How To Save For A House Deposit

When it comes to how to save for a house deposit, the good news is that you can have your smashed avo and eat it too – so where do you start?

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It’s no secret that it’s getting harder and harder to get into your first home. The domino effects of Covid-19 have well and truly shaken up the Australian economy, but the good news is that the Morrison government wants more Aussies to actively participate in the nation’s property market, and particularly younger Australians. While the grants, interest rate cuts and monetary incentives are great, the primary issue remains the same – how do you save all that money for a house deposit?

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Five Tips On How To Save For A House Deposit

The reality is that in order to save meticulously for a home deposit, not everybody is in the position to move back in with their parents. Thankfully, there are plenty of other methods available when it comes to tweaking your lifestyle to achieve your financial goals. 

Reign In Your Spending – Saving for a house deposit doesn’t mean giving up your entire life. Instead, try making some changes like swapping a boozy night out with friends for a dinner party at home, or cancelling your gym membership in favour of going for hikes and walks in the great outdoors. 

Get On Top Of Debts – Consolidating your debts is one of the most straightforward ways to get on top of existing loans or debts, and ultimately lowering your interest rates. One credit card stashed for emergencies isn’t going to make or break your chances of a loan approval, but a large car loan or multiple miscellaneous debts might. 

Start Saving And Set A Timeline – Be realistic with your saving goals, and start small if you have to – even $50 a week is better than nothing. Open an account that you can’t touch or transfer funds out of easily such as a term deposit, and watch your nest egg grow. Set goals with how much you want to save by, so that you’re accountable for the results. 

Increase Your Income – While cutting down on your living expenses sometimes doesn’t leave much wriggle room for potential savings, increasing your income is an alternative that doesn’t necessarily suck all the fun out of your lifestyle. If you have a creative pursuit that can be turned into a side hustle – go for it. Even a few shifts a week as an Uber driver can help! 

Look For Bonuses – The federal and state governments of Australia want you to buy a house, as you’ll directly impact the economy in a positive fashion. Consider monetary benefits available such as the First Home Owners Grant, HomeBuilder Grant or even the First Home Owners Deposit Scheme – they are in place to help you, and it all adds up. 

Need Further Help On How To Save For A House Deposit?

Buying your very first home – and obtaining the finance to do so – can be a time consuming and stressful exercise. The good news is that it doesn’t have to be. 

When it comes to navigating the property world, knowledge is power – so why not book yourself into one of Madd Loans’ free First Homebuyer Workshops? Conducted completely online in a webinar format, George and the team at Madd Loans run participants through the world of finance when it comes to your first home loan. This digital model provides flexibility if you’re trying to work around your employment, and is also conducted in a #CovidFriendly manner. 

Since their inception in 2012, Madd Loans have worked tirelessly in providing over 1700 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, George takes great pride in making the mortgage process both fun and educational – and he has a swag of awards to prove it. 

During the free online workshops, George shares his tips, tricks and even his own mistakes along the way to ensure that you get pre-approved the first time, and gives participants the tools to fast track them into their dream home. It’s worth noting that attendees are under no pressure to follow the process with the team at Madd – the concept is simply to pass on the Madd financial knowledge to buyers so that they feel empowered throughout their journey into their first home. 

If you would like to learn more about learning how to save for a house deposit and the other things involved with buying your first property, please contact the team at Madd Loans today to book in your place at the next free First HomeBuyer Workshop. 

Madd Loans is Expanding!

Even during the middle of a global pandemic, George Samios and the team at Madd Loans are showing no signs of slowing down.

Madd-Aspley

Established in 2012, the Madd mission has been to create raving fans from both our clients and our staff through exceptional customer service and strong industry relationships. Our team are the foundations that have built Madd into an industry powerhouse, and we take great pride in our staff retention ratings, education opportunities and career progression.

George describes the business as being built on referrals, and consumers will have a hard time finding a more innovative or dedicated mortgage broking centre in South East Queensland. In fact, George has a swag of awards to prove it, along with features on “Ready, Set, Reno!” and numerous television broadcasts. By providing a memorable and fun experience for consumers navigating the realms of finance, George has stuck to this simple formula in order to maintain and elevate his brand to the best that it can be.

