First Time Buyers: Your Time is Now

For first time buyers, navigating the property market can be a daunting yet exciting journey. With the current market dynamics, it’s an opportune moment to consider stepping into homeownership. This guide aims to provide insights and advice for first time home buyers looking to make their mark in the property world.

Current Market Analysis for First-Time Buyers

The real estate market is always evolving, and understanding these changes is crucial for first time buyers. Recent trends indicate a shift in property prices and interest rates, creating unique opportunities. While challenges such as market volatility exist, the potential for finding value in this landscape is significant.

Financial Considerations for First-Time Buyers

One of the most critical aspects for first time buyers is financial planning. It’s essential to assess your budget, explore various mortgage options, and understand the long-term implications of a home loan. Economic changes, such as fluctuating interest rates, can impact your buying power, making it vital to stay informed and prepared.

Benefits and Challenges of Buying Now

The current market offers several benefits for first time buyers. Lower interest rates in some regions can make mortgages more affordable. However, challenges like rising property prices in certain areas should not be overlooked. Weighing these factors is key to making a well-informed decision.

Government Schemes and Incentives

Governments often provide schemes and incentives to support first time home buyers. These can include grants, tax concessions, and other financial aids that make entering the property market more accessible. Staying updated on these offerings can significantly aid in your home buying journey.

Exploring First-Time Homebuyer Schemes and Incentives

Grants for Down Payment Assistance: Delve into government grants designed to assist with down payments. Many jurisdictions offer financial support to first-time homebuyers, helping them accumulate the necessary funds for a down payment. Understanding the eligibility criteria and application process for these grants is essential for maximizing financial benefits.
Tax Concessions and Rebates: Explore the various tax concessions and rebates available to first-time homebuyers. Governments may provide tax incentives, such as reduced stamp duty or exemptions for qualifying purchases. Familiarizing oneself with these incentives ensures that homebuyers can optimize their financial position during the property acquisition process.
Low-Interest Loan Programs: Discuss government-sponsored low-interest loan programs aimed at supporting first-time homebuyers. These initiatives often provide access to loans with favorable interest rates, easing the financial burden associated with mortgage repayments. Awareness of such programs enables homebuyers to explore cost-effective financing options.

Regional and National Programs for Homebuyers

Understanding Regional Variations: Highlight the importance of understanding regional variations in government schemes. Different regions may have specific programs tailored to their unique housing market challenges and economic conditions. Prospective homebuyers should research and compare regional offerings to capitalize on the most advantageous schemes available.
National Initiatives for Homeownership: Explore national initiatives aimed at promoting homeownership. Some countries implement comprehensive homeownership programs that encompass grants, subsidies, and favorable financing terms. Being aware of these overarching initiatives allows homebuyers to tap into a range of benefits provided at the national level.
Community-Specific Incentives: Discuss community-specific incentives that complement government schemes. Certain communities or municipalities may offer additional incentives to encourage property ownership. These can include community grants, development incentives, or partnership programs that enhance the overall attractiveness of homeownership in specific areas.

Long-Term Investment Perspective

Buying a home is not just a lifestyle choice but also a long-term investment. For first time buyers, it’s important to consider the future implications of homeownership, such as property value appreciation and building equity, compared to renting.

Seeking Professional Advice

The complexity of the property market makes seeking professional advice invaluable. Real estate experts and mortgage brokers can offer tailored guidance, helping you navigate through the maze of property buying and financing.

Preparing for Homeownership

Preparation is key for first time buyers. This includes improving your credit score, understanding the home buying process, and being ready for the responsibilities of homeownership. A solid preparation will pave the way for a smoother home buying experience.

For first time buyers, the current market presents both challenges and opportunities. With the right approach and guidance, this could be your time to step into the world of homeownership.

Is now a good time for first time buyers to enter the property market?

Yes, current market conditions, including changes in property prices and interest rates, present unique opportunities for first time buyers to enter the property market.

What financial considerations should first time buyers keep in mind?

First time buyers should consider their budget, explore different mortgage options, and understand the long-term financial implications of buying a home, especially in light of fluctuating interest rates.

What are the benefits of buying a home in the current market for first time buyers?

Benefits include potentially lower interest rates in some areas, making mortgages more affordable, and the opportunity to invest in a property that may appreciate in value over time.

What challenges might first time buyers face in the current market?

Challenges can include rising property prices in certain areas and market volatility, which may impact affordability and the availability of desirable properties.

How important is seeking professional advice for first time buyers?

Seeking professional advice is crucial as it helps navigate the complexities of the property market and mortgage process, ensuring informed decision-making.

What should first time buyers consider when choosing a property?

First time buyers should consider factors such as location, property size, potential for appreciation, and their long-term living needs when choosing a property.

