Paramount Finance Australia 8/26/24 Paramount Finance Australia 8/26/24

How to buy an investment property using your home’s equity

Want to grow your investment portfolio but have most of your wealth tied up in your family home? You may be able to leverage recent gains in the property market as equity for an investment property. Let’s take a look.

We all have a few financial goals.

And right now, investing in a rental property is one of the more popular investment goals among Australians.

In fact, more than one-in-five Australians (21%) aspire to own investment properties to build their wealth, according to MLC’s Financial Freedom report. And interestingly, this percentage increases to 27% for Gen Zs and 23% for Gen Ys.

Investors are also piling into property, with lending for investment properties up more than 30% over the past year, according to Australian Bureau of Statistics data.

It’s not hard to see the appeal.

Rents have surged 39.7% over the past five years, rental vacancy rates are wafer thin at 1.3%, and home values nationally have jumped 13.5% since January 2023

Recent property price increases can hold the key

CoreLogic’s latest Pain and Gain report reveals that property profits have just hit a 14-year high.

This saw homes resold in the first quarter of 2024 dish up a median profit of $265,000.

So how does ‘cashing out equity’ in recent property gains work if you don’t sell your home?

Here’s one example.

Let’s say you bought a $750,000 house five years ago that, due to property price increases in recent years, is now valued at $1 million.

And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000.

By refinancing that remaining $500,000 home loan balance into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to use as a deposit for an investment property.

It’s also worth noting that when using this strategy banks will typically let you borrow up to 80% of a property’s market value.

So if you upped the ante and refinanced to an $800,000 loan, you could unlock $300,000 in equity.

This allows you to enjoy all the perks of becoming a property investor – including earning rental income, capital gains and possible tax benefits – potentially without drawing upon cash savings.

Better still, if your rental property grows in value, the rising equity in that property can be used to invest in additional properties.

Other strategies to become a property investor

There are plenty of pathways to becoming an investor.

You may have the funds available to pay a cash deposit.

Or you might be thinking of holding onto your current home, and using it as a rental after you upgrade to your next home.

Or, you might have other investment goals outside the property market altogether (such as using your home’s equity to invest in shares or boost your super balance).

What matters is that you know the options available for your situation.

Like to learn more? Call us today to find out how you could become a property investor.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Paramount Finance Australia 8/24/24 Paramount Finance Australia 8/24/24

Property market set to blossom this spring

The sun is out – and so are the buyers! Spring is traditionally a peak period for property, and there’s a good reason why spring 2024 is shaping up to be a bumper season. Here’s how to prepare if you’re planning to buy in the weeks ahead.

At last! It’s time to pack away the winter woollens, and dust off the t-shirts and shorts.

Spring is just around the corner, and that means sellers will be sprucing up their homes to attract as many buyers as possible.

Spring has always been a popular time for sellers and buyers alike. Gardens look lush, the warmer weather sees us head outdoors, and a home purchase can be settled in time for Christmas.

But there’s another reason why spring 2024 is likely to be especially busy.

20% more homes to choose from

Over the past decade, spring has seen new listings jump by more than 18% across the country, according to CoreLogic.

This gives buyers a wider selection of homes to choose from – and they certainly take advantage of it. Home sales across the country typically rise by more than 8% in spring.

This year, buyers could have an even bigger choice of homes to pick from.

According to CoreLogic, autumn and winter have seen real estate listings flow onto the market at an above average pace.

That’s seeing the market shift towards more of a balance in supply and demand – especially compared to last year, when sellers had the upper hand.

Even so, buyers should prepare for the spring selling season.

Quality homes don’t stay on the market for long. In Perth, for example, the median selling time is just 10 days at the moment, so buyers who act fast can have a competitive advantage.

3 steps to give yourself an edge

In the fast-paced spring market, home buyers could put themselves ahead of the competition by following three simple steps:

1. Establish a wish list

The more properties you inspect, the easier it can be to lose track of what you really want in a new home.

Cut through the confusion by making a list of must-have features. Follow this up with a rundown of features that are nice but not essential.

Having a wish list to work from can be a real time saver as it lets you focus on properties that tick all the boxes for your ideal home.

2. Know what you can afford

There’s no room for guesswork when it comes to buying a home.

Talk to us for a clear idea of your borrowing power. This lets you set a buying budget so you know which homes sit comfortably within your price range.

3. Have your home loan pre-approved

Nothing says you’re a serious buyer like having mortgage pre-approval. It’s a simple step that can eliminate a large part of the stress associated with home buying.

And if you’re buying at auction, pre-approval lets you bid with confidence while setting a clear limit for your highest bid.

We can help you arrange home loan pre-approval for a loan suited to your needs.

We’ll spring into action on your behalf

As the weather starts to heat back up, so too will the housing market. So if you’re looking to buy, now is a good time to get organised so that you’re home loan ready if the opportunity arises.

Call us for a personalised chat about your property goals, and discover how we can help you achieve them with a home loan that suits your needs.

Paramount Finance Australia 8/22/24 Paramount Finance Australia 8/22/24

Does your job come with home loan perks?

Your job can provide more than an income. When it comes to being approved for a home loan, certain roles can enjoy favourable treatment from lenders. So today we’ll look at some of the occupations that can offer up home loan perks.

One of the first things a lender will look at when you apply for a home loan is your ability to manage repayments. And for most of us, that comes down to having a job that pays a regular income.

However, not all jobs – and types of income – are treated in the same way by every lender.

From nurses and other essential workers – to lawyers and accountants – various occupations can enjoy special treatment.

Essential workers – additional types of income considered

Where would we be without our essential workers – the nurses, firefighters, police and ambulance officers who play such a key role in our communities?

Despite the valuable services they provide, essential workers aren’t usually among the top income earners, and they can struggle to buy a home of their own near their work – especially those within 15kms of Sydney and Melbourne CBDs.

However, a number of lenders are helping out in a variety of ways.

Some banks have introduced home loans designed for essential workers that come with lower interest rates. According to Mozo, this can see essential workers pay some of the lowest rates in the market.

Other lenders take a more generous approach to the types of income essential workers earn when it comes to determining their loan serviceability.

For instance, some banks will include 100% of an essential worker’s overtime pay in their income calculations. Others will add in allowances received by essential workers.

The definition of ‘essential workers’ varies across lenders and policies, but can include:

– frontline ambulance officers
– paramedics
– firefighters
– police officers
– corrective services officers
– nurses
– aged care or disability workers
– teachers
– early childhood educators
– defence or military personnel.

Lenders’ mortgage insurance waiver

Several of the big banks offer other types of support that can make home buying more accessible.

Westpac, for example, may waive lenders mortgage insurance (LMI) for nurses and midwives who only have 10% deposit.

