Owning Property Archives - Page 2 of 3 - Berwick Mortgage Broker

Apr 14

Five Simple Ways To Increase Loan Repayments And Own Your Home Faster

Paying off a mortgage can seem relentless – every payment counts of course, but it can seem to be taking forever to make a dent. Here are some simple ways you can increase the amount you pay off and own your home sooner.

Reducing the principle on your mortgage as quickly as you can means paying less interest, so your future payments are going even further towards reducing that principle.

To find the ideal balance between the extra repayments you can afford to make and the time this will shave off your mortgage term, use a mortgage calculator.

For example, on a $350,000 loan at six per cent interest, a monthly repayment of $2100 will see a total term of 30 years and a total cost of just over $750,000, while paying just $500 per month on top of that will bring the loan term down to just under 19 years and the total cost to just over $580,000.

Boosting these monthly payments by a further $400 to $3000 will see the loan paid off in less than 15 years – halving its term.

So, here are five simple ways to increase those mortgage repayments.

Ignore the bank

Well, sort of. Don’t pay any attention to the amount that you are told is the minimum repayment, as long as you pay more. Work out the most you can afford to pay, think of this as your minimum repayment, budget for it and stick to it.

Treat yourself

Think of every step you take towards reaching your goal of owning your property outright as a way of treating yourself. Sure, an expensive bottle of wine is nice, but doesn’t taking a year off your loan taste pretty sweet, too?

Every single increase to your income, no matter how small, should be channelled into the debts that are incurring the highest interest. If this is your mortgage, send it there. Do the same with your tax returns, any bonuses at work and even cash gifts.

Track your spending

Download an app to track what you are spending your money on, and trim where necessary, channelling the savings into your mortgage payments.

Think of all those little things you don’t really notice yourself pulling out your wallet for. In one week, that extra coffee on Monday morning, a sandwich from the cafe instead of one you have made yourself, that round of shots you probably shouldn’t have shouted on Friday night and getting your nails done on Saturday add up to $150. Over a month, that’s $600. Increasing a monthly repayment from $3000 to $3600 could trim more than 10 years off the term of a $500,000 loan. Now how much do you really want that coffee?

Eyes on the prize

Watch the forecast term on your mortgage – seeing it go down will motivate you to work even harder.

Talk to an expert

Talking to your finance broker about refinancing options could reveal a way to pay down your debt sooner even without increasing repayments. A finance broker will be able to look into whether you may get a better interest rate or lower fees with another lender, or even with your own, and will be able to help minimise any refinancing costs.

This is especially important each time your goals or your financial circumstances change. If you are earning more than when you took out your loan, you have paid off a personal loan or a credit card since that time, or your property’s value has risen, your finance broker may be able to negotiate a far better deal than the one you are on.

For example, if your finance broker negotiated your interest rate down from seven to six per cent on a $500,000 loan, on which you are making $3500 monthly repayments, your loan term could drop from just over 25 years to 21 years.

A Finance Broker is with you for life to make sure you’re always getting a good deal you can from your mortgage. Contact me to help you own your home outright sooner

Saving Money by Alan Sarkissian

Feb 22

Top ways to cut your expenses and increase your savings

Is the key to saving a home deposit as simple as giving up smashed avo toast for breakfast? Well not quite, but spending less does make a difference.

On top of a budget, a savings plan and strategies such as a high-interest savings account, an effective way to save is to reduce or eliminate expenses.

Start by understanding your spend

It can be easy to lose track of how you’re spending money, especially due to cashless payments and credit cards.

Many online banking systems include tools to categorise debits and make a budget – take advantage of them. Or download an app that helps you track your personal expenses on the go, like ASIC’s TrackMySPEND.

Find savings in the essentials

Some costs can’t be avoided – but many everyday expenses can be reduced. For example you could:

Move in with your parents/relatives, or move into a cheaper rental or share house (short-term discomfort can pay off in the long term).
Implement tactics like meal planning, making grocery lists and buying in bulk to save money on food. Set aside a budget for eating out/take-away and stick to it.
Shop around to reduce your regular bills – you may get better value if you switch, or tell current providers you intend to switch. Seek discounts for taking out multiple policies with one insurer.
Use the car less: take public transport; carpool with colleagues; or try walking or riding. You’ll be amazed at how quickly it all adds up to savings.