“Our method is simple – give the client a Madd experience. We have an exceptionally strong team who provide a service that is engaging, fun and stress-free. This has created a compound effect, whereby our clients continue to recommend Madd Loans to their family and friends.”

Even before the arrival of Covid-19, George thought outside of the box in order to provide free, educational and ultimately invaluable information to audiences via digital content. From producing free webinar style workshops for first home buyers, regular online blogs that simplify the realms of finance, and even jumping on YouTube to give his thoughts and advice on market updates. By having a strong online presence, the team at Madd Loans have become a trusted authority on finance, and an easily recognisable leader within their industry.

After eight years in business at the Seven Hills office, the stars have aligned for Madd Loans to expand into Brisbane’s northside. With the new office conveniently located in Aspley, it made sense to select a location close to the busy hub of Westfield Chermside and Gympie Road to spread the “Madd” experience to new and existing clients in all corners of Greater Brisbane.

In order to keep the event #CovidFriendly – the official opening of the Madd Loans Aspley office will be celebrated virtually, with the ribbon cutting being live streamed via Facebook on Wednesday 14th October.

Although the Seven Hills office will be sad to see mortgage broker and credit analysts Costa and Cathie move into the new branch, it also provides an exciting new opportunity for four new staff to join the Madd team.

In order to succeed at Madd, the core values instilled in all staff include:

  • Always doing the right thing
  • Providing the ultimate customer experience
  • Be warm and welcoming
  • A focus self improvement and education
  • Ongoing support and being a part of a real team
  • Fun company culture and being proud of where you work

When they’re not busy making mortgages fun, George and the team at Madd Loans can also be found fundraising for local community sporting clubs, and embracing their role as a major sponsor for the annual Greek Paniyiri Festival. Working at Madd Loans is not just a job – it’s a lifestyle – so please get in touch with us if you have a passion for finance and making a real difference to the lives of ordinary Australians.

2020 Budget Updates: Homeowners & First Home Buyers

The Federal Budget 2020 announcement yesterday had many Aussies on the edge of their seats in anticipation – but what do the changes mean for homeowners? 

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The numbers coming out of the Bureau of Statistics confirmed the March quarter’s 0.3% decline, meaning Australia’s economy has gone backwards for two consecutive quarters. What this means for us as a nation, is that we’ve entered a recession for the first time in thirty years. 

With the economy facing unprecedented pressures thanks to the arrival of Covid-19, the Morrison government are aiming to slow the financial freefall – and ultimately, get Aussies spending again. 

Although the Federal Budget is traditionally released in May each year, the announcements were delayed until Tuesday 6 October. In an effort to get Australia’s economy moving, Treasurer Josh Frydenburg has fast tracked tax cuts, relaxed terms and conditions around government grants, and infrastructure upgrades in yesterday’s press release. So what are some key takeaways from the Federal Budget 2020, and what does that mean for homeowners in Queensland? 

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Federal Budget 2020: Key Takeaways For Homeowners 

Like any annual Budget announcement, there’s always winners and losers. The good news is that this time, all you need to do is pay tax in Australia to be better off this year. 

Hefty Tax Cuts – While the list is extensive, the winners are low and middle-income single earners earning up to $120,000 a year, as they will be taxed $2745 less than they normally would be. With further cuts being brought forward from their original date of July 1 2022, the government have also announced that the tax breaks will also be backdated from July 1 2020. The concept is to allow more funds to stay in your pockets, to funnel back into the economy. 

First Home Buyers Grant Relief – Adding onto the success of the original scheme, an additional 10, 000 First Home Buyers Grants have been added to the pool. The increase on the maximum purchase price has been lifted all around Australia, allowing more first home owners access to acquiring a newly constructed home with as little as 5% for a deposit. Along with keeping the property market intact, it’s also going to benefit trades around the nation. 

Less Red Tape For Granny Flats – Building a granny flat for an elderly relative will be cheaper from July 1 2021, as capital gains tax will no longer have to be paid so long as a formal agreement is in place. While it won’t apply to commercial renting arrangements, the relaxation on the relevant legislation will allow Aussies to extend and ultimately add value to their existing home or property. 