Usually, LMI is applicable when borrowers have a deposit below 20%.

A $90,000 per year minimum income is needed for the below professions (casual incomes calculated over 48 weeks) to apply with just a 10% deposit with Westpac:

– audiologist
– chiropractor
– midwife
– occupational Therapist
– osteopath
– physiotherapist
– podiatrist
– psychologist
– registered Nurse
– radiographer
– sonographer
– speech Pathologist
– optometrists
– pharmacists
– veterinary practitioners.

Meanwhile, for the below professions there is often no minimum income requirement to secure a loan with a 5% deposit and no LMI:

– dentist
– general practitioners
– hospital-employed doctors (intern, resident, registrar, staff specialist)
– medical specialists (as per the Medical Board of Australia).

Perks for home buyers in professional occupations

Home buyers who work in high-income professions may find it less challenging than essential workers to pull together the funds to buy a home. But they too can be eligible for a few home loan sweeteners.

The most common perk is a waiver of LMI, even for borrowers with a deposit as low as 5%.

As a guide, buying an $800,000 home with a 5% deposit of $40,000 would normally attract an LMI premium of $35,000.

LMI waivers are usually available to medical professionals, lawyers and accountants, though they can extend to sports and entertainment stars. They’re generally offered because banks are keen to form long-term relationships with these customers.

Call us today

It can take a bit of hunting around to know which lenders provide valuable perks for your occupation.

And if your job involves shift work – or long hours such as a doctor or lawyer – the last thing you want is to spend your spare time trawling the mortgage market.

One way to save time is to call us.

We can explain the various benefits you may be entitled to across a range of loans and lenders, and discuss any conditions banks may impose.

Paramount Finance Australia 8/1/24 Paramount Finance Australia 8/1/24

Why multi-bedroom homes could be appealing for investors

A cost of living crunch is driving a new trend among renters – and it’s changing the wish lists of some property investors. We reveal what’s happening across the rental and investment markets.

A cost of living crunch is driving a new trend among renters – and it’s changing the wish lists of some property investors. We reveal what’s happening across the rental and investment markets.

Investors have been a driving force in the property market lately, with lending to investors up almost 30% over the year to May 2024.

Part of the appeal has undoubtedly been rising property values, which have jumped 10.14% nationally since the market lows of late 2022, leaving many investors pocketing tidy capital gains.

However, successful investing can also involve buying a property with plenty of tenant appeal, and new research from CoreLogic indicates that renters are opting for homes with more bedrooms.

Why is that the case?

Most people are feeling cost of living pressures right now – and renters are no exception.

Renters aren’t just dealing with higher utility bills and rising costs at the checkout and the bowser – they’ve also had to deal with rents rising 8.2% nationally over the past year.

Thus, plenty of tenants are looking for ways to lower their weekly rent – and one strategy is to lease a larger home, either for use as a sharehouse or to accommodate multiple family members.

According to CoreLogic, the evidence for this strategy lies in data that shows higher rent increases for homes with more bedrooms.

As a guide, rents for 1-bedroom units and studios have increased by 7.1% over the past 12 months. Rents for 2-bedder apartments have risen by 7.9%.

Whereas, rents for houses with five or more bedrooms have jumped 8.7% over the same period.

Despite the higher rent rises, it’s often more cost-effective for renters to band together and share a bigger property.

The average weekly rent per bedroom in a 5-bedroom house is about $175 nationally compared to $293 in a 2-bedroom unit, or $541 in a 1-bedroom apartment.

The takeout for investors

While rents for multi-bedroom homes may have outpaced smaller properties, a larger dwelling won’t appeal to every investor. And it’s not just about the likelihood that a big house will come with a higher price tag than a smaller place.

A large property with the potential to accommodate more tenants can experience greater wear and tear, potentially leaving an investor with higher maintenance costs.

In addition, 4-5-bedroom houses are often found in outer suburban areas, which may experience slower price growth than inner city locations.

Ultimately, what matters is that investors consider what they want to achieve by purchasing a rental property, and invest in the place that aligns with their goals.

Call us today

When looking to buy an investment property, it’s also important to find an investment loan that’s right for your needs.

And that’s where we can play a key role.

Call us today to get to know your borrowing power and explore ways you can finance your investment property.

Paramount Finance Australia 7/25/24 Paramount Finance Australia 7/25/24

Low deposit scheme opens up to New Zealander visa holders

Kiwis hoping to buy a first home in Australia have just scored gold! The popular Aussie low-deposit home buying scheme has been opened up to visa holders from across the Tasman. Here’s what you need to know.

Sure, the Kiwis have the All Blacks, the glaciers and landscapes fit for a Hobbit.

But Australia offers New Zealanders something that could deliver more of an adrenaline rush than bungy jumping in Queenstown.

And that’s the chance to buy their first home in Australia with as little as a 5% deposit.

The popular Home Guarantee Scheme (HGS) lets Aussie citizens and permanent residents buy their first home in Australia with just a 5% deposit. There’s a version for regional first-home buyers, too.

Single parents can also use the scheme to buy a home with a 2% deposit.

And Housing Australia has just confirmed to us that New Zealand Special Category Visa (SCV) holders are now considered ‘permanent residents’ for eligibility purposes for the HGS (more on the SCV below).

But first, how does the scheme work?

The HGS helps first home buyers and single parents buy a place of their own even when they have a deposit smaller than the standard 20%.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance (LMI), which can help you save on upfront costs.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

How many New Zealanders could benefit from this change?

Australia and New Zealand have always shared a special bond. And we always welcome our mates from across the ditch.

That’s seen a steady stream of travel back and forth across the Tasman, but in recent years Kiwis have been pulling up stumps and moving to Australia in big numbers.

In the 2022-2023 financial year, more than 41,000 New Zealanders relocated to Australia on an SCV, according to the Australian Bureau of Statistics. That’s around 3,400 Kiwis arriving in Australia on an SCV every month.

This visa – while it has the word “special” in it – is the main visa New Zealanders get when visiting Australia and allows them to visit, study, stay, and work in Australia and is granted upon arrival (so long as they meet certain security, character and health requirements).

It can also allow them to directly apply for Australian citizenship – a pathway that many of the 670,000 Kiwis living in Australia would have completed.

Can’t see anything about New Zealanders on the official HGS website?

Here’s the good news.

We reached out directly to Housing Australia, which runs the HGS, to confirm that New Zealanders can apply for the low deposit scheme.

It turns out that New Zealanders who hold a Special Category Visa Subclass 444 (SCV) are now regarded as permanent residents for the scheme and are therefore eligible to apply.

Of course, there are other eligibility conditions. These include maximum price caps on the home you can buy, with price caps varying across the country.