We’d love to help you take that first step towards buying your very own home. Give us a call to discuss how we can make the home loan process simple and stress-free, so all you have to worry about is the house-hunting.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.

About the Author:

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.

SERVICE LOCATIONS

Controlling the Cash Flow

Money comes and money all too quickly goes. But if you are not keeping track off the flow of your bank account, you are making a pretty simple financial mistake: no cash-flow control. And it is something that will end up costing you dearly.

With Christmas approaching, there is no better time to organise your family’s financial plan and to manage those seasonal expenses. By getting on top of the boring day-to-day transactions that dictate your bank balance, you will find that your monthly budget will start to run itself, leaving you more time and money to spend on life’s fun stuff.

You will:

Save Money – by not slipping into the red, you will save on bank charges and avoid having to pay high interest rates. Most utility companies also offer prompt-payment discounts.

Save Time – automatic payments and direct debits mean you will spend less time online banking and shuffling piles of paper bills each month.

Stop Worrying – by knowing down to the last cent how much you have to spend each month, it will help you match your spending to your budget, leading to fewer sleepless nights stressing about the state of your finances.

Start Saving – a financial roadmap will help you navigate a long-term savings plan.

Five Easy Stages to Managing Your Cash Flow

1. Start Your Plan

set aside a quiet half-hour, grab a pen and paper and write down what you have coming in every month and what you need to pay out.

2. Look Ahead

plan for a whole year. Include every essential utility and bill: rent/mortgage, water and electricity, rates, insurance, school fees, work-travel/car costs etc.

3. Bank Clever

set up different bank accounts: rent/mortgage, bills, savings and your everyday living expenses. After you are paid each month, move your funds into your different accounts, and leave the money there.

4. Direct Debits

ensure all your essential bills are paid using automatic payments. Big bills, such as insurance, can be spread throughout the year to ease the pain. By automatically moving your money to your different accounts at the start of the month, you will never have to worry about missing payments again.

5. Put it on the House

if you have personal loans, talk to your trusted mortgage broker about consolidating them onto your home loan. Bank mortgage rates are very low, and are likely to remain that way for a while. Not only will you streamline your monthly cash flow, you will save money too.

By clearing the decks of all your essential bills each month, you will know exactly what you have to spend on day-to-day living expenses, the small luxuries that make the daily grind less grinding, and the occasional mall-splurge on your plastic.

A fear of the financial future is really just a fear of the unknown. By defining your budget and getting to grips with your cash flow, you will be able to look forward to a brighter and more prosperous year.

What is Cash-Flow Control?

Cash-flow control refers to the practice of tracking the inflow and outflow of money in your bank account. It helps you avoid financial mistakes and enables you to manage your monthly budget effectively.

How can I start managing my cash flow?

Set aside a quiet half-hour to write down your monthly income and essential expenses. Plan for a whole year and include every essential utility and bill.

What are the benefits of managing my cash flow?

Managing your cash flow can help you save money by avoiding bank charges and high-interest rates. It also saves time as you can set up automatic payments and direct debits, and reduces stress by helping you match your spending to your budget.

How can I organize my bank accounts for better cash flow management?

Setting up different bank accounts for rent/mortgage, bills, savings, and everyday living expenses is recommended. After you get paid each month, move your funds into these different accounts.

What is the role of direct debits in cash flow management?

Direct debits ensure that all your essential bills are paid automatically. This helps you avoid missing payments and keeps your finances in order.

Can I consolidate my personal loans onto my home loan?

Yes, talking to your trusted mortgage broker about consolidating personal loans onto your home loan can streamline your monthly cash flow and potentially save you money.

Ready to take control of your finances? Contact Zippy Financial today for expert guidance and unlock a world of better financial choices.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Service Locations

The Definitive, Proven, Best Time to Buy Property in Australia

“Is now a good time to buy?”

This is a question that those who work in finance and property hear at least a few times a week. Discussing property prices and where they are headed is practically a national hobby; we all want to know what is the next for our beloved bricks and mortar.

In the midst of the silly season, arguably one of our busiest periods of the year, this question crops up again.

People want to know whether there are certain times during the year when the season favours them as a buyer, Christmas being one of them. Is there going to be less competition in December as other buyers are preoccupied or does annual leave mean they will have more time to wander through open homes?

And are sellers so keen to secure a sale that they are willing to entertain any and all offers?

Of course, the answers to these questions are: it depends. Making the decision to sell a home is a personal one, and there are so many influencing factors that can mean a vendor is under more or less pressure to sell.

Similarly, making the decision to buy (whether it is a home to live in or as an investment) is a personal one. Your job status, length of employment, savings in the bank and a borrowing power will all influence the kind of decisions you can make around purchasing a property.