The JobMaker Scheme – The $74 million JobMaker Scheme is a core component in guiding Australia’s economic recovery, and encompasses a broad range of grants and incentives. Some of these include the introduction of the JobMaker Hiring Credit (incentives for businesses to hire young people aged 18-35), wage subsidies for taking on new apprentices, and significant infrastructure investments to create employment opportuntiies. 

How To Reinvest The Federal Budget 2020 Tax Cuts

The tax cuts and relief introduced by the Morrison Government were carefully crafted in an effort to stimulate Australia’s economy – meaning confidence in business, getting consumers spending, and stabilizing the property market. 

If a new property is something that you’ve been considering – whether it be as a first home owner or perhaps a secondary investment home – then it may be time to speak to the professionals. 

Since their inception in 2012, Madd Loans have worked tirelessly in providing over 1700 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, owner George Samios takes great pride in making the mortgage process both fun, educational and stress free – and he has a swag of awards to prove it. 

An independent operator can be your greatest asset when it comes to navigating loan options, as brokers are there to make you happy – not the banks. To speak to a Brisbane based mortgage professional, please get in touch with the team at Madd Loans today to help turn your financial dreams into reality. 

Why A Buyers Agent Is An Investor’s Secret Weapon

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Want to take the stress out of trying to navigate the property market? Then deploying a buyers agent to do handle the leg work could be just what you need. 

Despite public opinion, the services available through using a buyers agent aren’t just for the rich and famous. Most sellers engage a real estate agent to represent them (and their best interests) to sell their property – and yet, it’s far more uncommon for buyers to do the same. 

Whether you are short on time, looking to buy from interstate, or simply need help with getting through your buyers “to-do” list, a buyers agent will help you to source, inspect, negotiate and (ideally) close a property sale based on your specific requirements.  Using one has become an increasingly popular option for buyers looking to purchase an investment property, as their unique insights and connections can help you to hone in on the best possible capital growth opportunities. 

What Are The Benefits Of Using A Buyers Agent?

Find Property Faster – As we all know, time is a currency in itself, and if you don’t have enough of it on your hands – then the services of a buyers agent can be invaluable. Along with time, they have the energy and resources that it takes to find the property that’s perfect for you. 

Remove The Emotion – Having a third party to keep you “in check” can help to ensure that you’re making sound financial decisions by using your head, not your heart. Sometimes what you want isn’t necessarily what you need, which a buyers agent can objectively point out to you.  

Accessibility – Did you know that an estimated 30-40% of properties are snapped up before they even hit RealEstate.com or Domain? Buyers agents have great pre-existing relationships with all kinds of real estate vendors, and many would prefer a quick sale over top dollar. 

Investment Knowledge – This is particularly important if you’re looking to by your second property as an investment or asset. Buyers agents have unparalleled insights into growth “hotspots” – even if it means looking at one suburb further than you initially planned to. 

Negotiation – Anyone who has ever had to barter over a property price knows that the process isn’t for everyone, and it can be exhausting – especially if you don’t have the confidence. A buyers agency knows when to go in hard in negotiations and when a light touch is needed.

Experience With Auctions – Particularly relevant for interstate buyers and if applicable, a buyers agent can represent, bid and close for you on auction days. By deploying their powers in negotiation, they can sniff out a bargain (or a disaster) a mile away. 

Where Do You Find A Buyers Agent In Brisbane?

George and the team at Madd Loans love referring to other Brisbane based businesses who they can see have a similar ethos and customer service ethic as Madd Loans.  

If you are looking for a buyers agent, Madd happily recommends Josh Sawyer over at Metropole as they only hear great things back from their client’s who have used Josh’s services. Despite receiving no financial gain from this, George has no qualms in recommending Josh for anyone looking for a buyers agent to assist in finding and purchasing their next property. When catching up with the team at Madd recently, Josh shared some of his latest insights into the Brisbane property market.

“We don’t necessarily target units, I’ll tell you why – ultimately, it comes down to supply and demand, which is the enemy of price growth. A lot of our clients are investors, and a lot of our home buyers actually want to achieve some sort of growth in the asset that they buy. The enemy of price growth is too much supply and limited demand. Now with units, you do have some strong demand, but you’ve also got endless supply. They just keep pumping out these massive buildings in a close range to the CBD, which unfortunately creates a little bit of stagnation in the market. We tend to focus on land content in good streets, in good suburbs. The most important element of that argument, is focusing on things that are scarce but also focusing on things that are in high demand.” 