The most straightforward way to find out if you might be eligible to take advantage of the HGS is to call us. We can walk you through the scheme, and explain whether or not you are eligible to apply.

Not all lenders have signed up to the HGS

No matter whether you’re a dinky-di Aussie or a Kiwi making a fresh start in Oz, it’s important to know that the HGS is not available through every lender.

We can let you know which banks have signed up to the scheme, and help identify loan options from participating lenders that may suit your needs.

It’s also important to know that places within the scheme are limited, and who knows how long New Zealand SCV holders will be considered ‘permanent residents’ when applying for the scheme, so get in touch with us today to get the ball rolling.

Paramount Finance Australia 7/18/24 Paramount Finance Australia 7/18/24

Is fear of rejection holding you back from your life goals?

Scared to apply for a home loan? You’re not alone. Fear of rejection has stopped one in five Aussies from applying for finance over the past year. We explain what’s driving this fear, and how you can boost your chances of getting approved.

No one enjoys rejection. But despite this, there are plenty of times in life when we put ourselves in a position where rejection is a possibility.

From applying for a new job to asking the love of your life to marry you, the risk of a knock back isn’t too far away.

Yet we give it a go because the rewards of success outweigh the disappointment of being turned down.

It’s the same when it comes to applying for a home loan.

Sure, you could get a ‘no’ from a lender. But if you get the thumbs up, you’re on the way to buying a home!

This is worth bearing in mind because a new survey by Finder shows that over the past year, one in five (19%) Australians have avoided applying for finance, including home loans, out of fear they’d be knocked back.

The rejection concern that bothers borrowers

According to the research, one key aspect of being knocked back for a loan raises particular concerns for people – and that’s what rejection could do to their personal credit rating.

Let’s set the record straight here.

Being rejected for a loan is unlikely to affect your credit score – a knockback won’t even appear on your credit file.

The thing that is much more likely to impact your credit rating is applying for a loan in the first place.

When you submit a loan application, the lender will usually take a look at your credit report. This is called a ‘hard enquiry’.

It is these enquiries that can lower your score, and they can stay on your credit file for up to five years.

That’s why it makes sense to minimise the number of loan applications you make.

Better still, try and stick to one application and get it right the first time. And that’s where we can really help you out.

How to overcome fear of home loan rejection

Applying for a home loan can be nerve-wracking. After all, there’s a lot riding on loan approval.

But if fear of rejection is holding you back, there is a simple solution. And that’s getting in touch with us.

We can walk you through your credit report to explain any issues that could raise concerns with a lender. And if your credit score is a little low, we can share tips on how to improve it.

Keep in mind though that your credit score is just one piece of the picture that banks look at.

We look at your total position in terms of home loan readiness.

Your income, household expenses, any other debts, and a variety of additional criteria that vary between lenders, all go into the mix of factors that decide whether you get the green light for a loan.

We’ll review it all, help you iron out any kinks in the application, and then line you up with a lender (and loan) that’s a good fit for you.

Paramount Finance Australia 7/11/24 Paramount Finance Australia 7/11/24

How much could you expect to borrow for a home in 2024?

As property prices hit record highs across a number of cities, it’s no surprise that new home loan balances are also nudging towards fresh peaks. Today we’ll reveal what the ‘average’ new home loan is in your state, and provide you with some handy tips to help bring down your balance sooner.

High interest rates and a cost of living crunch haven’t stopped home values rising 8% nationally over the last 12 months.

According to CoreLogic that’s added an extra $59,000 to the average Australian home’s value.

It’s great news for home owners, but not so good for buyers, who may have to take out a bigger loan to fund a property purchase.

On the plus side, not everyone is having to upsize their home loan.

In some cities, new mortgage sizes are staying pretty still or becoming slightly smaller.

What’s the average in your state?

Across Australia the ‘average’ new mortgage is at a record high of $626,055 as of May 2024, according to the Australian Bureau of Statistics. That’s up from $584,607 just 12 months earlier in May 2023.

That means you’d need to be able to make mortgage repayments of about $3,875 per month (assuming that you take out a 30-year principal and interest home loan at 6.3%).

However, ABS data shows plenty of variation in new loan sizes in different states and territories.

Here’s what’s happening across the country:

NSW – the average new home loan size is currently $767,584, up from $720,029 in May 2023.

VIC – average new home loan is $601,891, slightly up from $598,949 in May 2023 but well below the peak of $651,364 in January 2022.

QLD – the sunshine state’s average new home loan size is $586,627, a solid increase on the May 2023 average of $521,609.

SA – average new home loan of $541,775, a big jump on the May 2023 average of $467,438.

WA – average new home loan of $538,860, up from $472,080 in May 2023.

TAS – the Tassie market has seen very little movement in new loan sizes. The current average is $462,324, just a few thousand dollars shy of the $465,313 average in May 2023.

ACT – the average new home loan across Canberra is $614,242, up from $589,130 in May 2023.

NT – in the Top End, the average new home loan has increased slightly, currently sitting at $437,427 compared to $424,873 in May 2023.

How to potentially whittle away your home loan sooner

No matter where in Australia you are buying a home, managing a home loan can be stressful at a time when interest rates are high.

So, it’s important to look for ways to help ease the pressure.

Choosing an offset home loan, for example, can let you put spare cash to work by helping to lower your monthly interest charges.

It can also allow you to build up a savings buffer while also reducing the overall interest you pay on the loan, and thus, bring the balance down quicker.

If you are unlikely to have substantial savings, looking for a loan that lets you make small, extra repayments at no additional cost can be a way to pay down the loan sooner, and save on interest costs.

Even something as simple as switching from monthly to fortnightly loan repayments could deliver savings on your interest repayments over the course of the loan.

Paying half the monthly amount every fortnight can mean paying the equivalent of an extra month’s repayments each year, helping you forge ahead with the loan without too big an impact on your household budget.

What matters is that you speak to us about a mortgage that suits your unique needs. One that gives you the benefits of the loan features you need, plus a competitive interest rate.

So if you’ve got your eye on a potential new home – or just want to find out your borrowing capacity so you can start searching – get in touch with us today.

Paramount Finance Australia 7/5/24 Paramount Finance Australia 7/5/24

50,000 low-deposit spots open for first home buyers and single parents

The new financial year has kicked off with a bang for first home buyers! A whopping 45,000 more places have opened up for them under the Home Guarantee Scheme, as well as 5,000 more spots for single parents. Here’s how it could help you buy a home sooner.

Home ownership has long been the great Australian dream, but high property prices are making it tough to save a 20% deposit for many young families.

That’s where the federal government’s Home Guarantee Scheme (HGS) comes in.

