Read more… or Read more right here… »

It would therefore be good for you to speak to a foreign exchange broker. These brokers specialise in getting clients an exchange rate that is far close to the interbank rate, therefore meaning your money goes a lot further. They are also able to offer you options that will protect you from adverse rate movements in the future. One broker even offers ‘Currency Options’ which are a hedging strategy that allow you to protect yourself from these negative rate movements in the future, whilst also allowing you to take advantage of the rate.

Even if you are living in Australia and need to send funds overseas for whatever purpose, it pays to speak to people who genuinely specialise in this area and focus on giving you the best possible rate.

When I moved my savings from overseas to Australia, I wasn’t using a bank - I was using a broker. My mistake, however, was to pick a small company because I was looking for the lowest possible fees. I should have thought about the reputation of the company and about the way they work, meaning efficiency, reliability, things we often forget about. As a result they’ve made numerous mistakes and I ended up losing a considerable amount which took me months to recover. They did repay me the losses I suffered because of their mistakes, but it took a lot of time, and in general was a nuisance.

For those of you who decide to learn from my mistakes, here is a recommendation - one broker who has a reputation for reliability, efficiency and competitive rates is World First. They also have offices in Australia, New Zealand and London which means they are available around the clock.
You can visit their website at www.worldfirst.com

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

Let’s face it - we spend a lot. Sometimes more than we should have. Sometimes more than we earn. And recession such as this one is a good time to re-assess our budget voluntarily, before God forbid our creditors come and make us do so. Or do we even have a budget?

Reacting to the global financial crisis, Choice released a report that IMHO is a must read for anybody, no matter how safe you feel right now money-wise. This report discusses quite a few important issues.

For starters, they say that we spend $160 for every 100 we make - which basically means that the majority of us live outside our means. And to think that only 10 years ago we spent only half that much!

This leads to the most logical conclusion - some belt tightening is in order. Here is how - in addition to the report, Choice have put together a calculator to help us understand where our money goes. It allows entering your income and all the expenses (nicely classified in categories) and shows whether or not your family is spending more than earning and on what.

But what do you do if it’s too late to make a budget, if your family is left with just one income or even worse, no income at all? Choice’s report says that the most important thing is to react fast, contact your lenders and see a financial counselor. I don’t know about you, but this was the first time I have ever heard about a financial counselor. Apparently they exist, are funded by the government and their job is to help you find the best debt relief solution for your family.

The report mentions a lot of options to help with paying bills: reducing the minimum repayments on mortgage (or even the interest!), a repayment holiday for people who lost their job, etc. I was surprised to learn that if you’re unable to pay your bills (such as energy bills or taxes), there is an option of contacting the billing company and asking for a flexible repayments plan. Another option they mention is a no-interest loan scheme.

And the most important thing - you should definitely seek financial counseling before signing a debt agreement with a debt relief company. Debt agreement is basically you saying to your creditors “I know I owe you a $1000, but can only afford to pay a $100 back.” and debt relief company arranges everything to freeze your debts, no more interest will apply and you will pay the agreed amount over a long period of time. As easy as this sounds, Choice says this is may not be the best solution for your situation and it will certainly harm your credit history.

Bottom line - Choice is saying this: you may be in debt and lost your income, but your still have consumer rights, the situation can be fixed and there are people you can see to seek help and solutions. Read the full report here and learn how.

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

The First Home Owner Grant

The First Home Owner Grant (FHOG) is 7000$, never mind what the property price is (if you buy in 2009). If you buy in 2010, the property must cost under 600K for you to qualify for FHOG. Find out whether you’re eligible or not here.

The First Home Owners Bonus

If you buy before the 30 June 2009, the Bonus is 3000 for established and 5000 for new homes, but the property must cost below 500K.

From 1 July 2009 on the Bonus is 2000 for the established and 11000 for new homes, and the property must cost below 600K. More about the Bonus here.

The First Home Owners Boost

This is the recent “injection” of free money which was made available October last year. If you buy before 30 September 2009 an established home, your bonus is 7000, for new homes it’s 14000.

Then from 1 October the bonus will be reduced to 3500 for established and 7000 for new houses. Here is the fine print about the Boost.

And the last important bit: it’s the contract date that counts – not the settlement date.