Make sure you’re paying off debts or credit cards completely each month or as much as possible, to avoid the added expense of paying interest.

Reduce common overspending

If you spend excessively on things like buying clothes, going out or expensive hobbies, it may be unrealistic to cut the expense entirely. Set a weekly or monthly limit and reduce that limit over time.

A survey of more than 1000 Australians showed that 73 per cent have a problem with overspending. In particular, people tend to go overboard Christmas rolls around.

To reduce gift expenses, be like Santa: make a list (and a budget). Buy only planned items within your allocated budget – then stop! Ask your family for support; it’s easier to put a cap on gift values if everyone else does too.

Another common way Aussies overspend is on holidays. CommBank research has shown that a third of holidaymakers spent more on their trip than planned. Do your research and set a daily budget.

Costs that could be eliminated

Look for opportunities to eliminate costs. Cancel unused services. Update your internet or mobile plans if you’re always paying for excess data.

Ask yourself: are you really using that gym membership? Are you getting value from your subscriptions? Remember, every wasted dollar is money you could be spending on your own home.

Saving Money by Alan Sarkissian

Dec 16

How to have a successful open for inspection

When you’re selling your house, the key to a successful open for inspection is to make potential buyers feel comfortable. You want to show your property’s best side, and allow people to see themselves living in their new home. We’ve put together some handy tips to help increase your property’s attractiveness on inspection day.

Put on a good face
Potential buyers will be inspecting your house from the moment it’s listed. They’ll drive by to check out the neighbourhood and see how things look from the outside – so this is the moment to make a good first impression.

Tidy the front garden, keep the verandah clear, hide the garbage bins and remove junk mail from your letterbox. You can add planters with colourful flowers to the verandah if you don’t already have them.

Remember to keep the external lights on at night, and make sure the front of the house – the face it presents to the world – is clean, freshly painted and well maintained: no sagging gutters, clogged downpipes or broken external blinds and shutters.

Clean until it hurts
Your house needs to sparkle and shine in every room (including the kitchen). Keep the sink clear of dirty dishes, put fresh (or even new) towels in the bathroom, make the beds and polish all tabletops, dressers and bureaus.

It can help to empty the dishwasher and keep the fridge clean and orderly – potential buyers might look in there, too.

Cut the clutter
Put away anything that isn’t essential to everyday living; take piles of magazines off the coffee table, clear away mail from the sideboard or wherever you keep it, and organise desks and tabletops.

Also remove knick-knacks and other personal items that might be on display, although don’t strip the place bare. It still needs to look like someone’s home.

Tone down the quirk
The purple beanbag? The kitsch op-shop vases? Your furniture says a lot about you, but too much personality can crowd out a potential buyer, so put the really ‘you’ items away during inspections. Buyers need room to project their own personalities onto your home.

Let the light in (and the smells out)
Swap dark, heavy window coverings for lighter blinds and curtains, and open them up to let natural light in. Also, consider repainting darker rooms in light, neutral colours.

Give your house a good airing before each open for inspection. Smells that you might not even notice, from cooking, pets or smoking, for instance, can be quite off-putting for others.

People can be sensitive to all types of smells, so while subtle floral or oil diffuser aromas are good, don’t overdo it with the ‘nice’ scents, either. The aromas of baking bread and freshly brewed coffee are attractive and homely – but are hard to organise if you’re not around.

Make yourself scarce
Buyers needs to feel like the home is almost theirs – having the current owners hanging around can make them feel like they’re intruding. It may also discourage people from telling the agent what they really think about the home – an important source of market intelligence.

Oh – and take the dog with you. Not everyone likes pets, some people are scared of dogs, and a roaming pooch will get in the way.

Presenting your property in the best possible light can improve your chances of a sale. With a bit of preparation, some elbow grease and attention to the finer details, your home will be ready to make its best impression on potential buyers.

Owning Property by Alan Sarkissian

Oct 3

What you can borrow or what you should borrow?

The amount you can borrow and the amount you should borrow are sometimes two very different things. Before you apply for a home loan, it makes sense to realistically assess your financial situation. Here’s how to do it.