It gives first home buyers a leg up into the property market even if they have just a 5% deposit, and it’s proving to be very popular.

In fact, it’s helped more than 160,000 Australians buy or build their own home since the scheme launched four years ago.

Places in the HGS are capped each year, but the good news is that an extra 50,000 spots have just been announced for the 2024-25 financial year.

Not sure what the scheme is about?

Let’s take a closer look at what’s involved by answering a few FAQs.

What is the Home Guarantee Scheme?

The HGS helps first home buyers and single parents buy a place of their own even when they have a small deposit.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance, which can be a big saving on upfront costs.

In fact, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

Who does the scheme help?

The HGS covers three separate programs, each with a different type of home buyer in mind.

The First Home Guarantee helps eligible first home buyers get into the market with as little as a 5% deposit. From 1 July 2024, an extra 35,000 places became available.

The Regional First Home Buyer Guarantee is dedicated to helping first home buyers who live in regional areas buy a home with just a 5% deposit. An extra 10,000 places have opened up for the 2024-25 financial year.

The Family Home Guarantee supports eligible single parents to buy a home with as little as a 2% deposit. This will help up to 5,000 families this financial year.

Am I eligible for the Home Guarantee Scheme?

You’ll need to tick a few boxes to be eligible for the HGS.

In particular, there are limits around the maximum purchase price for a home under the scheme. The upper limits vary between cities and across regional areas from state to state, and are adjusted each financial year.

One way to find out if you’re eligible is to call us and we can walk you through the various requirements.

Do all banks support the Home Guarantee Scheme?

No. Lenders choose to be part of the HGS, and while there is a reasonably wide choice of banks to pick from, not all lenders have signed up.

The Real Estate Institute of Australia says the “best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker”.

To date, mortgage brokers have secured up to 80% of the HGS placements, and we can guide you through the application process, answer any questions you may have about buying a first home, and recommend a home loan option suited to your needs from the lenders that are part of the scheme.

Call us today to find out more about buying with a 5% deposit – and zero lenders mortgage insurance. You could be in your own home a lot sooner than you expected!

Paramount Finance Australia 6/27/24 Paramount Finance Australia 6/27/24

Will home prices keep rising over the next year?

Property prices are expected to keep climbing higher through to mid-2025 – though not everywhere, according to a new report. We reveal where prices are tipped to go up, and where prices are expected to fall.

What a crazy financial year it’s been for property prices.

Despite a cost of living crunch and high interest rates, home values Australia-wide have soared 8.3% over the past 12 months, according to CoreLogic.

Will prices keep heading north? Or can we expect the market to cool at some stage?

These are key questions for home buyers who may be weighing up whether now is the right time to buy.

To get some answers, we turned to Domain’s latest forecast report, which sets out expected property price movements over the next 12 months.

The big picture: prices set to keep rising

According to Domain, several factors are set to push Australian home prices higher over the next year.

On one hand, we’re seeing a tight supply of new homes being built, combined with lower than usual numbers of homes listed for sale.

On the other side of the ledger, strong buyer demand is being fuelled by a growth in migration.

As Domain puts it, the “push-pull between affordability and availability” will be the factor that shapes Australia’s property market between now and June 2025.

Price growth is expected to differ between cities

That’s not to say home prices across Australia will move in the same direction and at the same pace.

Let’s take a quick tour around the nation to see what Domain believes lies in store for home buyers (and apologies to Hobart and Darwin residents – neither city was covered in the released report).

Brisbane

Brisbane’s property market has notched up an impressive 16.3% price growth over the past year. And Domain says there’s more growth to come.

With a forecast for 6-8% price growth, Brisbane’s median house price could hit a record high of up to $998,500 by mid-2025. Apartment values are expected to increase by 4-6%.

Sydney

If Domain’s prediction of 6-8% price growth proves accurate, Sydney’s median house price will hit a new record high of up to $1.76 million by this time next year.

Apartment prices (median) are also expected to reach a new record of up to $855,000 based on forecast price growth of 4-6%.

Melbourne

Melbourne’s housing market is expected to remain a little cooler, with growth between 0-2% expected – leaving median house prices between $1.03 million and $1.05 million. Unit prices are expected to do better, potentially rising by up to 4%.

Regional Victoria is the only market where Domain expects house prices to cool, with falls of 0-3% expected by mid-2025.

Adelaide

Adelaide could be on track to become a million-dollar city if Domain’s forecast of 7-8% price growth pans out. It could see Adelaide’s median house price hit a record high of up to $984,000 by June 2025.

Unit prices are anticipated to grow by up to 6%, helping the city’s median apartment price push through the $500,000 barrier.

Perth

There’s no denying Perth has had a bumper year, with a 22% jump in home prices over the past 12 months. And according to Domain there’s plenty of gas left in the tank.

With price growth of 8-10% possible over the year ahead, Perth could notch up a record-high median house price of between $840,000 and $856,000 by this time next year. In the unit market, prices are expected to jump 4-5%.

Canberra

Canberrans can expect mild house price growth, with values forecast to climb by up to 4%.

Unit prices in the nation’s capital are expected to increase by 1-4%.

What to weigh up

Domain’s forecasts are just that – predictions, not facts.

Along with factors that could push prices higher, the property listing site also cautions that a tighter jobs market and stagnating incomes could put downward pressure on prices.

Long story short: the right time to buy is when you feel ready to get into the market.

We can’t say for sure how property prices will move.

But we can provide clear answers on your borrowing power, help you understand if you’re in a position to land home approval, and help you find a home loan that’s right for your needs.

Paramount Finance Australia 6/20/24 Paramount Finance Australia 6/20/24

Rate cuts? Pencil them in for 2025

Put the party pies on ice and postpone those rate-cut celebrations for a while yet. The much-touted rate cuts we’ve been waiting for may not arrive until 2025. Here’s why rates could be staying higher for longer, and how to take action yourself.

June saw the Reserve Bank of Australia (RBA) keep the cash rate on ice – yet again.

Rates haven’t budged since November last year, and with the RBA not due to make another rate call until August, interest rates will remain in a holding pattern for at least two more months.

For home owners struggling to manage their home loan at current interest rates, it begs the question: ‘what happened to all the talk about rate cuts in 2024?’

Here’s what’s happening.

One reason why rates aren’t moving

Just a few months ago, some of our biggest banks were predicting interest rates would start to slide sooner rather than later.

The Commonwealth Bank and Westpac, for instance, expected rate cuts as early as September.

That’s now looking increasingly unlikely.

The reason lies with inflation.

The RBA is intent on getting inflation down to 2-3%.

Unfortunately, inflation is not playing along.

It’s currently sitting at 3.6%. So close, but not quite there.

When are rates likely to fall?