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

I was hoping we’d win and when Chapeau announced Homeiown the Best Blog of 2009 in Real Estate and Development Industry, for a moment, I couldn’t believe it. And then I felt a lot of things all at once:

• Happy, because my work is appreciated
• Grateful to YOU for choosing me
• Motivated to keep up the good work
• Contented. No idea why.

I couldn’t do it on my own - but you, my readers, my subscribers, my fellow bloggers, all of you helped me. You are reading my stuff, you are sharing your thoughts, you are inspiring me to work harder and get better. There is no paycheck other than your appreciation - and to me it’s enough.

So thank y’all and have a beautiful glorious day - I know I will!

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

The cheapest parking is, of course, street parking. Houses that have only a street parking and don’t even have a right of way (meaning they don’t have an entrance from the street to a driveway) are considered less valuable than houses with a right of way (of course this comparison is only valid within the same area).

Driveway

The more attractive option is the driveway. A car (or cars, if there’s enough room) can be parked in a driveway, and if it is parked behind a gate, then it is called a secure parking.

Carport

A carport is the next best thing. We call a carport a roof supported by 4 posts, it can be either free standing or attached to the house. There are usually no walls, so the carport is a shelter for a car - although not an ideal one. It will keep the car protected from the rain and from the harmful UV radiation, but won’t protect you from the wind as you are getting in or out the car.

When I bought my first car in Australia and was getting it insured, I had trouble answering a very simple question: “Is the car parked in a carport or a garage?”. I simply couldn’t tell the difference between a carport and a garage - well, here is the explanation:

Garage

The best car parking is a garage. Garage is a building, a part of the house or a free-standing one, it has a roof and 4 walls, with a roller (or whatever else) door for the car. Normally there is access from the garage to the house, so can leave the car go straight into the house. A garage is often used as an extra storage space - in fact, many people don’t leave much room for the car

Double garage

And the ultimate best is a double garage - a garage for two cars. If there are two cars in the household and only a single garage, it means that somebody is always blocking somebody else, which is a nuisance and can cause lots of arguments. Double garage takes that headache away, because the two cars are parked side by side with neither one blocking the access to driveway.

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

Let’s start with baby boomers. Baby boomers are the generation that was born between years 1946-1961. The nickname implies the soaring childbirth rates 9 months after the WWII ended and the servicemen came home. Right now baby boomers are in their 40s, 50s or 60s, they are representing the high income bracket and are the major players in the real estate market. No wonder - they entered the workforce much younger than any of today’s young adults (age 21 as compared to 27), move out of their parents’ homes early and started to manage their own financed at a younger age. Also the house price to income ratio used to be 3.8 to 1 back then (whereas it is 9 to 1 now), which means that the housing was 3 times more affordable for baby boomers than it is now. This pretty much explains why many of baby boomers are high profile investors at present.

Generation X are people born in the 1965 - 1976. They are today’s young professionals and real-estate-wise can be characterized as apartments-favoring buyers. Their lifestyle demands living close to the CBD and being unable to afford full size houses, they compromise on the space but not on the location. On top of housing affordability issues generation X is paying more tax as compared to its predecessors, which makes it harder for them to purchase a full size house within 20 km of work.

Generation Me are people born in 1970 - 1990. The name describes the nature of this generation. These folks never had to put anything else above their own good. It’s not that they are selfish - they believe that everything starts with the needs of an individual. Right now they are in their 30s - 20s (or even teenagers), didn’t live long enough to make/save a lot of money, which means they are not wealthy, and therefore don’t affect much the real estate market.

Generation Y consists of people born between 1980 - 1995. They are the offsprings of baby boomers and have grown up during the longest boom in Australia’s history. Many of them fell victims of bad lending practices of financial institutions, in other words it means that they are up to ears in debt, and many more are heading there because banks are continuously targeting these young people, selling them pre-approved credit cards, etc. Generation Y’ers are not prepared to sacrifice their lifestyle, which makes them renters rather than home buyers, because there is no way they can afford to buy a property close to the CBD.

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

So far I’ve described the problem - now it’s time to discuss a solution. Getting the money out of the bank is certainly not the way to go. Although for some types of bank accounts my worst case scenario is possible, there are other accounts that you can keep your money in and still sleep well at night.