For these reasons, I truly believe that the best time to buy a property is when you are ready. To me, being ‘ready’ means: you have saved a sufficient deposit; you have paid off your personal debts as best you can; you have a stable employment history; and you have met with a mortgage broker to get a clear understanding of your borrowing power.

Assuming all of these boxes have been ticked and you are ready to start property shopping with a purpose, is Christmas time a good time of year to browse the real estate classifieds?

Is Christmas a Prime Time for Property Shopping?

Supply Dries Up

Most owners who are planning to sell their property, generally list it in October or November – unless their circumstances are unique, few vendors come to the market in December.

That means there is an entire month where there is no fresh supply hitting the market. Others who are shopping the market see the same old listings over and over and they begin to get ‘stale’. Any seller who has been on the market for several weeks and is approaching Christmas Day without any serious offers, will begin to re-think their pricing and may be willing to negotiate on price.

Other Shoppers get Fatigued

Those other property buyers I mentioned, the ones who tire of the stale listings. If they have been watching the market through October and November, they are often beginning to fatigue by December. Like takes over in the form of festive season parties, work and social commitments. Throw in a few public holidays and closed real estate offices, and they may take a few weeks’ off the property search – meaning there is less competition in the market.

People Prepare for Big Life Changes

New jobs, new suburbs, new cities, new decisions: the end of one year and the beginning of a new one is a time of change for plenty of people. Again, this means some Aussies are just too busy to shop the property market with any real intention to take action, which gives you an edge if you are a serious buyer.

Decisive Action Pays Off

We all know what the stress of Christmas is like: we are battling the crowds for groceries, lapping shopping centre parking lots for 20 minutes to secure a car park, and “celebrating” with more than our fair share of relatives and friends. If we are also trying to sell a property at this time, then the news that someone has made an offer is festive music to our ears.

The moral of the story? If you are willing to put pen to paper and make a formal offer on a property, the seller is likely to review your offer very seriously.

I’ve known of both investors and homeowners who have secured some great value deals during December, because they have been willing to take action at a time when others banish property shopping to the “too hard” basket.

Is there a specific best time to buy property in Australia?

The article suggests that the best time to buy property is when you are personally ready. Factors like having a sufficient deposit, stable employment, and a clear understanding of your borrowing power should be considered.

Is Christmas a good time for property shopping?

According to the article, Christmas could be a favorable time for property shopping. Supply usually dries up in December, and other shoppers may get fatigued, reducing competition.

What factors influence the decision to buy a property?

Your job status, length of employment, savings, and borrowing power are some of the factors that can influence your decision to buy a property.

How can I know if I am ready to buy a property?

You are considered ‘ready’ if you have saved a sufficient deposit, paid off personal debts, have stable employment, and have consulted a mortgage broker to understand your borrowing power.

What happens to the property market in December?

Most property owners list their property in October or November, and few come to the market in December. This results in less fresh supply and possibly more willingness from sellers to negotiate on price.

How can I get an edge in the property market?

Taking decisive action and making a formal offer can give you an edge, especially during busy times like the Christmas season when others may be less focused on property shopping.

As I hinted at earlier, the best time to buy a property is not a particular time of the year – it is when you personally are in the best position to buy. The only way to know this is to have a good look at your current financial position, so you can work out where you stand and what your options are. As experienced mortgage brokers, our team would be more than happy to review your finances and give you an idea of your borrowing power, so you can take action towards your property goals and dreams. Contact us today on 1300 855. 022.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

When Can We Expect Fixed Rates to Drop?

The past few months have seen interest rates on fixed home loans deliver more ups and downs than a rollercoaster.

As recently as April 2023, several lenders were starting to cut their fixed rates. Fast forward to July and the major banks – NAB, Westpac, ANZ and the Commonwealth Bank 0 have all upped their fixed rates.

Now you won’t find a fixed rate below 6% among the big four banks.

But Aren’t Interest Rates Expected to Fall?

Homeowners battling high rates are generally being urged to “hang in there” because interest rates are expected to slide down from their current highs over the next 18 months.

Westpac is predicting the Reserve Bank’s cash rate will drop to 3.85% by the end of next year. Better still, NAB is anticipating the cast rate could dip to 3.10% by late 2024.

So, Why Are Fixed Rates Rising Then?

Some lenders are stepping up their fixed rates because they believe rates may go higher before the trend lower.

NAB and Westpac are both tipping the cash rate, currently sitting at 4.10% could go as high as 4.60% by the end of the year. Over at the Commonwealth Bank, the expectation is for one more rate hike, taking the cash rate to 4.35% with a chance the cash rate may ratchet up to 4.60%.

This can be confusing, but the main point is that the prospect of rates heading higher before they head south again is a key factor driving some fixed rates higher.

What Should You Do?

The first step is to bear in mind that forecasts are just that – predictions. Not even the banks have foolproof crystal balls.