The RBA expects it could be “some time yet” before inflation is happily nestled in that 2-3% range – the point at which long-awaited rate cuts may start to kick in.

It’s not much of a date for home owners to work towards, though the big banks have a few time frames of their own.

Westpac and NAB now both see rates heading south from December. And while CommBank recently stated it expected rates to fall in November, there are signs it’s losing hope for a 2024 rate cut.

“Given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November,” CBA’s head of Australian economics, Gareth Aird, said.

“The risk to our call is increasingly moving towards a later day for an easing cycle.”

Meanwhile, ANZ doesn’t expect a rate cut before 2025. Ditto Citi economists and a growing number of other experts.

Long story short, even if we do get a December 2024 RBA rate cut, it’s probably fair to say we won’t see those cuts flow through to home loans until early next year.

And a note of caution: the RBA mentioned in its June statement that it is “not ruling anything in or out”.

It’s a grim reminder that a rate cut is not guaranteed before another rate hike.

This is why it’s so important to take action of your own.

How to manage higher rates

Revisiting your household budget, identifying areas where you can cut back, and tucking spare cash into an offset account to save on loan interest are all steps worth considering.

And don’t forget, tax cuts for 13.6 million Australians kick in from 1 July.

That could provide extra cash each pay day to help pay off your home loan.

It’s also a good idea to speak to us for a home loan review.

We can let you know if you still have the loan that’s right for your needs, or if you could save by switching – without having to wait for RBA rate cuts.

Better still, rising national property values may mean you could be in a great position to refinance.

Talk to us today for more tips on managing your home loan repayments and possibly trimming your loan rate. It may mean the party pies can come out sooner!

Paramount Finance Australia 6/16/24 Paramount Finance Australia 6/16/24

Is a tree or sea change on your horizon?

Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

The classic tune ‘Home among the gum trees’ is fast becoming a lifestyle anthem for a growing number of Aussies.

A surging number of city-slickers are heading to the bush or bay, new Commonwealth Bank research shows.

In fact, metro to regional relocations are now 20% higher than pre-Covid.

It goes to show that regional towns and cities have a lot going for them.

So what’s the appeal?

Along with a laidback lifestyle and the chance to see Skippy on your way to work, rather than countless sets of traffic lights, a key drawcard of regional living is more affordable housing.

Where are people moving?

The Sunshine Coast in South East Queensland is currently the nation’s most popular destination for Australian movers, securing a 16% share of net internal migration over the past 12 months.

Other popular areas outside our nation’s capital cities include the Gold Coast, Wollongong, Newcastle, Lake Macquarie, Moorabool, Geelong, the Alexandrina region, the Fraser Coast and Launceston.

Western Australia is also becoming an increasingly attractive destination with Busselton, Capel, Greater Geraldton, Northam and Albany all making their way onto various hotspot lists this quarter.

Regional home values vs city prices

Across Australia’s capital cities, the median home value is about $864,780, according to CoreLogic.

By comparison, the median value across regional markets is $626,888.

That’s a whopping $237,892 difference.

The price gap can be far bigger depending on where you’re moving from and moving to.

In Sydney, for instance, the median house value is $1,441,957. Head to regional NSW, and you could pay closer to $760,000 for a house – a saving of around $680,000!

Regional living can help cut loan repayments

Buying a more affordable home can have other flow-on benefits, such as a lower stamp duty bill.

It can also have a huge impact on home loan repayments.

For example, let’s use the above figures and pretend you’re deciding between purchasing an $864,780 capital city home and a $626,888 regional area home.

To keep things simple, let’s say you’ve saved up $173,000 for a 20% deposit on the $864,780 home – and you’ve also got extra money set aside to cover any stamp duty expenses or other fees (the exact amount would vary state to state).

Let’s also assume a home loan rate of 6.4%, which the Reserve Bank of Australia says is about the current average principal and interest variable rate, and a 30-year loan term.

On this basis, the initial mortgage for the city home would be about $692,000 and the monthly mortgage repayments on the city home would come to around $4,329 each each month.

For the regional property, your initial mortgage would be about $454,000 (assuming you put the full $173,000 towards the deposit) with monthly repayments in the order of $2,840.

That’s a monthly saving of $1,489 by moving to a regional area – extra money to spend on your home, yourself or your lifestyle.

What about capital growth?

No one can say with certainty how property values will perform in the future.

What we can do however is look at how house prices have performed across regional areas in recent years.

CoreLogic says values in regional areas have jumped 51.1% ($212,000) nationally since March 2020, compared to an average of 31.5% ($207,000) across our state capitals.

So in terms of dollar values, the capital gains across both markets have been fairly similar in recent years.

Ready for your home among the gum trees?

Okay, regional living isn’t for everyone.

Even for committed fans, moving from a capital city to a regional area calls for careful planning and research.

But if you’re hankering for a home with a more manageable mortgage, give us a call today to discuss loan options that could help you get that tree or sea change happening sooner.

Paramount Finance Australia 6/6/24 Paramount Finance Australia 6/6/24

Why three-in-four Aussies turn to a broker for home loan help

You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Borrowers are more spoilt for choice than ever before when it comes to home loans.

But who has time to sort through over 100 lenders in the market to pick out a loan that’s suited to your needs?

Your mortgage broker does.

But for the big end of town, increased competition can mean lower profit margins (and unhappy shareholders!).

That doesn’t mean brokers are at war with any particular bank though, as a few articles stated in the Australian Financial Review over recent weeks (here’s a great non-paywalled response).

As Mortgage and Finance Association of Australia (MFAA) CEO Anja Pannek succinctly put it: “Positioning banks as competing with brokers is like saying Hilton hotels is competing with travel agents, instead of Hyatt and Sofitel. It completely misrepresents how the mortgage broking industry works”.

What brokers do is streamline the home loan process. It’s just one of the reasons why mortgage brokers are the go-to choice for 74.1% of home buyers (and that figure has been steadily increasing!).

But our role isn’t just about helping you find a competitively-priced home loan with the features you may need.

We go much further.

Here are three other ways you can benefit from the support of a mortgage broker.

We work in your best interest

Behind the friendly face of your mortgage broker is a serious legal obligation.

We are bound by a Best Interests Duty.

It means we are required by law to always put your best interests first, providing home loan options that are based on your unique needs.

That matters because if a loan isn’t the right choice for you, it may not save you money in the long run, no matter how low the rate is.

Banks are not bound by the best interests duty.

Brokers can help guide the way

Buying a home is possibly the biggest purchase you’ll ever make.

It’s also something you’ll probably only do a handful of times over your life. But this is something we help people through every day.

We can act as a trusted guide to help you navigate the complex process of buying a home with confidence.