Here is the deal - having seen financial institutions fail (in USA in particular), Australian government decided to protect us and from 12 October 2008 announced it will guarantee deposits in Australian owned banks, locally incorporated subsidiaries of foreign banks, credit unions and building societies for a period of three years. Any deposit under a threshold of 1 Million AUD is guaranteed with no extra fees involved, and for anything above that amount there is a fee.

The guarantee doesn’t cover all the accounts, so read carefully which ones are covered:

• Separate mortgage offset accounts (with either 100% or partial offset) are covered.

However, home loan accounts with a redraw facility are not included

Included are all standard deposit accounts, such as:

• Transaction accounts
• Online accounts
• DIY deposit accounts
• Term Deposits

However, Market linked investments such as Shares and Managed funds and life insurance are not included under the Government’s program because they are not considered by the Government to be eligible accounts.

And, of course, if you have any specific questions, it’s best to ask at your bank.

I’d like to ask you - did you think about this problem before? How safe do you think your money is in your bank? Have you ever considered your bank’s credit rating? Do you know what “credit rating” means?

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

Below you will find my best attempt to cover the major points to think about when securing a mortgage in Australia. As you will appreciate it would not be possible to cover all the points in one single article, so if you should require any further information, do contact me via the email below.

Let’s start with people who do not hold Australian citizenship or full residency status - they too can purchase a property, subject to Foreign Investment Review Board (FIRB) approval. There is a process you will have to go through, an application to fill and some information you need to supply. Click here to learn more.

The most common question people ask me is “What evidence of my income will I need to supply?”. For a Full Doc loan, you will need to supply a copy of your most recent payslips or a letter from your employer detailing your income and length of employment. Different rules apply for LiteDoc loans and for self-employed applicants. You have the choice to have your accountant verify your income or you can certify it yourself.

Now let’s move on to types of loans.

Variable Rate

A Standard Variable home loan offers more flexibility, with many lenders offering additional features such as redraw facilities, chequebooks, the ability to make lump sum payments or to transfer your loan to another property in the future.

A Basic Variable home loan is generally about 1 per cent cheaper but offers few added services. No frills and low cost.

With either type of variable loan the interest rate charged moves up or down with the official ‘cash rates’ as set by the Reserve Bank (RBA). So, if they go up, so do your required repayments, but if they fall so do the required repayments.

Fixed Rate

With a fixed rate your interest rate, therefore your repayments, stay the same regardless of changes to the official ‘cash rates’ set by the RBA. If you think interest rates will rise or you prefer to have some certainty about your repayments over the term of the loan, a fixed loan may be more suitable.

Lenders will normally offer a fixed rate for periods of up to five years. However, if you lock into a fixed mortgage and rates fall, you’ll miss out on the lower rate. Also, during the fixed rate period extra repayments may not be allowed and penalties may apply for early repayment or exit.

Combination (or Split) Loans

A Combination or Split loan offers borrowers the ability to set part of their loan as a variable rate loan and the other part as a fixed-rate loan. It’s akin to having a bet each way, in terms of where rates may go.

Introductory loan - Honeymoon rates

Many lenders offer so-called honeymoon rates. The interest rates offered can be significantly lower than the prevailing variable interest rate, although, the introductory rate only applies for a limited time of usually between six and twelve months. After the introductory period, generally, rates revert to the standard rate of the time.

Home equity loan or Line of Credit mortgage

From lender to lender this type of service can be structured differently, basically, it gives you access to equity that you have built (the difference between asset valuation and amount owed). So, in effect any payment you make can be drawn back out as long as the interest charges are being met. This type of loan may be useful to investors or business.

Transactional Account or All-In-One loan

This type of loan is normally set up as a complete transactional account with the mortgage, savings and cheque account combined. As a rule, all your income and cash deposits are paid into this account which reduces your loan balance. A credit card is often linked to the account and monthly payments drawn from the transactional account. Gains desired could be from utilizing interest free credit card periods to allow income to reduce interest costs.

Mortgage Offset account

The mortgage or loan account is linked to a savings account into which your salary and other cash can be deposited and from which you can withdraw to pay everyday expenses. For as long as money sits in the savings account, it is ‘offset’ against your loan and no interest is charged on that amount.