And the recent news that inflation slowed in the June 2023 quarter, with the quarterly price rising being the lowest since September 2021, could see the Reserve Bank ease back on the interest rate dial. It could even bring fixed rates back down.

It is also worth pointing out that not every lender is lifting their fixed rates.

A few smaller lenders have trimmed their fixed rates, with some still offering rates below 6.0%.

That is why it is so important to get in touch so we can help you explore a wide range of lenders and loan products.

Why have fixed rates been fluctuating recently?

Fixed rates have been on a rollercoaster ride, especially among the major banks. As of April 2023, some lenders started to cut their fixed rates, but by July, the big four banks increased their fixed rates.

Are interest rates expected to fall in the future?

Yes, homeowners are generally advised to “hang in there” as interest rates are expected to decrease over the next 18 months.

Why are some lenders increasing their fixed rates?

Some lenders are increasing their fixed rates because they believe that rates may go higher before they start to trend lower.

What are the banks’ predictions for the cash rate?

NAB and Westpac predict that the cash rate could go as high as 4.60% by the end of the year. The Commonwealth Bank expects one more rate hike, taking the cash rate to 4.35%, with a chance it may go up to 4.60%.

How did the recent news about inflation affect interest rates?

The recent news that inflation slowed in the June 2023 quarter could lead the Reserve Bank to ease back on interest rates, potentially bringing fixed rates back down.

What should homeowners do amid these rate fluctuations?

Homeowners should explore a wide range of lenders and loan products to find the best rates. Locking in your loan rate can bring certainty to your budget.

Your Next Step

Locking in your loan rate can bring certainty to your budget and eliminate the stress of the rollercoaster rate ride.

If you are not sure whether to go variable or fixed – or a combination of both – get in touch to see how the numbers stack up for your situation.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

Where Homeowners Are Spending $1 Billion a Month

In the ever-evolving landscape of the Australian housing market, homeowners are continuously finding new ways to invest in their properties. The trend of home renovations continues to surge, with Australians collectively spending around $1 billion each month on home improvements. This trend, driven by both necessity and desire, highlights the changing priorities and aspirations of homeowners across the nation.

The Current Housing Market and Homeowner Trends

The current state of the housing market has a significant influence on homeowner decisions. With rising property values and a competitive market, many homeowners are opting to renovate existing properties rather than purchasing new ones. This trend is particularly noticeable among first homeowners, who are looking to add value to their initial investments.

Market Dynamics Impacting Homeowner Trends

Property Value Escalation: Understand the dynamics of rising property values. Analyze the factors contributing to the escalation, such as demand-supply imbalances, economic conditions, and regional growth. This awareness provides insight into the broader market trends influencing homeowners’ decisions to renovate rather than buy.
Competitive Real Estate Landscape: Explore the competitive landscape of the real estate market. High demand and limited inventory often create a competitive environment for homebuyers. This intensification prompts existing homeowners to consider renovations as a strategic alternative to navigating the challenges of purchasing in a fiercely competitive market.
Interest Rate Fluctuations: Consider the impact of interest rate fluctuations on homeowner decisions. Periods of low-interest rates may incentivize homeowners to invest in renovations, leveraging favorable financing conditions to enhance their properties without the financial burden associated with a new mortgage.

Motivations Behind Home Renovations

Value Addition Perspective: Examine the motivation of homeowners, especially first-time buyers, in choosing renovations. Many see renovations as an opportunity to add substantial value to their initial property investment. This approach aligns with a long-term strategy of building equity and creating a personalized living space.
Avoiding Property Purchase Challenges: Acknowledge the challenges associated with property purchases in a competitive market. High prices, limited inventory, and bidding wars can be deterrents for potential homebuyers. Opting for renovations allows homeowners to circumvent these challenges while still achieving the desired upgrades or expansions.
Customization and Personalization: Recognize the desire for customization and personalization. Renovations offer homeowners the chance to tailor their living spaces to specific preferences, meeting lifestyle needs without the compromises that might come with purchasing an existing property.

Evolving Renovation Trends

Recent years have seen a shift in renovation trends. Homeowners are now focusing on creating more sustainable and energy-efficient living spaces. This includes the installation of solar panels, energy-efficient appliances, and the use of eco-friendly materials. The integration of smart home technology is also on the rise, as homeowners look to enhance convenience and modernize their living spaces.

Financial Aspects of Renovating

The financial commitment involved in home renovations is substantial. Homeowners need to be savvy about their spending, especially in a fluctuating economy. Financing options have become more diverse, with many seeking renovation loans or utilizing savings to fund their projects. The key is to balance the desire for aesthetic upgrades with practical, value-adding improvements.