We can also help you assess your borrowing capacity, so you can buy with confidence, and we can explain where you can consider making shifts in your budget to become home loan-ready sooner.

And because we’re focused on making things more straightforward for you, we take the jargon out of home buying – we can help you get your head around complex issues like lenders’ mortgage insurance, or how to prepare if you’re buying at auction.

It’s all about mentoring our customers at every stage of their property journey.

We’re here for the long term

You and your home loan are likely to be together for a while. And we’ll be right there with you.

Our regular home loan reviews provide reassurance that your loan continues to be the right option for you, even as your life changes and evolves.

And when you’re ready to kick new goals – from renovating, to buying your next home, investing in a rental property, or simply refinancing – we’ll be ready to help guide you through the process.

Like to know more about how we can help? Call us today and discover why three out of every four Australian families come to a broker first.

Paramount Finance Australia 6/3/24 Paramount Finance Australia 6/3/24

First home buyers turn to Bank of Nan and Pop

Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

Most of us have special memories of pocketing a few treats from Granny and Gramps.

But it turns out those small gestures of affection we knew as kids are morphing into something far more valuable than a few sneaky lollies before dinner or a surprise Lego set.

Research by Compare the Market shows almost three-quarters of Aussie grandparents are giving their families a financial helping hand.

Around 13% are lending money, 9% are chipping in with household bills, and one-in-10 are helping their grandkids buy a first home.

It goes to show that we’re never too old for grandparents’ treats.

But if your Gramps and Granny are keen to help you get started in the property market, it’s important to have some open conversations first.

How grandparents can help

It’s not unusual for first home buyers to need support from family – especially in this day and age – and it can come in a variety of ways.

One option is for a close relative to act as a guarantor for a first home buyer’s loan.

It’s a big ask for grandparents though.

If the borrower can’t keep up the loan repayments, a lender can ask the guarantor to pay off the debt – something that could leave Nan and Pop financially skewered.

If they can afford it, another way for grandparents to help their grandkids buy a home is by gifting money.

What to be aware of

A cash gift doesn’t have to be huge to make a difference.

It can help grow a deposit or go towards upfront buying costs such as lenders’ mortgage insurance.

However, there are traps to be aware of.

You could get a ‘please explain’ from a lender when they see a lump sum of cash land in your bank account.

The bank may want to be sure it’s not a loan that grandma and grandpa expect to be repaid.

So, it can be a good idea for grandparents to write a letter spelling out that they are gifting the money unconditionally with no strings attached.

And while this should go without saying, it would be negligent of us not to stress the importance of nan and/or pop being completely sound of mind when gifting any money.

The last thing you’d want to do is leave them short in funding their retirement, or start a rift (or legal battle) with other family members who love and care for them as much as you.

Talk to us to find out how family can help

Buying a first home is a special milestone, and it’s extra special when family members rally around to lend a hand.

But as we’ve outlined today, it’s not without its potential pitfalls.

So call us today to find out the different ways your family might be able to help you buy a place of your own.

Paramount Finance Australia 5/23/24 Paramount Finance Australia 5/23/24

What you should know before buying ‘subject to finance’

Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Picture this. You’ve seen a home you’re crazy about, and you don’t want to miss out to another buyer. So, you sign on the dotted line and hand over your deposit.

Things are getting real now. But what if they’re not? What if you struggle to land a home loan?

It’s a scenario every home buyer dreads.

If you have to back out of the contract because you can’t get loan approval, you could lose your deposit.

One possible solution, however, is to make your offer ‘subject to finance’.

Why make an offer subject to finance?

In practical terms, making an offer subject to finance means an extra clause is added to the sale contract.

Essentially, it can allow the buyer to walk away from a sale with their deposit intact if mortgage finance can’t be arranged within a set timeframe.

Understandably, the seller won’t wait around forever. So, the time allowed to secure loan approval can be tight, often a matter of days.

However, a subject to finance clause could help you avoid a last minute race for finance – a pressure-cooker situation that could see you accept a loan or lender that’s not right for your needs.

The downside of buying subject to finance

There is a catch to making an offer subject to finance: the seller doesn’t have to agree to it.

In today’s property market, homes are selling fast – in as little as 10 days in some neighbourhoods.

With that sort of buyer demand, there may not be much incentive for a seller to agree to an offer that’s subject to finance.

Or, if you’re buying at auction, the sale is usually unconditional. Chances are you won’t have an opportunity to alter the sale contract.

These drawbacks highlight the value of speaking to us before you go home hunting.

Having your loan pre-approved, for example, can take away a lot of the uncertainty around securing finance.

Can I buy before I sell?

When you’re ready to climb the property ladder, another key question is often whether it’s better to sell first and buy later.

With money in the bag from the sale of your old home, you may be less concerned about making an offer subject to finance.

That said, if you see a place you want to buy before your home sells, a bridging loan could cover the funding gap.

The beauty of a bridging loan is that this type of finance usually requires interest-only payments, not principal and interest payments.

The downside is that the interest rate tends to be higher than for a traditional home loan.

Talk to us today

There’s a lot to plan for when you’re buying your next home.

Call us to streamline your purchase. From subject to finance offers to bridging loans, upgrading can be a lot less stressful when you know the options.

Paramount Finance Australia 5/16/24 Paramount Finance Australia 5/16/24

Not feeling the budget love? 4 ways you could still get ahead

If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

The 2024 federal budget is out, and you might be wondering what’s in it for you.

Sure, an energy rebate of $300 annually can help take the sting out of electricity bills, though at $75 per quarterly bill, it’s not a huge saving.

But you don’t need to rely on the federal budget.

Here are four strategies that could get your wealth growing.

1. Helping hands for first home buyers? There’s plenty available

Disappointed that the federal budget didn’t offer more support for first home buyers?

There is still a wide choice of home buying assistance schemes to pick from.

Take a look at:

– The Home Guarantee Scheme that lets eligible first home buyers, regional Australians, and single parents buy a place of their own with a low deposit (between 5% and 2%) and zero lenders mortgage insurance.

– The First Home Owner Grant, which is usually worth $10,000 but can be up to $30,000 (depending on your state) when you buy or build a new home.

Don’t forget stamp duty concessions (in most states) and the First Home Super Saver Scheme that can let first home buyers use their super to grow a deposit.

Not sure what you’re eligible for?

Talk to us to find out which first home buyer schemes you can tap into.

2. Rate relief for home owners? Make it happen sooner

Why wait for the Reserve Bank of Australia to cut rates?

You may be able to pocket rate savings of your own.

Lots of savvy home owners are jumping ship, with around $16.02 billion worth of home loans refinanced in March 2024.

It goes to show that savings can still be up for grabs for borrowers who switch to a lower rate home loan.

