Sep 26

Parents who help to buy investment property at no cost!

By Hugh Frame | best investment, Financial, Home Loans, Market, Mortgage, Property Research | No Comments

Parents who help to buy investment property at no cost!

More and more we are coming across parents who help to buy investment property at no cost. If it’s not a first property investment, then sometimes it is a first home buyer getting that extra assistance from mum and dad – and it costs the parents nothing!

The big risk the parents do take is that the children are not trustworthy or that something happens in the children’s work and they are unable to support a mortgage with a lower income. However, most risk can be covered by insurance.

So how does this all work? Simply, the parents become the guarantor for the loan. A guarantor undertakes to pay another person’s loan should they be unable to. Most lenders give home-buyers who do not have a big enough deposit the option to have someone guarantee the loan. With some available loans, the deposit for a new property is held against the value of the guarantor’s home meaning that NO cash deposit is necessary and NO mortgage insurance is payable as the new property is secured against the parent’s home.

If advice was sought before entering into such a contract, it would probably be suggested that the borrowers ensure full risk coverage through appropriate insurances. Today, this could even cover the risk of a borrower being made redundant. Exposure for the guarantor can also be limited and in many cases after $50,000- $60,000 is paid-off the mortgage, or the property grows by that value, the guarantors can be removed by the lender as the guarantor of the loan.

The guarantors (mum and dad) are putting their home at some risk for the sake of their children. What they are giving their children is absolute trust in that they will do the right thing and stick to the terms and conditions of their loan. Mum and dad are not actually putting their hands in their pockets and giving funds to help the children up on to the first rung of the property ladder. It’s a great way for parents who help to buy investment property at no cost to them. Lime Property Solutions can place you with brokers who can fully assist in the loan process. Read more: http://www.smh.com.au/money/-grlrgz.html

Jul 26

1

By Hugh Frame | banking, best investment, finance, Home Loans, Mortgage, News | No Comments

The best investment loan is not the cheapest

As interest rates continue to fall and the prediction being they may fall even further next month, many borrowers and investors are considering changing lenders to take advantage of even cheaper rates; the issue that must be considered, particularly for active property investors is that the best investment loan is not the cheapest!

The lowest investment loan is not usually the best for your investment property

There are now over 1000 different home loan/investment loan products in the Australian property market and trying to work through them is even trickier than trying to find the best mobile phone plan to suit you.

The three areas we believe a property investor should be concentrating on are:-

Flexibility – a loan that will allow you ‘movement’. If you decide to move house, or borrow some money for renovations or another investment property, or need to reduce your repayments while the kids are at high school a no-frill loan generally won’t have the redraw facility and you need. In particular you will need sub-accounts, some which will be fully tax deductible, and some that will have no tax deductibility.

Interest rate – we are not suggesting that this is not important, it obviously is. However, a good broker nearly always negotiates a very favourable discount from the advertised rates so working through the advertised rates only can be unhelpful.

Off-set accounts – These can be a great feature. Funds deposited in a standard interest bearing account you will probably earn less than 1.5 per cent a year and interest is normally taxable! However, when you deposit money in an offset account the interest credited should be the same as that charged on the investment or housing loan.

Your Lime property investment consultant will explain how an investment loan would potentially impact your financial circumstances. Working with a highly experienced property investment Mortgage broker can help you to explore the implications and perhaps structure your loans in a way that your home mortgage may end up being paid off much faster than you ever thought possible. This type of structure is not possible on a very low interest ‘no frills’ loan so The best investment loan is not the cheapest! Read more : http://goo.gl/f08Ha1

Jul 06

0

Are you ready for your next property investment?

By Hugh Frame | banking, finance, Financial, Home Loans, News | No Comments

Are you ready for your next property investment?

It’s a new financial year, you really need some tax relief, you want to start accumulating wealth for your future and you have decided to buy another investment property, but are you ready for your next property investment?

The first thing you should probably do is test out your borrowing capacity and ensure you have the funds to go ahead to make sure you are ready for your next property investment.

It’s a good idea to check your credit rating before applying for your next property investment loan

It is surprising that only 29% of Australians have ever checked their credit rating and yet it is possible to do this free of charge once every year.

It is also surprising, as we have seen with a couple of clients in the last year, that your credit rating may be a lot worse than you imagined, simply because you have been managing your finances too well! Your credit rating can be affected simply by considering a change to loans, looking for new loans and switching loan providers. It would seem that the credit rating system views people who are often changing loan providers or credit cards as ‘high risk’ as they may be constantly changing because they are under financial presure to pay their bills. Very often people are changing just to manage their financial position better and have had no problems or late payments at all and yet their credit score is being lowered.