The latest Archicentre Cost Guide sets out typical costs for popular home improvements. As a guide, you can expect to pay:

$75-$120 per square metre to polish timer floorboards
Up to $35 per square metre for interior painting
Up to $4,600 for an extension
Up to $48,000 for a new kitchen (excluding appliances)

While home improvements may not come cheap, quality renovations can boost your lifestyle and your home’s value. They can also be a money-saver – ‘green’ improvements such as installing rooftop solar panels can put money back in your pocket through lower utility bills.

The Rise of Eco-Friendly Renovations

Sustainability is no longer just a buzzword; it’s a key consideration for homeowners undertaking renovations. Eco-friendly renovations not only contribute to a healthier environment but can also offer long-term financial savings. Homeowners are increasingly aware of their environmental footprint and are making conscious choices to reduce it through their home improvement projects.

Technological Advancements in Home Improvement

Technology has revolutionized home renovations. From virtual consultations with designers to the use of augmented reality for visualizing changes, technological advancements have made the renovation process more accessible and efficient. Homeowners are embracing these technologies to ensure that their renovations are in line with the latest trends and conveniences.

Expert Insights on Home Renovation Trends

Industry experts emphasize the importance of thoughtful planning and market research before undertaking any renovation project. They advise homeowners to consider not only current trends but also the long-term impact of their renovations on property value and lifestyle.

Case Studies: Successful Home Renovation Stories

Real-life success stories of homeowners who have successfully navigated the renovation journey can provide valuable insights and inspiration. These stories highlight the challenges faced, solutions found, and the joy of transforming a space into something uniquely personal and functional.

The trend of homeowners investing heavily in home renovations is a testament to the changing dynamics of property ownership in Australia. As homeowners continue to adapt their living spaces to meet their evolving needs, the industry is set to see continued growth and innovation. Seeking guidance from professionals such as mortgage brokers and financial planning experts can further enhance your approach to property investment and renovations, ensuring alignment with long-term financial goals.

Why are Australian homeowners spending so much on renovations?

Homeowners are investing in renovations due to the rising property values and a competitive housing market. Renovations are seen as a way to add value to existing properties and enhance living spaces.

What types of renovations are most popular among homeowners?

Popular renovations include sustainable and energy-efficient upgrades like solar panels, smart home technology, and eco-friendly materials. Kitchens and bathrooms also remain high on the renovation list.

How are current housing market trends influencing homeowner decisions?

With the increasing cost of properties, many homeowners are choosing to renovate their existing homes instead of buying new ones, especially first homeowners looking to increase their property’s value.

How are eco-friendly renovations beneficial?

Eco-friendly renovations can reduce a home’s environmental impact and lead to long-term savings through reduced utility bills. They can also increase a property’s appeal and value.

Can renovations significantly increase a home’s market value?

Quality renovations can significantly increase a home’s market value, especially if they improve functionality, aesthetic appeal, or energy efficiency.

How can homeowners get started with their renovation projects?

Homeowners should start by defining their goals, setting a budget, exploring financing options, and consulting with professionals like architects, designers, and financial advisors to ensure a successful renovation project.

Get Started on Your Renovation

If a renovation is on your bucket list, call us to discover the options available to fund your project and the costs involved.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

Australian Homeownership Soars: Escaping Rental Struggles

Despite the soaring costs of living and successive interest rate hikes, homebuying intentions have climbed, as shown by the latest data. So why are so many people still chasing the great Australian dream? And what can you do to make your own dream a reality?

Despite a flurry of rate rises, new data shows home ownership is again a top priority for many Australians, with the number of house hunters increasing.

Commonwealth Bank’s Household Spending Intentions Index showed a strong 14.4% increase in homebuying intentions in May, after dropping in April. May also saw new home sales increase across Australia for the second month in a row.

So, what’s driving this appetite for property when finances are increasingly tight for many? And how can you boost your own chances of cracking the market sooner?

Rental Squeeze

Across capital cities and major regional areas, there have been historic rental price increases and low vacancies.

Rental vacancies reached an all-time low of 1.1% in April, with the median price for renting a unit only $39 a week cheaper than renting a house. Rising overseas migration has contributed to stiff competition in the rental space too. In the March quarter, there was a 124% jump in rental enquiries year from one overseas country alone.

Understandably, many are looking to escape renting and grab their spot on the property market. But with rate hikes and inflation, saving a deposit is no easy task for many Australians.

Here are some ways to take the pressure off.

Schemes and Grants to Save Time and Money

There are many government schemes and grants designed to help you get into the market, and all can be used simultaneously, which can really bring in savings!

Through the N ational Housing Finance and Investment Corporation, the federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers and single parents.

The First Home Guarantee and Regional First Home Guarantee support eligible buyers to purchase a home with a 5% deposit. And the Family Home Guarantee assists eligible single parents to buy with a 2% deposit.

