Fact Sheet - Discharge of Mortgage

View in PDF - Click Here

Newsletter - May 2012

Hi Robert, May 2012 What features do you look for when buying a new property? How about a sunny aspect, modern kitchen, good neighbours and a supermarket on the street corner? A recent survey of real estate agents posed the question - 'what do buyers want?' - uncovering some surprising results. Over the page we focus on successful strategies for refinancing - 'Refinancing Mistakes to Avoid' - as well as how to finance your dreams of property investment --- 'Affordable Property Investment'. Also featured in this issue; some handy tips for overcoming networking nerves, including preparing ice-breaker questions and conversation openers ('Network Success' - article 4.) Enjoy this newsletter and feel free to pass it on to family and friends. Kind Regards, Robert Ward & John McLennan Directors - Equitimax Pty Ltd Equitimax Pty Ltd PO Box 929 Chatswood NSW2057 Tel: 02 9411 5322 Mob: 0417 448 691 Fax: 02 9411 5200 1. Buyers Wish List 2. Refinancing Mistakes to Avoid 3. Affordable Property Investment 4. Book Review 5. Network Success 6. Did you know? Buyers Wish List Multiple bathrooms are rated as number one on a wish list of features that buyers look for in a new home. The results of a national pool of 114 real estate agents have uncovered some surprising research about what buyers want. The survey, commissioned by Turf Australia, found that 42 per cent seek more than one bathroom and 41 per cent desire a quiet street. A decent sized backyard was the next most sought out by 34% of buyers, followed by being close to a bus route or shops (20%) and off-street parking (13%). It seems that it is not any old backyard that buyers want, but one with grass - the survey found that nationally a lawn could add 18 per cent, or just over $75,000 in value on the average $420,000 home. Three quarters of real estate agents said buyers want a safe playing area for their kids while a third believe a lawn adds to the look and feel of a home. A lawn was shown to add the most value in Victoria (19%), followed by NSW (16%), Queensland and South Australia (12%) and WA (9%). As a seller, the key message is that it pays to put some time into making sure your backyard - particularly the lawn - is in tip top condition! Refinancing Mistakes to Avoid Avoid these common mistakes and refinancing your home loan should be a simple, trouble-free experience. Successfully navigating the refinancing process can enable you to take advantage of better rates and features, as well as provide finance for a renovation, construction or property purchase. Mistake # 1: A history of arrears Lenders want to avoid taking on risk, which is why they ask for at least six months of loan statements in order to check your conduct. They won't be impressed with missed/late repayments or going over the limit on any lines of credit, so wait until you have six months of clean history before making an application. Mistake # 2: Too many credit enquiries Every time you submit an application to a lender, it is recorded on your credit report. When the lender sees a number of applications they wonder why your application hasn't yet been approved by another lender - this may be all the reason they need to decline the application. It's our business as your mortgage broker to know how the criteria varies among different lenders and which lender you will have most success applying to. Mistake # 3: Not thinking ahead When shopping for a new loan, you're probably looking for one that will suit your needs now, but what about a few years down the track? If you move house or take a career break to raise a family, the loan you choose needs to accommodate these life changes. Mistake # 4: Failure to lock it in If you fail to lock-in the new favourable rate of interest on your new loan, it may increase by the time your loan gets processed. If you wish to lock-in a rate we can offer that facility. Mistake # 5: Not taking costs into account Sometimes the savings you could make by switching loans are outweighed by the expense involved. Make sure you know what up-front fees you will be charged and conduct a thorough cost-benefit analysis before you go ahead. Let us know if you need us to do this for you. Mistake # 6: Poor paperwork Not supplying all the supporting documents when putting in your application can send it back down the bottom of the pile and the waiting game will start over again. It's equally important when your loan is approved to review the documents properly before signing for a clear idea of the terms and conditions. As your mortgage broker we are experts at guiding borrowers through the paper chase and explaining what's in the fine print. Give us a call anytime about helping you successfully navigate the refinancing process. Affordable Property Investment A large bank balance is not a prerequisite for affording an investment property. There are many options available to help you get a foot in the door including using home equity, tax incentives and tailored investment loans. Equity If you already own a property, you can use its equity ('unrealised value') to fund your next property purchase. Equity is the difference between your home's market value and the balance of your mortgage, so when your property increases in value, the amount of equity also increases. Refinancing your mortgage allows you to access this increased equity to use as a deposit on another property purchase. The property you live in is not the only source of equity - you can use the equity in your business, parents' home or an investment property. Contact us for help in working out how much equity you may have available and how it can be used as a source of funding. Negative gearing Negative gearing lets you invest in an asset of greater value than you could afford using your own money. It occurs when you borrow to invest in an income-producing property, which costs more to own and maintain than the rental income you receive from it. This 'loss' can be claimed as a tax deduction, reducing the tax you are required to pay on income earned elsewhere, such as from a salary. Contact us to find out more about negative gearing and what precautions you should have in place to ensure this investment strategy works for you. Loan choice Choose your loan carefully because the way you fund your investment property will impact on the returns you receive. Investment loans differ in their structure and flexibility - while one might be designed to help you reduce your debt more rapidly, another might be designed to help you purchase more investment properties in the future. There are a range of loan features especially useful for investors such as interest only, interest in advance, mortgage offset, split loan and line of credit. We can work with you to match your investment goals to the right type of loan from our large panel of lenders. Book Review 'IMAGINE' By Jonah Lehrer Did you know that the most creative companies have centralized bathrooms? That brainstorming meetings are a terrible idea? That the color blue can help you double your creative output? From the New York Times best-selling author of How We Decide comes a sparkling and revelatory look at the new science of creativity. Shattering the myth of muses, higher powers, even creative "types," Jonah Lehrer demonstrates that creativity is not a single gift possessed by the lucky few. It's a variety of distinct thought processes that we can all learn to use more effectively. Network Success Networking is a great way to make contacts and establish relationships, but not everyone is good at small talk. Luckily there are tried and tested tactics for breaking the ice and getting a conversation going. 1. Be prepared Think through in advance some topics you can talk about. You don't need to have a shared interest to connect with others, you just have to share your interests - talking about something that you're passionate about will automatically engage those around you. You can also prepare some ice breaker questions in advance. Choose questions that are open-ended so the listener can't just answer with a yes or no. 2. Make the first move Finding someone to talk to in a room of strangers can be daunting but remind yourself it is preferable to standing by yourself. A good tactic for breaking into conversations is to make eye contact with someone, smile at them and ask: 'do you mind if I join you?' Another tactic is to ask someone else to break in and introduce you. If you have just arrived at an event and don't know anyone there, ask the organiser to introduce you. Once you have made your first contact, you can then ask them to introduce you to their contacts. 3. Listen People enjoy being listened to, so you don't need to always do the talking to engage with others. If you can get someone to speak about their experience and opinions - while you listen with interest - you have a firm foundation on which to build a relationship. 4. Help others Networking is a two-way street so you have to be prepared to give as much as you take. It's not all about what you can achieve, but also about what you can do to help others. 5. Follow up Don't let all your efforts in making contacts go to waste; always exchange business cards/contact details and follow up after the event. Jot down some details about the person obtained from your first meeting and you can use this as a conversation starter next time you make contact. Did you know? Buying off the plan and co-ownership may be worth considering if you are looking for an affordable way to enter the property market. Purchasing a property prior to construction (buying off the plan) can bring with it tax savings and capital gains, but it is not without its risks. Do your research, get third party advice and triple check the fine print to ensure you steer clear of unscrupulous developers and end up with an investment property that delivers good returns. Teaming up with a family member or friend (co-ownership) can help you raise a deposit and meet your investment goals sooner. It's essential that you treat the arrangement as a business deal and obtain legal advice to draft a co-ownership agreement setting out the rights and obligations of each person with a share in the property.