Low-Doc

A low-doc or no-doc (doc=documentation) loan is ideally suited for investors or self employed borrowers who may not have, or want to share, income records. No tax returns or financial reports are generally required, although, a higher interest rate and/or fees may be charged.

I realize that the descriptions above are only the tip of the iceberg and eventually you will need to discuss you personal preferences and financial situation with a professional - which is where my company comes in.

AIMFS provides loans for expatriate and temporary resident borrowers. We provide a full range of fixed and variable rate loans with standard loan features as outlined above. Funds are available to purchase or refinance an established dwelling, or an off the plan purchase, subject to the borrower obtaining Foreign Investment Review Board approval and appointing a recognized Australian based law firm and Power of Attorney to receive loan documents and notices after settlement.

You can contact me by phone + 61 (7) 56304365 or email info@aimfs.com.au or learn more about our services via our website.

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

The purpose of the second inspection is to notice all the major advantages and disadvantages of the property, including things that will inevitably cost you money to add, fix or replace. There is a difference between “want to fix” and “must fix”. For example, if you’re buying a house with an old rotting fence and it falls over, you will have to replace it, so this is a “must fix” situation. On the other hand, if you’ve bought a house with an old dishwasher that you don’t like, you might want to replace it, but while it works you don’t have to.

When calculating a price you will offer on a house, you should consider all the things, replacement / addition of which will cost you money immediately after you move, because that literally means that the house costs you that much more.

There are things you can’t see or feel (like the size of the land) and will have to ask the vendor or the estate agent - don’t be afraid to disturb them, call and ask because you need to find out.

The things you need to pay attention to include:

General information about the house and the land

• Land Size
• Land Shape
• Ceiling height
• Type of hot water system installed
• Is there a rain water tank or a watering system

House-related

• The condition of the inner and the outer walls, whether they insulated or not
• Gutters - new/old, in good/poor condition

Roof

• What kind of tiles (terracotta/concrete/metal), insulated or not
• Condition - good/poor

Heating/Cooling

• Whether installed, what kind(ducted/gas heating, evaporative cooling/air conditioning), in what rooms

Windows

• The condition of window glass and frames, of the fly mesh and the curtains

Doors

• The condition of the doors and door frames, wire doors and fly mesh

Floors

• The type of floor coverings (boards, carpets, laminate) and the condition - good/poor

Bathrooms

• The condition of taps, bath tubs, sinks, shower screens, toilet bowls

Kitchen

• What kind of appliances are there (and are being sold with the house), what sort of the benchtop is there

Outside

• The condition of fences and retaining walls - good/poor

I’ve created a simple checklist that you can print and take to inspection #2. It helped me a lot to inspect houses and remember all the important details. Enter your name and email in the boxes below and I will send it to you.

Happy house hunting!

« Hide it

Subscribe to Homeiown.com - click here

Read more… or Read more right here… »

Inspecting houses is different for investors and first home buyers. Investors are more experienced and therefore can spot things (even on a first inspection) that are literally invisible for most first home buyers. Another thing is that they don’t have to like the house they are buying because they won’t be living there anyway. Having said that let me explain my approach to inspecting for first home buyers.

There is no way you can thoroughly inspect the house when you come to the first inspection. Even if you could, I’d say it would be inefficient. Why bother inspecting a house you might not even like? This means we need to inspect a house we like at least twice: the first impression is established on the first inspection, if it’s a positive one then on the second inspection you should use a full checklist and pay attention to all the details.

So I’d say that on your first inspection you can manage to look at the 10 following things and then decide whether that house is worth another look:

• House type - house / townhouse / unit
• Construction type - double brick / brick veneer / weatherboard
• Ceiling height - low / high
• Number and sizes of the rooms - bedrooms / family rooms / living areas, en-suite / built-in robes
• Number and sizes of bathrooms - big / small, shower / bath
• Kitchen size and looks - big / small, new / old
• Entertaining area - yes / no, covered / not covered
• Established garden - front / back, yes / no
• Garage/carport - yes / no
• Paved driveway - yes / no

I’ve made a nice 10 item checklist for you to print and take to inspections. Enter your name and email in the boxes below and I will send it to you.

I hope you find your home this weekend!

« Hide it

Subscribe to Homeiown.com - click here