Before committing to the services of a buyers agent, it’s important that you have a pre-approval loan under your belt. Otherwise, if thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality. 

How To Add Value To Your Property

With a spike in renovations and passion projects popping up all over Australia, it’s worth knowing how to add value to your property or home while you’re at it.

It’s no secret that we’re spending more time at home, and so it makes sense that a great deal of us are looking to improve our key spaces. Whether you are looking at selling in the near (or distant) future, when it comes to improving the overall value of your home or property, large investments on your behalf aren’t generally necessary in order to produce big dividends in the long term.

Are there solutions that are offered a guaranteed return? Some yes, others no – it often boils down to budget, location and the general style of the property. However, here are some key points to note if you’re about to give your home a facelift.

Eight Ways To Increase Your Home’s Value

1. Adding An Ensuite

If your home only has one bathroom, this can be a deterrent for potential buyers. Ensuite’s are becoming very common amongst homes in Australia, and adding one to your home will definitely increase its value.

2. Outdoor Living Spaces

Let’s face it, Aussies love a good barbeque. We’re not saying that you need to add a whole outdoor kitchen space, but it gets really hot Down Under in the summer months and how we live does change. Investing in a shaded deck, day bed and even an outdoor fan can go a long way.

3. Granny Flats Are Back

On auction day, this can add enormous value to an established home. Granny flats aren’t considered to be “daggy” anymore – their uses can range from an extra income, home office, teenage retreat, and even an independent home for elderly parents. The best part is that they are often a cheaper space solution than most initially think.

4. Refresh With Paint

When it comes to spending a little to achieve big results, a cosmetic facelift like a fresh coat of paint can work wonders to lift the mood of a home as well as modernising a space. Tackle one room at a time, and pay attention to colour palettes that offer longevity over fads or trends.

5. Presentation Over Location

People will travel for the right abode – how many times do we hear the phrase “up and coming area”? Whether it be installing a white picket fence, finishing’s or even furniture – the styling of a space has been proven to lift a home’s value, with a whopping 87% of real estate agents agreeing that styling plays an important role in resale value.

6. Kitchen Finishing’s

While the costs for a basic custom kitchen (including plumbing, electrical and tiling) can start from as little as $10, 000 – if you aren’t willing to spend that much, consider updating your splash back, handles and even the colour of your cabinets. Kitchens are one of the most important spaces that potential buyers look at first.

7. Storage And Functionality Solutions

This is especially relevant if your home is on the smaller side. Are the room functions rigid, or are they flexible. An example of this is a home office that also doubles as a spare room. Paying attention to storage solutions and a room’s efficiency can net a wider range of potential buyers.

8. Don’t Forget The Garden

If your interior is immaculate but the outdoor section didn’t get the same love, then the overall renovation isn’t going to have quite the same level of impact. Your garden shouldn’t require too much maintenance for potential buyers, but should also be warm and inviting. Ensure that pavements are clean, and debris is cleared before viewings.

Help! I Need Finance For My Renovations

The multi-award winning team at Madd Loans pride themselves on making mortgages and the finance realm fun. With a customer satisfaction rating of 98%, Madd can help to simplify the loan process in order for you to reach your finance goals faster. If you’re looking for tips on how to add value to your property, or weighing up options to fund your home renovation dream, book an appointment with George and the team today.

Rent vs Buy: What’s The Better Option?

Settling the age-old debate on “rent vs buy” will often come down to your individual set of circumstances, but what other pros and cons are there to consider?

“The Great Australian Dream”, or more simply, the path to owning a home, is not as straightforward as it once was. The three-bedroom brick home in the suburbs isn’t what the next generation can afford, nor necessarily want – and so, people adapt. The shift has included opting for apartments, granny flats, relocations into more affordable areas, and even long term renting as a preference for some.

When it comes to renting, like most things it often boils down to supply and demand. As Australia faces the economic fallout of Covid-19, many younger Aussies are making the pilgrimage back home to Mum and Dad. As of April 2020, this has led to an overall increase in rental availability, but a decline in the median costs associated with leasing a room or home.

If you’re weighing up your options when it comes to “rent vs buy”, even in times like these there are a few steadfast facts associated with each option.