It is also surprising for some to find out that a small problem they had a few years ago and which has been forgotten about after it was cleared up, still have this period reflected in their credit rating.

Sylvia Pennington of the SMH gives us five tips to ensure we use this new financial year to clear up any problems we may have with credit rating agencies. It’s always possible that something may be on your credit record that should not be there and you can appeal. So follow the tips below and ensure that you are ready to buy that next investment property.

Tips for a glowing report

Credit reporting agencies, including Veda, Dun and Bradstreet and Experian, offer consumers a free copy of their credit report every year. Here are some tips to keep yours healthy.

Check your record for defaults and pay any outstanding debts.
If personal data or debts are incorrectly listed, contact the credit agency and the creditor to have them amended or removed.
Establish direct debits to ensure your bills and loan repayments are on time.
Don’t make unnecessary applications for credit – too many inquiries in a short period can indicate you’re in financial distress and send your credit score south.
Prevent debts becoming defaults by alerting creditors early if you’re having trouble making payments.

Lose your credit rating without even knowing

By Hugh Frame | banking, finance, Financial, Home Loans, Mortgage, News, Research | No Comments

Lose your credit rating without even knowing

How can you lose your credit rating without even knowing that you had done anything wrong?

Cartoon by Michael Mucci
Banks seem to have us where they want us

Just a couple of weeks ago we had a new client with a very stable well-paid government job, excellent equity in an investment property, owing nothing substantial to anyone apart from his very manageable investment loan and looking to buy another property but to our astonishment was actually rejected by the first lender approached on his behalf. Another lender was approached and the client had no problem in getting the loan after “the problem” was fully explained.

….. So what was ‘the problem?’ Quite simply, he had approached a couple of lenders by himself over the last year to see how much he could possibly borrow. In his search, he had found very good lower rate deal and switched his loan – no problem. While he was doing this, he took advantage of a couple of really good interest free deals on a couple of credit cards, something that is encouraged by our government and some financial planners, “If you’re not happy with your lender, shop around and move” and why not take advantage of interest free periods on your credit card?

This all seems sensible and very reasonable, until he applied for a new investment loan only to discover that his credit rating had been lowered considerably to the point of him being a bad risk! Like the author of today’s SMH story our client had never defaulted or been declared a bankrupt and had been in well-paid secure employment for over 10 years. His rating was below 700. The ratings are done on a scale from 0-1000, excellent is 800-1000; very good is 700-799; good 625-699; OK 550-624 and below average was zero-549.

The problem? … every time he applied to a credit-card provider for a new loan or a new card, an inquiry was made to the credit data base and each inquiry, while not raising any concerns, stays on your credit rating and affects your credit rating!

The marks you get because you have changed your loan provider or applied for a new credit card stay on your credit rating for five years until they are rolled over.

Michael Evans conclusion to the article he has written about his own credit rating is,

“In a system where the major financial institutions have significant pricing power, credit score cards can feel like they’re stacked against customers trying to encourage competitive behaviour.

Trying to get one back against the banks comes with a cost, and it’s not always in the fine print.”

I agree, and it’s well worth your time to have a look at the full article on this link: http://goo.gl/Uv6eUz

May 17

0

Negative Gearing proposed change by Labor would be a mistake

By Hugh Frame | best investment, Economy, Home Loans, Investment, Negative Gearing, News, Property Research, Real Estate | No Comments

Negative Gearing proposed change by Labor would be a mistake

Negative Gearing proposed change by Labor would be a mistake according to John Symond of Aussie Home Loans fame.

Aussie John has been taking it on the chin as he is being seen as having done a u-turn on the issue. Basically this whole story is based on the fact that no one in this democracy who is in the public eye should ever be permitted to change their mind. Aussie John has just committed this terrible sin!

Negative Gearing Proposed change by Labor would be a mistake – Aussie John

When we look at the context of Mr Symond’ apparent u-turn, it makes the circumstances of his turn around even more understandable. Placed on a panel on ABC the entertainment programme Q and A way back in 2013, Mr Symond was asked by a single mother in Perth about what could be done with negative gearing to assist people like single mother’s get on to the property ladder? Perth was having a long interrupted run in the mining boom and house prices in Perth had gone up by over 200% in the previous 10 years. “Aussie John” did suggest in a sympathetic manner that maybe a look at negative gearing and all of the Australian taxation system may, in fact, help.