By not paying LMI, you can save anywhere between $4,000 and $35,000, depending on the property price and your deposit amount, which can fast-track your first home-buying goal by four and five years.

Another home-buying cost that can have a real sting in its tail is stamp duty.

Fortunately for first-home buyers though, state governments have stamp duty concessions available, including South Australia, which announced that it was scraping the tax for first home-buyers on new homes valued up to $650,000.

Meanwhile, Victoria, New South Wales, Queensland, Western Australia, Tasmania, the ACT, and the Northern Territory also offer stamp duty concessions. If eligible, this can either eliminate or reduce the cost of stamp duty.

Most state governments also offer first homeowner grants to help you get the keys to your own home.

Victoria, New South Wales, Queensland, Western Australia, Tasmania, Northern Territory and South Australia all offer first homeowner grants. If eligible, you could receive a grant of between $10,000 and $30,000 depending on your state and other eligible criteria.

Why is homeownership soaring despite the rising costs of living?

Despite the increasing costs of living and interest rate hikes, the number of people looking to buy homes has risen. The article suggests that the desire to escape the struggles of renting and the availability of government schemes and grants are driving this trend.

What challenges are renters facing that make them consider buying a home?

Renters are experiencing historic rental price increases and low vacancies in capital cities and major regional areas. These challenges are pushing many to consider buying their own homes.

How can government schemes and grants help potential homebuyers?

Government schemes and grants can significantly help potential homebuyers by saving them time and money. For example, not paying LMI (Lender’s Mortgage Insurance) can save between $4,000 and $35,000, depending on the property price and deposit amount. This can fast-track the home-buying process by four to five years.

What is the role of stamp duty in the home-buying process?

Stamp duty is another cost that potential homebuyers need to consider. However, state governments offer stamp duty concessions for first-home buyers, which can make the process more affordable.

How can Zippy Financial help me in the home-buying process?

Zippy Financial can help you understand your borrowing power, loan options, and eligibility for various schemes and grants. They can guide you through the entire process, making it easier for you to buy your dream home.

Give Us a Call

It is important to note that spots for some of these schemes are limited. And they are popular, so it’s best to get in quick.

If you’d like to kick renting to the curb, get in touch with us today. We will help you work out your borrowing power, and your loan options, and factor in what schemes you may be eligible for.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

Mastering Mortgage Serviceability

Mortgage serviceability can feel like a frustrating hurdle to clear, but it is an important safeguard against borrowing too much, particularly in the current interest rate landscape.

It’s in the best interests of all parties involved if your mortgage is chugging along with regular repayments being made. Borrowing an amount, you cannot repay can mean heartache for you, and can land your lender and broker in hot water. Enter mortgage serviceability.

Before approving your loan application, your lender will take a good look at your finances to see if you can meet repayments.

What Is Mortgage Serviceability?

Lenders and brokers have a duty of care to ensure you are not provided with a loan that is beyond your means. In fact, the National Consumer Credit Protection Act (2009) is in place to ensure lenders and brokers are following responsible lending practices.

Whilst this protects consumers from landing in financial dire straits, it means that lenders and brokers are serious about checking serviceability, which can create some strict hoops for you to jump through.

How Is Serviceability Calculated?

Your serviceability is calculated by looking at your income and subtracting your expenses and debt repayments (including your new home loan repayment amount). We then work out what portion of your monthly income can go towards repayments. This is called the debt service ratio. It is also important to calculate your debt-to-income ratio, which is a measurement used to compare your total debt to your gross household income. Your credit card limit will also be considered, and you may need to prove that you have the means to pay off the limit within three years, even if the balance is $0. Finally, a serviceability buffer is applied to the current interest rate to see if you will be able to continue repayments should the interest rate rise.

In 2021, the Australian Prudential Regulation Authority (APRA) raised the serviceability buffer from 2.5% to 3% This buffer amount has been the topic of much discussion, with some arguing it’s making it tough for people to pass the assessment and refinance to a low-rate loan. But APRA is remaining firm at 3% given the current state of interest rates.

How to Increase Your Serviceability

Here are our top tips for increasing your serviceability score and improving your chances of home loan approval:

Pay down your debts to improve your debt-to-income ratio.

Reduce your expenses by cutting out non-essentials and looking for better deals on utilities.

Reduce your credit limits or cancel credit cards you are not using, if appropriate.

Increase your income by starting a side hustle, asking for a raise, landing a higher-paying job or even a second one (if possible).

Other ways you can increase your chances of home loan approval:

Improve your credit score. Lenders will delve into your credit history to see if you are good at making repayments.

Look at spending habits. Lavish overspending on non-essentials could raise a lender’s eyebrows.

Make savings. Showing that you can put away money on a regular basis will look good on your application.

What is the importance of creating a budget?