Advantages And Disadvantages Of Renting A Home

Pro: Free Up Your Savings – Making a dedicated savings plan to buy a home can very much drain the “fun” out of your day to day life. If you don’t have this to worry about and your rent is reasonably affordable, renting can work out to be less expensive and more lifestyle friendly.

Pro: Flexibility – Hate your neighbours? Move. Need a home office? Move. Want a bigger yard? Move. Providing you are aware of your lease term and obligations, renting allows you to pick up and move to a new home with far less paperwork and overall costs. 

Pro: Upkeep Is Not Your Problem – There are some pretty significant bills that can be avoided through renting, including rates, home insurance, general maintenance and repair costs. However, having a dud landlord or property manager can make the home’s upkeep a nightmare.

Con: No Investment Potential – If you were to pay off a mortgage, all that money poured in is yours. If you are patient enough to wait 20-30 years, your home will in turn become your greatest financial asset. Renters are paying off someone else’s home.

Con: Restricted Freedom – While you can pack up and move with greater flexibility, your landlord will generally dictate exactly what you can and can’t do in the property. This can include anything from cosmetic changes (painting the walls, hanging pictures) to strict “no pets” policies.

Con: Instability – Renters are often the ones that feel the crunches of property market changes. Your landlord or property manager may undertake evaluations, sell the property or increase the price of your rent (limited to once every six months in Queensland). That’s not forgetting the general inconvenience of regular inspections.

Advantages And Disadvantages Of Buying A Home

Pro: It’s Yours – Well, until you’ve paid off the mortgage it’s technically the banks, but still. There will be none of the insecurity that comes with renting someone else’s home – paint that wall yellow, have a cat, and (with council approval) do whatever you like. It’s yours.

Pro: It’s An Asset – Apart from having somewhere to live, the quest for home ownership is also about having a long term investment strategy. If we’re looking at it from the viewpoint of decades instead of months, generally house prices do rise.

Pro: Hello Equity – Equity is the portion of your home loan that you’ve already paid off, or own. This will allow you the opportunity to access further loans if that’s what’s on your radar, such as shares, a managed fund, or even a second investment property.

Con: Interest – It’s unlikely most Australians will be in the position to pay for their home outright, without getting a mortgage. If you’re borrowing money, you have to pay interest. Monitoring fluctuations is paramount, as it could add anywhere between 3-6% on top of your loan value.

Con: The Other Costs – Owning a home involves far more than just paying your mortgage every month. Let’s not forget about bank fees, council rates, insurance, body corporate fees – and that’s not even covering the costs associated with actually buying or selling a home (add 4-6% for things like legal fees, inspections, stamp duty etc).

Con: The Risks – If you don’t pay your rent, you’ll get evicted and blacklisted. Don’t pay your mortgage? Your home will get repossessed, and you’ll be stuck with a very damaging mark on your credit file. Home ownership is a big responsibility with the chance of big payoffs, but also involves bigger financial risks.

What Option Is Right For You

Generally speaking, and when compared to renting, owning your own home will set you up for bigger dividends in the long term. This generalisation is dictated by things like your financial stability, how secure your job is, where you live and what your credit history looks like.

If you’re thinking of taking the plunge into home ownership, the process can be extremely daunting – especially if it’s your first time. The good news is that it doesn’t have to be!

When it comes to navigating the property world, knowledge is power – so why not book yourself into one of Madd Loans’ free First Homebuyer Workshops?

Conducted completely online in a webinar format, George and the team at Madd Loans run participants through the world of finance when it comes to your first home loan. This digital model provides flexibility if you’re trying to work around your employment and is also conducted in a #CovidFriendly manner.

If you would like to learn more about navigating what’s involved with buying your first house, please contact the team at Madd Loans today to book in your place at the next free First Home Buyers Workshop.

Lenders Mortgage Insurance Explained

Lenders Mortgage Insurance is a term that generally doesn’t cause a great deal of excitement amongst home buyers – but what is it, and do you need it?

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Introduced to the Australian market in 1965, Lenders Mortgage Insurance (or LMI) was essentially designed to allow more Australians to enter the housing market, while allowing the lender to protect themselves in the event that you defaulted on your loan.