Broking Body warns against 'laughable' One Big Switch

Here is a good article from Broker News.
Choice and One Big Switch have offered great deals based on Collective Bargaining.
Equitimax does not think this will be any better than what we can currently do and Australian Finance Group (AFG) general manager of sales and operations Mark Hewitt agrees.


AFG warns against 'laughable' One Big Switch
_{By Ben Abbott | 30/09/2011 8:00:00 AM}           

Mortgage industry aggregator Australian Finance Group (AFG) has come out in support of the broker proposition, by issuing a warning to consumers over the loan offer being provided by One Big Switch.

Following widespread criticism from the broking industry over the group buying exercise masterminded by consumer group Choice, AFG's general manager of sales and operations Mark Hewitt said the problem is One Big Switch had failed to attract major lenders to its panel.
"The proposition would be laughable if they weren’t putting people’s property on the line," Hewitt said.

Hewitt also questioned 'sweeping pronouncements' being made by representatives of the organisation - as reported in the Australian Financial Review - about financial advice in Australia being 'crap', when they are not prepared to provide financial advice themselves.
"The disclaimers on the emails that they’re sending out makes it clear that their so-called ‘members’ are on their own when it comes to deciding whether or not a mortgage deal is right for them," Hewitt said.

"Providing the best deals in the market is what aggregators and brokers do every day"

Hewitt said in the media announcement. "In the past twelve months AFG has refinanced $9.3bn of mortgages – and we are only one of several major broker groups," he said.

Earlier this week, non-banks Resimac, Firstmac, Mortgage Ezy and Mortgage Port were revealed to be the first lenders cooperating with One Big Switch on its consumer buying campaign.

