unit is not always easy and changing the layout is rarely possible.

At Select Conveyancing, we are here to help you through the buying or selling process – Contact us to discuss your needs.

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What is a sunset clause

Have you heard the term – Sunset Clause?

Did it leave you asking…

What is a sunset clause

To put it simply – It is a time limit that is put on the validity of the contract. Therefore if the settlement has not taken place by the end date both parties can legally walk away from the contract. Plus the buyer is entitled to receive their deposit back in full.

It is used commonly in 2 ways

Off the plan – The clause in an off the plan purchase states the date when the developer must finish the project. It also states that if the project is not finished by that date the buyer can walk away and get their deposit back in full. In most cases, this date is well outside the expected time frame and allows for common building delays.

Conditional sale – A buyer may make a purchase that is conditional on the sale of their current home. Here the seller inserts the clause date so they can decline the deal if the buyer takes to long to sell their home. What is a sunset clause

Are there risks

There have been a few cases where developers have deliberately run over time so they can terminate the contract and attempt to resell at a higher price. There has been new legislation put in place in NSW to stop this abuse.

Do your research

As with all purchases of property you need to do your homework. If you are purchasing from a developer, make sure you look into their track record and industry presence. What are their past projects, see if you can contact people who have bought off them in the past and visit other locations they have developed.

Make sure you have a conveyancer look over the contract before you sign just so you know that you have not missed anything important beyond the sunset clause.

Contact Nicola @ Select Conveyancing for your next property purchase or sale.

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Buying off the plan

Are you considering buying off the plan for your next property?

While it can be an exciting way to secure a home – How do you know if this is going to be the best choice for you? Buying off the plan

The Process

The thought of buying a property before it has been built is exciting and the fact that you will have a NEW never before living in home is even more exciting.

It can be cost effective as developers usually only require a 10% deposit but may be as low as 5% or as high as 20% and then the balance will be paid on the completion of the build.

Are you familiar with interpreting plans? Will the rooms be big enough? Will you be purchasing in a good position of the building if you are looking at apartments.

If it is an investment – what is the market going to be doing in 12 to 18months times when the build is complete?

The Positives

Stamp duty may be discounted, depending on when you buy. If construction has not started then the stamp duty is payable in the land value and not the finished property.

Getting in early may mean that you secure a great deal as developers need to sell a certain number before they can gain the finance they need.

Often the property increases in value while it is being built as the price of property grows over 12 months or more of construction.

The Negatives

The developer may not actually manage to get the build complete and you may lose your deposit if they happen to go bankrupt. Make sure you gain legal advise and do your research about the developer.

Often lenders will not fully approve your finance until the build is complete.

The final product may not be what you expected when you purchased off the plan.

Conclusion

Buying off the plan is not for everyone. It can be better suited to investors who have time to wait and as they are not planning on living there, the process can be better. Saving on stamp duty and the potential of the property increasing in value are two big positives.

Ensure that you get good advice and do your research before you commit to any purchase.

Contact Nicola at Select Conveyancing if you have any questions.