Typically, LMI is compulsory if you don’t have a 20% deposit for your home loan. In 2020, the median house price for Brisbane ranges from $550, 000 to $900, 000. Without the option of Lender’s Mortgage Insurance, buyers would be expected to save a whopping $110, 000 at the very least to purchase a property. This figure is simply unobtainable for many, especially first homeowners looking to get their foot on the property ladder.

Lenders Mortgage Insurance Explained

Lenders mortgage insurance operates on a sliding scale and varies depending on how big (or how little) your deposit is. Let’s look at some comparisons.

Source: Genworth 

While the thought of adding potentially thousands of dollars to your mortgage may seem daunting, Lenders Mortgage Insurance offers a glimmer of hope to those wanting to get into the property market faster – why pay rent, when you can pay off your own home? The amount of your LMI doesn’t need to be paid upfront, it can be capitalised into your loan, but be careful as the premium today may be $10,000, but over 30 years it will be significantly more with compounding interest.

There is a common misconception that LMI is designed to protect the buyer. However, it is in fact in place to protect the lender, in the event that the buyer was to default on their loan. Madd Loans owner George Samios helps buyers to navigate LMI on a daily basis and explains the logic behind it.

“What the banks usually want is for you to have a 20% deposit, or say a $100, 000 deposit for a $500, 000 loan. If you look at it on a scale, the bank has a certain amount of debt secured against your loan. If something were to happen to you or the repayments – and the bank did have to sell the property – even if they had to sell the property for $450, 000 at a loss, the loan amount is covered, and the bank isn’t losing any money on the debt.”

How To Avoid Paying Lenders Mortgage Insurance

While it may not be an option for some buyers, there are a few ways to avoid paying the Lenders Mortgage Insurance premium that accompanies loans with less than a 20% deposit.

Save For A Bigger Deposit – This may feel like stating the obvious, but it’s a straightforward one. On a national average in Australia, it takes 4.6 years for the average couple to save 20% for their first house deposit. This could vary depending on where you live. There is also the First Home Super Saver Scheme which allows first home buyers to make voluntary concessional (before tax) and voluntary non-concessional (after tax) contributions to their superannuation fund, to be used as a first home deposit.

Guarantor Loans – A guarantor mortgage loan is mostly quite similar to a standard home loan, only a selected guarantor (usually a parent or guardian) signs the loan as your “backer”, even though they have no rights over the property itself. If approved, guarantor loans can enable buyers to access loans up to 105% of the property value without needing LMI.

First Home Owners Grant – If you’re looking at buying or building a brand new home, and you meet the criteria you may be able to access the $15, 000 First Home Owners Grant. This can also be partnered with the recently announced HomeBuilder Grant, which can provide an additional $25, 000 – it all adds up!

Want To Know More?

Why not book yourself into one of Madd Loan’s free First Homebuyer Workshops? Conducted completely online in a webinar format, George and the team at Madd run participants through the world of finance when it comes to your first home loan. George shares his tips, tricks and even his own mistakes along the way to ensure that you get pre-approved the first time and gives participants the tools to fast track them into their dream home.

10 Hidden Costs When Buying A House In Queensland

Although hidden costs when buying a house can be unavoidable, if you are prepared and know what to expect – it can make the whole process much less stressful.

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Madd Loans owner George Samios has been in the mortgage business for over twelve years, so it’s safe to say that he’s seen his fair share of unwanted surprises when it comes to hidden fees or costs involved when buying a home or property. He stresses the importance of buyers not to get caught out in regards to the “extras” that come with taking out a mortgage.

“When you buy property, you have some pretty obvious fees like stamp duty – but you’ve also got a number of other government fees like transfer registration fees. There’s so many hidden costs that clients may not be aware of, which can add up into the thousands of dollars very quickly.”

So, what exactly should first (or second, or third) home buyers be aware of when it comes to unexpected costs associated with taking out a mortgage or loan?

A Breakdown Of Hidden Costs When Buying A House

Let’s go through some of the major costs that most buyers aren’t aware of – or simply forget about – when buying a house.

Lenders Mortgage Insurance – If you haven’t saved the full 20% deposit for your home loan, then lenders mortgage insurance is required. This fee is compulsory and is designed to protect the banks if you default on the loan. Calculated on a sliding scale, an example of this is that if you were looking at a property at $500, 000 with a 10% deposit ($50, 000) – expect your LMI to be $8000. While this may seem like a lot, it also helps buyers with as little as 5% to get into the property market faster.