Mortgage serviceability is a measure used by lenders and brokers to ensure that you can afford the loan you are applying for. It is calculated by subtracting your expenses and debt repayments from your income.

How can shopping around for better deals help me save money?

Serviceability is calculated by looking at your income and subtracting your expenses and debt repayments. The remaining amount is then divided by your monthly income to get the debt service ratio.

What should I do if I have multiple debts like a car loan and a personal loan?

The debt service ratio is the portion of your monthly income that can go towards repayments.

How can streamlining my superannuation accounts benefit me?

The debt-to-income ratio is a measurement used to compare your total debt to your gross household income.

What should I do with the money I save?

The serviceability buffer is an additional percentage applied to the current interest rate to see if you can continue making repayments should the interest rate rise. In 2021, APRA raised the serviceability buffer from 2.5% to 3%.

How Can I Improve My Serviceability?

You can improve your serviceability by paying down debts, reducing expenses, and increasing income. Other ways include improving your credit score and showing that you can save money regularly.

How Much Can You Safely Borrow?

Buying a home is an exciting prospect, but you don’t want to stretch yourself beyond your means. This is especially important given the recent RBA interest rate hikes over the year.

We are here to help you crunch the number and find a loan that will work for you, not against you. If you would like to find out your borrowing power and what loan options are available, give us a call.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

The Decline of McMansions in Australia

Australians are increasingly “thinking small” when it comes to buying a home and cracking the property market. It comes with perks such as affordability, more desirable locations, and lower maintenance.

A recent ING study surveyed over 1000 Australians about their home preferences. Over a quarter (26%) said the cost of maintaining and running a larger home would see them gravitate to a smaller house. And 19% said they would consider a smaller outdoor area for ease of maintenance.

According to the 2020 CommSec Home Size Report, Australia has some of the biggest homes in the world. But it seems that there is a swing in the other direction.

A 2020 Australian Bureau of Statistics (ABS) report shows that Australian homes are being built on smaller blocks with a size decrease of 13% over the past 10 years in capital cities.

Why the Switch to Smaller Homes?

With the cost of living rising (as well as the cash rate), cracking the property market can feel like a slog. But revising your wish list to include a smaller and smarter home could make it easier.

On average, smaller homes, townhouses and units tend to be more affordable, and this can be a great option for those wanting to get into the housing market in a more attractive location.

A smaller dwelling delivers other perks too. ING’s study highlighted the growing preference of lower-maintenance homes to simplify lifestyles.

According to the ABS, Aussies spend around three hours a day on domestic activities. But a smaller space can reduce cleaning time. And with a smaller outdoor area, you can reclaim your weekend and say goodbye to all that garden work. Also, smaller homes can be more efficient when it comes to energy consumption.

A Smaller Home May Help Make You Eligible for Government Schemes

If you are a first-home buyer, the Home Guarantee Scheme could give you the extra boost you need to get into the market. Being eligible could shave, on average, five years off your home-buying process.

The First Home Guarantee and Regional First Home Guarantee offer loans with a low deposit of 5% with no lenders’ mortgage insurance (LMI). And the Family Home Guarantee offers eligible single parents loans with a deposit of just 2% and no LMI. However, the eligibility criteria include property price caps that are dependent on the state and geographical area you buy in.

Opting for a smaller, more affordable property could help you meet the eligibility criteria and speed up your home-buying journey. But be quick as places are limited… a fresh round of intakes is available from the 1st of July.

What is Mortgage Prison?

Australians are increasingly choosing smaller homes due to the high cost of maintaining and running larger houses.

How Do Credit Cards and Personal Loans Affect My Ability to Refinance?

Smaller homes are generally more energy-efficient and require less time for cleaning and maintenance.

What Can I Do If I’m Stuck in Mortgage Prison?

The First Home Guarantee and Regional First Home Guarantee offer loans with a low deposit of 5%, and the Family Home Guarantee offers loans with a deposit of just 2%.

How Can I Negotiate with My Current Lender?

The trend towards smaller homes is making housing more affordable and accessible, especially for first-time buyers.

What Other Savings Can I Ask For?

Smaller homes often come with smaller outdoor areas, which are easier to maintain.

Can a Mortgage Broker Help Me?

A fresh round of intakes for government schemes supporting smaller homes is available from the 1st of July.

Get the Ball Rolling

While you search for the perfect small home, we can get to work on the home loan hunt. If you are a first home buyer, we know all the ins and outs of applying for government schemes, like the Home Guarantee Scheme. Not all lenders participate, but we know who does and can give you some options to compare.

We are also clued in on other government schemes you may be eligible for to help stack up the savings.

If you’d like to find out more, get in touch today!

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

Are You Too Loyal for Your Own Good?

The average Australian homeowner is paying more than $37,000 in extra interest over the life of their home loan due to the loyalty tax, and it has got three-quarters of borrowers feeling ripped off and angry.