Three years later, mining boom well over, an Australian Economy not doing too badly after our mining boom thanks mainly to our hugely increased residential construction industry, the hot topic of the day being negative gearing and the effect it may have on the Australian property market if changed and a leading figure in our residential lending area is asked to comment on the topic ……. plenty of time to think and analyse in a pretty different financial environment from 3 years ago and HE CHANGES HIS MIND!

Is this really a story of deceit and unreliability? Or maybe it’s just a story of an experienced property person understanding a changing market – after all, that’s how he really made his millions, understanding a dynamic market! He is not an elected representative promising not to introduce a carbon tax or promising to make no cuts to the ABC budget, he’s a highly successful and clever property guy who really understands what slight changes in our economy can do to a very dynamic market place.

Mr Shorten, instead of criticising this man for supporting one political party over another, maybe it would be better to listen to what he has to say and act on his advice.

First Home Buyer’s assistance

By Hugh Frame | Economy, finance, Financial, Home Loans, Market, News, Property Research, Real Estate, Research | No Comments

First Home Buyer’s assistance – The state gives a leg-up into home ownership

On the East coast we all know about the first home owner’s grant and the State assistance given with stamp duty but in the West first home buyer’s assistance can include the state gives a leg-up into home ownership by taking a share of the new property!

First Home Buyer’s assistance in WA

Kelmscott in Perth is one of the many properties in the scheme

During the mining boom as property shot up in value in WA, a new State scheme was sponsored by the WA government. Singles earning between $50,000 and $70,000 a year and couples earning less than $90,000 a year can buy a house, with the state government as a ‘silent partner’ paying up to 30 per cent of the cost.

Over 1000 West Australians on ‘modest incomes’ have partnered-up with the government to buy new homes under a revitalised shared ownership scheme.

The owner may have an 80/20 or even a 70/30 mortgage with the state government of Western Australia. The owner only pays mortgage on the remaining amount and can buy back the government’s portion at anytime in the future. The home is entirely the owners, free from inspections or any other type of tenancy rules.

The properties in the scheme are freshly built and range from one-bedroom units to four-bedroom homes spread throughout Perth suburbs hat include sought-after suburbs such as Subiaco, with some also available in regional centres like Albany and Bunbury.

The scheme was instigated in 2011 after the rapid rise in house costs paralleling with the mining boom which forced many moderate income earners out of the market. That coincided with the 2010 peak in the number of people waiting for WA Department of Housing rentals at more than 24,000.

The scheme is well received in WA and is an obvious real assistance to young people trying to enter the housing market for the first time. I’ve never heard any politician in NSW mention this scheme. Is this something that Sydney could consider to really help the first home buyer with a real foot-up? Full story: http://goo.gl/VbI8hg

Apr 04

0

Young Investors or Fools!

By Hugh Frame | best investment, Economy, Home Loans, Investment, Negative Gearing, Properties, Property Solutions, Real Estate | No Comments

Do Gen X and Gen Y Really “Need their Head Read?

Young Investors or Fools – Do Our Younger Population Pay More Because of Ignorance?

Interesting debate in the headlines of some of our national newspapers today, my question is are they Young Investors or Fools?

It’s all about a group that I used to be a member of, our under 30’s. Basically they are getting very little of the $40 billion in tax benefits being shared by the older demographic cohorts!

young-investors

Young Investors or Fools?

The basic cause of this very unfair treatment of our younger workers may well rest in their own ignorance. In the words of the late Kerry Packer, “If anybody in this country doesn’t minimise their tax they want their head read”. For those younger generations who want to know a little more, Kerry was the father of James Packer. Kerry died a few years ago as Australia’s wealthiest person. It’s worth having a look at this infamous committee appearance by Kerry into corporate tax. See more here: http://goo.gl/llfSvw

The news article today tells us, “It is overwhelmingly older, wealthier people who access the breaks to buy and sell properties and to park income at discounted tax rates.”

Lime Property Solutions has many younger clients who do not need their head read. Instead of throwing up their hands and shouting “UNFAIR!” they have contacted Lime and found out how easy it is to buy an investment property with relatively little saved or with nothing saved and good trusting parents who are prepared to give a guarantee. Just so many don’t know because they don’t bother to find out!