Stamp Duty – This one is non-negotiable and is a state government tax issued on property purchases. The good news is that you are a first home buyer and living in the property in Queensland. The bad news is that if this is your second or third home, expect to pay around $8750 on a $500,000 home in Brisbane. This dollar amount depends on the value of your property, so it can fluctuate.

Government Fees – Essentially, this is about registering with the Queensland Government. The three major ones include Registration On Mortgage ($187), Registration Of Discharge On Mortgage ($187), and Registration Of Transfer (Property Title) – which can range from a few hundred dollars, to a few thousand dollars depending on the value of your property.

Council And Water Rates – This will be calculated depending on where you live, with the rates in Brisbane ranging from $1200 to $2200 per annum. You may need to rebate or refund the existing property owner if they have already prepaid their rates, before organising your own payment system to the council when you take over ownership.

Body Corporate (Strata) Fees – If you are buying a unit, apartment or townhouse – or basically anything that isn’t a standalone residence – then you will need to pay body corporate fees. This is a fee generally paid quarterly, to cover gardening, electricity, cleaning, plumbing and building maintenance. These costs can add up very quickly, so make sure you get a copy of the strata reports before you purchase a property with a body corporate stipulation.

Legal Costs – You’re going to need the assistance of a solicitor, legal professional or conveyancer to make a strata report (if required), conduct title searches, or to review a contract of sale. The latter isn’t an essential requirement in Queensland as we have standardised terms and conditions, with the costs generally ranging between $1000 to $2000 depending on how complex the transaction is.

Legal Fees on Buying a House

Building And Pest Inspections – This is a big one. You need to protect yourself against any potential structural issues with the property that may be invisible from the outside, along with any hazardous pest or termite infestations. When combined, these usually are between $500-$700 in Queensland.

Insurance – Building insurance, property insurance, and contents insurance are necessary evils – but are designed to cover you should anything go pear shaped. In Queensland, you often need this before you sign the contract of sale, as you would assume responsibility of the property.

Removalist And Electricity Connection Costs – Even hiring a truck to move your things from one side of Brisbane to the other usually sets you back around $500. Interstate moves could easily go into the thousands of dollars, so make sure this isn’t a cost that you forget about (as a lot of people generally do). If your property doesn’t have an established power connection, this can also run into the thousands of dollars.

Bank Fees – Although you might have your application fee waived, there are also other costs to consider like evaluation fees, settlement fees, and legal fees that may be hidden in the fine print. Unlike Madd Loans, not all mortgage brokers offer a fee free service, so ensure you shop around for the best fit for your circumstances.

RealEstate.com.au estimates that when obtaining a mortgage for a $500, 000 property in Queensland, it’s not unreasonable to pay between $12, 000 to $25, 000 in fees on top of your interest rate. The key here is to make sure that you’re aware of the costs that come with any mortgage, to ensure that there’s no unexpected surprises.

If you’re considering taking the leap into the property market, speak to the professionals at Madd Loans to simplify the process – we pride ourselves on making mortgages fun.

What are split loans?

Split loans offer a happy medium between the security of fixed interest and the potential lower rates of variable interest. By dividing up your mortgage, you aren’t putting all of your eggs into the one financial basket.

What-Are-Split-Loans

While we are unlikely to see negative interest rates released, they have now reached as low as 0.25% – an unprecedented decision by the Reserve Bank of Australia, to reflect these unprecedented times. Covid-19 has all but decimated entire economies on a global scale, and consumers are understandably wary of parting with their cash.

However, the Australian housing market has proven to be resilient. Housing prices have not gone entirely off the deep end just yet, and will likely be slower to react – meaning that Australians are still buying and selling homes, keeping the market relatively intact.

Why are split loans popular?

Madd Loans owner George Samios believes that split loans offer the best of both worlds in the realm of interest rates.

“There are pros and cons to fixed and variable loans, and that’s why we normally do offer a split loan option to our customers. My clients actually have both the offset account and redraw ability that comes with a variable loan, but they also have the security of a fixed loan.”