Understand your borrowing capacity
Generally speaking, your borrowing capacity – what you can borrow – depends on a number of factors, including:

your income
your monthly expenses
your existing debts
how much deposit you have saved
current interest rate
type of loan
whether it’s a principal, or principal and interest loan
the term of the loan
estimated repayments.

However, knowing the difference between what you can borrow and what you should borrow is very important. As a general rule, it’s not a good idea to allocate more than 30% of your monthly household income to repaying your home loan.

Build a budget
To fully understand what your realistic borrowing limit might be, first of all create a budget – and stick to it. Once you understand exactly what’s coming in and going out you can properly assess how much you can afford to repay – and therefore what you should borrow.

If you don’t feel comfortable drawing up the budget yourself, it’s wise to seek help. A financial planner can assist you in preparing a budget.

Expenses to include in your budget include, but are not limited to:

council rates
body corporate fees (if applicable)
insurance costs
maintenance costs
utility bills
estimated groceries
medical bills and health fund payments
school fees
phone and internet costs
petrol and transport payments
entertainment, travel and clothing
other loans or credit card debts.

Future-proof your figures
Remember to leave a bit of wiggle room in your budget in case circumstances change. People can lose their jobs or get sick, or interest rates can rise, which could impact your ability to honour your repayments.

It’s also important to think about some other things that may happen: Is your income likely to increase within the next few years? Are you likely to have children and lose an income? Do you plan to retire shortly? These are all questions that only you can answer, and they will all have an impact on how much you should borrow.

Remember, lenders tell you how much you can borrow, but you know your personal circumstances better than anyone else – it’s up to you to decide how much you should borrow. If you need support and advice, a mortgage broker may be helpful during the decision-making process.

Home Loans, Saving Money by Alan Sarkissian

Jul 5

Top financing apps and tools

Whatever your reasons, understanding your budget is key to living a comfortable life. Whether you’re saving for something in particular, getting out of debt or just trying to stop spending so much money on food, noting your daily spend can definitely help resolve any issues. Here are five apps that can help you you stay on top of your budget.

Money Health Check

Money Health Check assesses your finances and lets you know whether they’re in need of some tender loving care or whether you’re on the right track.

This free MoneySmart app asks some simple questions, and then gives you a breakdown of what areas need attention and where you’re doing well by looking at:

financial goals
income and expenses
debts
saving and investing
insurance
superannuation and retirement
estate planning.

The great thing about the app is that it’s personalised, and at the end it gives you the top five actions you need to take to improve your finances.

TrackMySPEND

Also created by MoneySmart, TrackMySPEND allows you to input all of your expenses so you can find out where you need to cut back and save.

Examples of expenses you can put in include medical, grocery, work or travel, gifts and coffees, lunches or dinners. You can also nominate a spending limit per week, fortnight, month or year, and the app will track your progress against this limit.

The key feature of this app is the ability to mark expenses as ‘need’ or ‘want’. That way, when you revisit your expenses you can see what you can cut back on and where there are opportunities to save.

Pocketbook

Pocketbook categorises all of your spending so you can see where your money is going. Categories include groceries, travel, clothing and fuel, among others. You can also set your budget so you can stick to it.

The great thing about this app is that you can link it to your bank account so you don’t have to manually input every expense – the smart technology does it for you. Another handy feature is the alerts. Notifications appear when money comes out of your account so you won’t miss any transactions or accidentally forget to input them. Finally, there are the encouraging words when you’re close to reaching a goal.

Splitwise

Ever had a friend or family member who constantly forgets to pay you back? There goes that money – and with it, the ability to save. Splitwise is a great way to remember who paid for what and how much people owe each other, whether it’s dinner, rent or a movie ticket.

This app lists what you’ve spent and what the other person has spent, then it does the maths for you. It also gives you the ability to send IOU emails.

Expensify

We’ve all been there – tax time comes around and you simply can’t find all the receipts you need to claim tax back on. Expensify lets you scan your receipts when you get them and stores them in a nice bundle so you can access them at a swipe or tap of your finger.

The great thing about the app as well is that it actually extracts the data, including the merchant, date, time and amount, and puts it all in a downloadable file for you.

Your broker will be able to give you advice to help you save money throughout the loan process. On top of this, sticking to your budget so you can be more financially fit is not difficult – sometimes you just need a bit of technological help.

Saving Money by Alan Sarkissian