Call us today to find out how your loan shapes up, and discover how much you could save by switching.

3. Property investors: harness your property’s equity

Lending to property investors has jumped 31% in the past year.

It’s being driven by an 11% rise in property values since January 2023 – a jump that’s seen home owners notch up thousands of extra dollars in home equity.

The good news is that this home equity could potentially be used in place of a cash deposit to invest in an investment property.

Talk to us today about unlocking your home equity and becoming a property investor.

4. Tax relief: Stage 3 tax cuts are on the way

The federal budget has confirmed that 13.6 million Australians will pocket tax savings from 1 July.

And there’s a good chance you’re among them.

The Stage 3 tax cuts are expected to deliver an average tax saving of $1,888 a year, or about $36 weekly.

On the face of it, that’s not a game changer when it comes to your weekly budget, but it can help you in more ways than one.

That’s because it can also boost your borrowing power if you’re buying a first home, upgrading to your next home, or planning to invest.

RateCity has crunched the numbers, finding that for a single person on an income of $100,000, the Stage 3 tax cuts could add an extra $21,000 to their borrowing power.

A couple with a combined annual income of $150,000 could see their borrowing capacity jump by almost $30,000.

Call us to know more

If the federal budget has left you hankering for more, it’s time to take matters into your own hands.

Whether you’re a first home buyer, home owner looking to save on your home loan, or property investor looking to grow your wealth, call us today for insights into how you can take the next step in your property journey.

Paramount Finance Australia 5/9/24 Paramount Finance Australia 5/9/24

Low deposit scheme helps over 150,000 families buy sooner

Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

When you’re saving for a first home, growing a 20% deposit can be a tough challenge.

It’s certainly not made any easier by national property values soaring higher each month and cost of living challenges.

But there is one potential solution that has seen 156,000 first home buyers, single parents and regional Australians buy or build a home of their own over the past four years – it’s the federal government’s Home Guarantee Scheme (HGS).

How to buy with just a 5% deposit

The HGS helps eligible first home buyers and single parents buy a home sooner by requiring only a small deposit.

The scheme has three different parts.

First home buyers can take advantage of the First Home Guarantee, or the Regional First Home Buyer Guarantee if they live outside a major city, while the Family Home Guarantee is pitched at single parents buying a home.

The common thread is that the scheme lets eligible buyers get started on the property ladder with a smaller deposit – and no need to pay lenders mortgage insurance (LMI).

First home buyers may need as little as a 5% deposit, while solo parents can buy with just a 2% deposit.

The HGS doesn’t provide a cash payment or a deposit for a home loan.

Instead, the Federal Government guarantees the loan, which is the key to buying with a small deposit while avoiding LMI.

A head start on the property ladder

The big plus of the HGS is that it gives buyers a head start in the property market.

According to Domain’s latest First Home Buyer Report, it can take over six years to save a 20% deposit on an entry level home, depending on where you buy.

The catch is that by the time you’ve saved that sort of deposit, home prices may have soared higher, pushing the goal posts further out of reach.

However, the beauty of the HGS is that it lets first home buyers jump into the property market about four years earlier (on average) than they normally would.

Not all lenders are part of the HGS

The HGS does have eligibility requirements, including income thresholds and property price caps that differ by state.

Give us a call, and we can explain whether or not you’re eligible.

The other thing to be aware of is that not all banks have signed up to the HGS.

That’s why it’s so important to speak to us at an early stage.

We can save you plenty of time, by explaining which lenders offer low deposit/no LMI home loans under the HGS, and put forward to you loans and lenders that suit your needs.

Don’t delay, places are limited

The HGS is only available to a limited number of home buyers each financial year.

And not surprisingly, places tend to fill fast.

So if you’d like to find out more about using the scheme in the rapidly approaching new financial year – and whether you might be eligible to buy with just a 5% deposit and zero LMI – get in touch today.

Paramount Finance Australia 5/3/24 Paramount Finance Australia 5/3/24

Here’s why your borrowing power might soon get a lift

Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

The upcoming Stage 3 tax cuts have received plenty of attention – some good, some bad – so we won’t focus on the politics of it today.

But they are still expected to benefit about 13.6 million Australians, and how much tax you might save depends on your income.

A person on the national average wage of around $73,000 will pocket a yearly tax saving of $1,504, says the federal government.

If your income is, say, $100,000, you could expect to save $2,179 in tax each year.

For households juggling a cost-of-living crunch, the tax cuts can’t come soon enough.

But if you’re in the market for a new home, the tax cuts may offer an unexpected sweetener: a handy boost to your borrowing power.

What is ‘borrowing power’?

Your borrowing power, or borrowing capacity, refers to the amount a lender is willing to lend to you.

It’s based on several factors including the size of your deposit, your household expenses, and your after-tax income (or take-home pay).

The higher your after-tax income, the more you may be able to borrow.

That could mean being able to buy a home sooner, or buying a more expensive property.

How the tax cuts might affect your borrowing power

RateCity has crunched the numbers, finding that for a single person on an income of $100,000, the Stage 3 tax cuts could add an extra $21,000 to their borrowing power.

A couple with a combined annual income of $150,000 could see their borrowing capacity jump by almost $30,000.

It makes the upcoming tax cuts great news if you’re in the market for a first home, or if you’re upgrading to your next place.

Even if you don’t plan to borrow more, the increase to your take-home pay may make your current home loan repayments more manageable.

Other ways to boost your borrowing power

You may not need to wait for the Stage 3 tax cuts.

It is possible to increase your borrowing capacity in other ways, including:

1. Trim spending

Cutting back on non-essential expenses could free up extra cash to grow your deposit.

As household expenses are a factor many lenders look at when determining loan eligibility, trimming back regular costs could add to your borrowing power.

2. Cut back your credit card limit

When you apply for a home loan, lenders will look at the maximum limit on your credit card – not the outstanding balance.

That’s because you could max out the card just after buying a home, leaving less cash to manage mortgage repayments.

Contacting your card issuer to request a lower credit limit – or cancelling it altogether once paid off – could raise your borrowing power.

3. Increase income

Sure, it’s easier said than done.

But if you can take on extra shifts for a few months, convince the boss you deserve a pay rise, or start a side hustle, your bank balance – and borrowing power – could both benefit.

Find out how much you could borrow

Yes, there are online calculators that roughly estimate your borrowing power.

The catch is that these don’t take into account the different criteria applied by each lender. And they don’t know you, your expenses and your goals.

That’s why it’s important to talk to us to get a more accurate picture of your borrowing power.

We can get to know you, your expenses, and the kind of property you have your eyes set on, and then help you come up with a plan to try and make it happen.