Have a look at the Kerry Packer link above. Here is the full statement,

“”I don’t know anybody that doesn’t minimise their tax,” Mr Packer growled as he stirred his delicate parliamentary china cup of tea with a teaspoon.”I’m not evading tax in any way shape or form. Of course I’m minimising my tax. If anybody in this country doesn’t minimise their tax they want their head read. As a government I can tell you you’re not spending it that well that we should be paying extra.” To read today’s full article go to: http://goo.gl/dScY0Z

Follow us on Face book: https://goo.gl/qlVppi

Twitter: @LimeProperty1

~ Lime Property Solutions

Apr 04

0

Fastest Price Growth in Australia

By Hugh Frame | best investment, Economy, Financial, Home Loans, Investment, News, Properties | No Comments

Price Growth the Highest it’s been in 8 Years!

Number of Property Sales Approaching All-Time High

Price growth to Continue

Economy Witnessing Rapid Expansion

These ‘Headlines” are true but you really have to read between the lines to see and understand them.

Instead you get to read,

” The boom time is over for house prices in Sydney and Melbourne, with top economists from our major banks and universities projecting prices will rise by less than 3 per cent across both cities in 2016.” –

http://www.smh.com.au/business/the-economy/businessday-economic-survey-what-will-happen-to-house-prices-in-2016-20160127-gmfolm#ixzz3yslpWtTh

price-growth
…… Or if you really want some cheering on the same day’s media you can read

“The latest Sydney weekend auction market results are sobering for both buyers and sellers.”

http://www.domain.com.au/news/lowest-january-auction-results-in-10-years-20160131-gmiayu/

Keep looking and reading and you can clearly see these stories are for local Sydney consumption are both are only discussing the Sydney or the Sydney/Melbourne housing markets.

There are always opportunities somewhere in Australia to make excellent gains in property investment. If you do read between the lines in much of the media we see in Sydney at the moment, the articles often point to the fact that Brisbane is growing! So if you do want to read some more positive commentary on the current housing market, you may have to start reading the Courier Mail or some of the other Queensland –based newspapers.

~ Lime Property Solutions

Apr 04

0

Brisbane Market Growing

By Hugh Frame | Home Loans, Investment, Market, Properties | No Comments

Sydney Residential Property Prices Drop 3.1% over the December Quarter

Since early 2010 the Sydney property market has been on a growth cycle. Most of the growth up until mid 2012 was around the CBD and inner suburbs.

After a slight drop in median price in mid 2012, the housing market has had phenomenal growth all over the Sydney basin. However, after three years of soaring property prices in Sydney, house prices have fallen by the largest quarterly drop on record.

Sydney’s median house price dropped 3.1 per cent over the December quarter 2015 according to the Domain House Price Report released last Thursday.

It’s what Lime property Solutions has been forecasting for the last 18 months so it shouldn’t come as any surprise to our clients.

The good news of course, is that the Brisbane house market is still moving upward from its slow growth start back in late 2013.

Read full article at: http://www.domain.com.au/news/sydney-house-prices-drop-3-per-cent-domain-group-20160127-gmd7pl/

~ Lime Property Solutions

Apr 04

0

Change Your Home Into The Best Investment Ever?

By Hugh Frame | best investment, domain, Home Loans, Investment, News, Properties | No Comments

Is It Really So Easy to Buy the Best House? Or Change Your Home Into The Best Investment Ever?

According to a recent article posted on domain.com.au we can all live in a much healthier home by doing eight very simple little things – according to science!

investment

What really attracted me to this article was the fact that I do really like to think that I am somewhat in control of my health and well-being but I am also pretty de-motivated at the thousands of articles I read that suggest I should be doing a lot more exercise or going on to one of the latest fad diets. Either of these suggestions (if implemented) does not make my home “healthier’; in fact either could create depression if implemented!

So maybe I could try all of the following?

Here are eight ways to make your home instantly healthier.

Dine with coloured dinnerware
Turn down the thermostat at night
Wash your linen weekly
Add a mirror to your dining room
Create a charging station (Are we really so connected today??)
Downsize bowls and glassware (Ok – there had to be something about diet or size of proportions!)
Add greenery
Build a home playlist

Full explanations of the above can be found in the full article; http://www.domain.com.au/news/eight-simple-ways-to-create-a-healthy-home-according-to-science-20160125-gmdwwh/

Follow us: www.facebook.com/pages/Lime-Property-Solutions/138210849608998

Twitter: @LimeProperty1

~ Lime Property Solutions

Home Loans

Parents who help to buy investment property at no cost!

Are you ready for your next property investment?

Lose your credit rating without even knowing

Lose your credit rating without even knowing

Negative Gearing proposed change by Labor would be a mistake

First Home Buyer’s assistance

Young Investors or Fools!

Fastest Price Growth in Australia

Brisbane Market Growing

Change Your Home Into The Best Investment Ever?

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