Although there are no limits with how much consumers wish to allocate to each portion of the split loan – for example 60% fixed, 40% variable, etc. What you are essentially doing is distributing interest rate movements, as well as the relevant risks that may apply or be associated with each feature.

How do split loans work?

Choosing a fixed or variable interest rate for your home loan often comes down to how familiar you are with the interest rate cycle (or not). This world can be daunting, particularly if it’s your first big foray into a large scale financial loan, which is where the option of a split loan may come in as a happy medium.

Let’s say that John borrowed $500, 000 for a home loan over a 30 year term. John fixed $300, 000 of his loan at 3.90% per annum for three years, or 60% of the total. By opting for a split loan, he kept the remaining $200, 000 (40%) on a variable interest rate at 3.59%.

His fixed monthly repayments for his home loan sit at roughly $1415, and the variable is $908, bringing his total repayments to $2323 per month.

After six months, John was notified that his lender was increasing it’s variable rate to 3.79% per annum, increasing his monthly mortgage repayments by $22 per month. If John had chosen to make his entire home loan a variable interest rate, he would have been paying an additional $57 per month.

However, if his lender had decided to decrease their variable rate to 3.40% per annum, John’s monthly repayments would have decreased by $22 per month.

The variable component of John’s loan also allows him to access features such as an offset account, redraw options, and unlimited repayments.

By opting for a split loan, John has both the security of a fixed interest rate (he knows roughly how much he is going to pay month to month without huge variances), but he also has the opportunity to be flexible as the variable interest rates tend to change. Sometimes they increase, sometimes they decrease, but he’s “in the game” while still protecting himself and minimising the risk of exposure.

Is a split loan right for me?

If you are debating the option of a split loan for your interest rate or mortgage requirements, there are some important factors to consider:

  • Is your personal or financial situation likely to change in the future?
  • Are you ready to fully commit to a fixed term interest rate?
  • Is your main concern stability and reducing the impact (and exposure) to potential interest rate fluctuations?
  • Would you prefer the option to make additional repayments, and a potential redraw facility linked to your loan?

A home or mortgage is often the biggest purchase in the lifetime of our clients, so we want to ensure that all Australians are permitted access to the option that’s the best fit for them.

If the above instigates more questions instead of answers, then perhaps it’s time that you booked in a free consultation with us at Madd Loans to weigh up your options – we pride ourselves on making mortgages fun.

150K Instant Asset Write Off – What you need to know!

With record low interest rates, the big banks are doing unbelievable equipment finance deals. This has been backed by the Australian Government’s $150,000 instant asset write off. Considering that this was previously limited to a maximum of $30,000 – it’s a huge incentive for businesses to get things rolling again.

150K-Instant-Asset-Write-Off-Madd-Loans

In terms of eligibility, the previous limit of $50 million in aggregated turnover has also been expanded to cover businesses turning over less than $500 million. This huge jump from the previous threshold will also no doubt encourage more businesses from all industries to stimulate the economy during the era of Covid-19.

Federal MP and Treasurer Josh Frydenburg commented last week that the instant asset write off was designed to support over 3.5 million businesses in Australia.

“These measures are designed to support businesses sticking with investment as they had planned, and are encouraging them to bring investment forward to support economic growth over the near term. The instant asset write-off also helps to improve cash flow for businesses by bringing forward tax deductions for eligible expenditure.” 

In accordance with the Australian Tax Office, the instant asset write off can be used for:
  • Multiple assets, as long as the cost of each individual asset is less than the applicable threshold
  • New and second hand assets

With the 2020 end of financial year looming and under two weeks away, there’s no better time to get your business finances organised – along with any potential new additions that may be long overdue.

Get in touch with us at Madd Loans for a free quote to see how we can best apply these incentives to your business. Whether you’re in need of a new work ute, tractor for the farm or even heavy machinery, some of our specialty loan services on offer include:

  • Car loans
  • Truck loans
  • General equipment loans

Please connect with us by requesting a call back, live chat with us online or simply schedule a free consultation. At Madd Loans, we work around you and your needs – we pride ourselves on our service, customer satisfaction and ultimately getting the very best deals available for our clients.

From buying your first home to refinancing, commercial or construction loans – our free service takes the stress out of getting finance. We offer our services Australia wide so why not reach out to us today. We’d love to hear from you.

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