Interest Rates Continue to Fall - Time to Review your loan and save

Two Minutes could save you $’000s*

Let Equitimax review your Loan

The Current Banking Environment

·         International Economies are under the Spotlight
·         Ratings Agency - Downgrades
·         Australian Banks recording record profits
·         Slowing Australian Retail Market
·         Tightening of Lending Credit Policies
·         Talk of an Interest Cut by the RBA (previously it was tipped to be an Increase)
·         Cost of Funding reduced
·         Decline First Home Owners and New Loans Applications
·         Lenders offering cheaper pricing for loans with higher equity ratios
·         Increased Competition for Quality Loans

MORE COMPETITION = BETTER INTEREST RATES 
·         Fixed Rates are dropping
·         Standard Variable Rate has remained unchanged
·         Bigger discounts are available for new money applications

IF YOU DO NOTHING  .  .  .  .  .  .

YOUR RATE WILL NOT CHANGE !

·         Why are you not getting the best rate? 
·         Ask us how you can.

REVIEW YOUR LOAN and SAVE THOUSANDS*

The review should take you less than 10 mins – All we need is some information about your current loan such as

1.       Your Current Loan Balance

2.       Your Current Interest Rate

*savings depend on your specific loan. For example if Equitimax could save someone with a $500,000 loan just 0.10% that would save them $2,000 in just 4 years. 

Equitimax FAQ’s

Q. I want a cheaper rate, what are my options?

A.     (a) Refinance your loan to a cheaper lender – Equitimax can help.

(b) Apply for a loan increase – your lender may give you better pricing – Equitimax can help.

(c)  Apply for pricing from your existing lender – Equitimax can help.

(d) Consolidate loans – your lender may give you better pricing – Equitimax can help

Q. What Interest Rate should I be getting?

A. This depends on your specific loan. There is no correct answer.  Your loan rate depends on your current lender, the amount of your loan, the equity you have in your loan, you loan history & what sort of home loan you have. 

Most Variable Rates are around 7.0% at the moment.  So if you are paying a rate higher than 7.0% you should definitely give us a call.

Q. Is it a good time to fix?

A. Fixed rates are changing almost daily – sometimes it is best to wait until the dust settles. 
The good news is that they are going down and we believe there will be more lenders dropping their fixed rates soon.

Q. But Fixed Rates are currently cheaper than Variable Rates?

A. Fixed rates vary from lender to lender, however it is possible to fix in between 6.39%% and 6.79% for 2-3 years.  In most cases this will be a reduction from what clients are currently paying and therefore this is a real saving.

Q. What Fixed Rates are available at the moment?

A. Below is the table of rates as at 23/08/2011

Lender	1yr Fixed	2yr Fixed	3yr Fixed	4yr Fixed	5yr Fixed	Standard	Basic
AMP Banking	6.69%	6.69%	6.69%		6.99%	7.79%	7.02%
ANZ Bank	6.59%	6.44%	6.44%	6.89%	6.99%	7.80%	7.10%
Bankwest	6.99%	6.89%	6.99%	7.54%	7.59%	7.70%	7.10%
Citibank	6.79%	6.34%	6.34%	6.45%	6.74%	8.02%	6.95%
CBA	6.59%	6.59%	6.59%	6.99%	6.99%	7.81%	6.99%
Heritage	6.85%	6.95%	7.05%		7.49%	7.44%	7.03%
Homeside Lending	6.59%	6.59%	6.59%	7.39%	6.94%	7.70%
ING Direct	6.39%	6.39%	6.39%	6.89%	6.99%	7.34%	6.96%
Macquarie	6.50%	6.55%	6.69%	6.99%	6.99%	7.80%	6.99%
NAB	6.94%	7.09%	7.09%	7.49%	7.54%	7.67%
St George Bank	6.79%	6.59%	6.59%	6.99%	7.04%	7.80%	7.08%
Suncorp	6.59%	6.40%	6.45%		7.15%	7.83%	7.25%
Westpac Bank	6.99%	6.99%	6.79%	7.54%	7.64%	7.86%	7.16%

*these rates are a guide only to demonstrate the difference between lenders and were correct as at 23/08/2011
Professional Package Discount are based on the Standard Rate. For Lender Specific Comparison Rates please contact Equitimax.

Q. What do I need to do?

A. SIMPLE – Get Equitimax to help.

1.       Just ask us to review your loan.
With some Banks we can find out your interest rate & loan balance, however not all banks pass on this information to us.

2.       Send Equitimax an email              CLICK HERE TO EMAIL US
(a)    The Loan Balance $
(b)   Your Current Interest Rate                %
(c)    Your Lender  
(d)   Any other details you think are relevant