Paramount Finance Australia 4/25/24 Paramount Finance Australia 4/25/24

How to know if you’re paying a fair price

We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

Buying a home is an exciting prospect, but it’s perfectly natural to have a big dose of nerves given that you’re likely committing to spending hundreds of thousands of dollars (or millions!).

But with a bit of research, and some other handy tips below, you can help protect yourself when the bidding or negotiations begin.

Why it’s important to pay a fair price

Paying above the odds for a home can have serious financial impacts.

The more you pay, the more you may need to borrow to fund the purchase. That can mean paying higher loan repayments, potentially leaving your budget thinly stretched, especially if interest rates rise again.

Worst case scenario, you could get caught out by a bank valuation that comes in lower than the purchase price – leaving you facing a funding shortfall.

The question is, how do you know if the asking price for a home is in line with the market, or if it’s completely over the top?

Research helps you nail the market

One way to hone in on what a home is worth is to have a pre-purchase valuation.

This involves a professional valuer examining the property and arriving at a value based on factors such as the location and size/condition of the home.

The catch is that a valuation can cost between $200 to $600.

It also takes time to organise, and in a fast-moving market the delay could see you miss out on a property.

A cheaper option is to do plenty of your own research.

Websites like realestate.com.au or domain.com.au can show the median house and apartment values for individual suburbs.

This gives you a good starting point, though as each home is different you’ll need to drill down further.

Factors that can impact market value

Some factors can see broadly similar properties have very different market values. Things to watch for include:

– The lot size a house sits on.
– The number of bedrooms and bathrooms.
– The condition of a home.
– Availability of parking (off-street parking is a plus!)
– Orientation. North-facing homes receive more natural daylight, and so often require less artificial lighting or heating.
– Energy efficiency. PropTrack found three out of five (59%) buyers say eco-features such as solar panels are important to help save on power bills.
– The street. Be wary of streets that become a commuter parking lot on weekdays.
– Views and outlook.
– Zoning and planned developments.

Bearing all these features in mind, check out recently sold properties similar to the one you’re planning to buy.

Pay particular attention to the final sale price – not the asking price. It is the selling price that sets the market.

Don’t be afraid to negotiate

If you have done your homework, you should have a reasonable idea if the asking price of a place is close to the mark or wishful thinking.

Remember, you may also have scope to pay less by negotiating on price. Bear in mind though that the longer negotiations take, the greater the danger of someone else jumping in and snatching the property from under you.

Get in touch with us about pre-approval

Last but not least, give us a call to discuss some of the benefits of home loan pre-approval.

It can help you act quickly when you see a home you’re interested in buying, and it sets a buying limit so you can negotiate with confidence.

Paramount Finance Australia 4/18/24 Paramount Finance Australia 4/18/24

Can you remember your home loan interest rate?

Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

It’s a fair bet that your home loan repayments are one of your biggest household expenses.

Yet it’s surprising how many borrowers haven’t kept up with what their home loan rate currently is.

In fact, a new report by Mozo shows that 42% of mortgage holders have no idea what interest rate they’re paying on their home loan.

And it’s an oversight that can cost home owners dearly.

How does your loan rate shape up?

It’s not just that large numbers of borrowers can’t pinpoint their loan rate.

Mozo also found one-in-five home owners have never compared rates since taking out their loan.

Your home loan may have had a competitive rate back in the day, but in a rapidly changing mortgage market, that may no longer be the case. And with the cash rate at its highest since late 2011, there’s little room for complacency.

For a quick check of how your home loan rate stacks up, head to your latest loan statement to find out what it is. It should show the rate you’re paying. Or call us, and we’ll let you know.

By way of comparison, the average home loan interest rate for owner-occupiers is currently 6.4%, and 6.3% for new home loans, according to the Reserve Bank of Australia.

Why it pays to regularly review your home loan

Staying on top of your loan isn’t just about the rate you pay.

Your loan might have been the right choice for you a few years ago. But our lives evolve, and your mortgage may not have the features you need for your current lifestyle and budget.

That’s why it’s worth taking a close look at your loan at least annually, or whenever you experience a major life change such as starting a family.

Understanding how your loan is performing for both rate and features is easy. Speak to us about a home loan review.

As part of our review, we can let you know:

– the rate you are paying;
– if your loan offers the features you want; and
– whether you could save by refinancing.

Is refinancing right for you?

If you’ve been wondering if you could do better on your home loan, give us a call today to discuss your refinancing options.

We’ll help you work out if refinancing is the right step for you and how much you could save by switching to a new loan and/or lender.

Paramount Finance Australia 4/11/24 Paramount Finance Australia 4/11/24

Plot twist: Millennials are Australia’s most active property investors

When it comes to buying investment properties, younger Australians are punching above their weight, with Millennials taking the title as the nation’s most active generation for property investment.

When it comes to buying investment properties, younger Australians are punching above their weight, with Millennials taking the title as the nation’s most active generation for property investment.

Investors are continuing to flock to the property market, with the Australian Bureau of Statistics saying the volume of new investor loans in February was 21.5% higher compared to a year ago.

Investment loans now make up over half of the growth in new loans over the past year.

But in an unexpected twist, it isn’t older generations of Aussies who are leading the charge to buy rental properties.

Younger investors flex their muscles

New data from the Commonwealth Bank shows Millennials (those born between 1981 and 1996) accounted for almost half (46%) of the bank’s new property investors in 2023.

And almost one in three of those buyers purchased an investment property on their own, without the help of a partner.

Gen Xers (1965 – 1980) are also snapping up rental properties, accounting for 37% of CommBank’s new investment property loans throughout 2023.

Rentvesting – get into the market sooner

Rentvesting is buying property where you can afford, possibly a smaller property in a lower-cost area, and then renting where you want to live.

The CommBank data shows plenty of investors are taking this approach and it makes sense: the average investment loan size is just over $528,000 compared to $624,000 for owner occupiers.

And remember, if you purchase the right property, as an investor you could expect to earn rental income. That’s extra cash for loan repayments.

In this way, rentvesting could be an opportunity to get started on the property ladder sooner rather than later, without having to make too many lifestyle sacrifices. As the investment property grows in value over time, it can become the stepping stone to buy an owner-occupied home.

The market seems attractive for investors right now

The property market offers plenty of appeal to investors right now.

Rental vacancy rates are at a record low of just 0.7% nationally. Property listings have increased in most cities, giving buyers more choice, and the past 12 months have seen rents skyrocket 11.4% across our state capitals.

Add in growing expectations that interest rates will start to fall later this year, and CoreLogic says it’s likely that property values will continue to rise, giving those who buy today the potential to notch up handy capital gains.

Are you ready to become a property investor?

Talk to us today to find out how much you could borrow, and your likely loan repayments. It could help you become a property investor sooner!