So, What is the Loyalty Tax?

It is the sneaky lender trick where borrowers with older mortgages are typically charged a higher interest rate than borrowers with new loans, and it was confirmed in a study by the Reserve Bank of Australia (RBA) in 2020. The banks don’t think you are paying attention, so they only offer their lowest rates going to new customers to win them over.

The RBA June 2021 figures show the average difference in home loan interest rates between new and existing owner-occupier borrowers was 0.46%. On an average loan size of about $400,00, that 0.46% difference on a 30-year-loan means a borrower would pay an additional $37,462 in interest over the life of the loan. That is $1,249 per year, per household.

Borrowers Are Feeling Ripped Off and Angry

It should be no surprise that 91% of borrowers want new and existing customers to receive the same rate, according to a survey of 1,000 homeowners undertaken by CoreData and commissioned by Athena. The vast majority of those surveyed say they also feel “ripped off” (82%), “angry” (74%) and “outraged” (72%) at this pricing practice.

You Don’t Need to Feel Trapped

The ACCC published a report in December 2020 where there were several recommendations that would prevent this unfair practice, but nothing much has come out of it since. More than half (56%) of those surveyed say they feel trapped in their current deal, while one-in-three people (36%) asked their lender for a drop in their interest rate but were rejected.

Competition amongst lenders is quite fierce right now – so… the power is in your hands!

Rates are at an all-time low, so it is a crucial time when Australians need the money in their pockets, not the banks. Well-informed borrowers can negotiate a larger discount on their existing lender, without the need to refinance their loan.

What is the Loyalty Tax in the context of home loans?

The Loyalty Tax is a practice where borrowers with older mortgages are typically charged a higher interest rate than borrowers with new loans. This was confirmed in a study by the Reserve Bank of Australia (RBA) in 2020.

How much extra interest could a homeowner pay due to the Loyalty Tax?

According to RBA’s June 2021 figures, the average difference in home loan interest rates between new and existing borrowers was 0.46%. On an average loan size of about $400,000, this difference would mean an additional $37,462 in interest over the life of a 30-year loan.

How do borrowers feel about the Loyalty Tax?

A survey of 1,000 homeowners found that 91% want new and existing customers to receive the same rate. The majority of those surveyed also feel “ripped off” (82%), “angry” (74%), and “outraged” (72%) at this pricing practice.

Can I negotiate a better rate with my current lender?

Yes, competition among lenders is currently fierce, and well-informed borrowers can negotiate a larger discount with their existing lender without the need to refinance.

What can Zippy Financial do to help me avoid the Loyalty Tax?

Zippy Financial can help you negotiate with your current lender or find another lender who will offer you a better rate. They specialize in home loans, property investment, and commercial lending.

Has any action been taken to prevent the Loyalty Tax?

The ACCC published a report in December 2020 with recommendations to prevent this unfair practice, but not much has been implemented since then.

Talk to Us

We always have your back. If you have not refinanced recently, get in touch today and we will work with you to help save you thousands of dollars in interest repayments. This may involve negotiating with your current lender or looking around for another lender who will give you a better rate.

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

SERVICE LOCATIONS

Are You Having Trouble Managing Multiple Debts?

By consolidating your debt, you can take some pressure off your monthly finances.

Here is a quick experiment…

Go pick up three balls and try and juggle them. Most people, besides those who ran away to join a circus, will likely drop at least one of them within a few tosses. Now put two of the balls aside and throw the remaining up and down with one or both hands… that is much easier to manage, right?

Well, this is not too dissimilar to the concept of debt consolidation. If you have more than one loan – for example, a credit card, a car loan and/or a personal loan – you can reduce the stress of juggling multiple debts, payment dates and interest rates by rolling them into one easy-to-manage loan.

There are Other Benefits Too

One common debt consolidation method is to take out a new personal loan and use the funds to pay off your other existing debts.

If the interest rate on the new personal loan is lower than the interest rate on your existing debts (for example, a credit card with a 17.99% interest rate) this can help your pay less interest each month and avoid the nasty late payment fees that come with these kinds of cards.

By rolling all your debts into one, you can get a clearer timeline of when you can be debt-free.

Debt consolidation can also make it easier for you to manage your household budget, as you only need to factor in repayments from one debt per month instead of many.

Refinancing your Home Loan for Debt Consolidation

Another method used for debt consolidation is rolling it into a refinanced home loan because mortgages offer comparatively low interest rates.

If you are struggling with multiple debts right now, consolidating your debts into your home loan will, in most cases, reduce your overall monthly repayments.

But there is a big word of warning…

Whilst this option can reduce your monthly repayments now, debt consolidation through your mortgage can turn a short-term debt (such as a personal loan) into much longer-term debt.

So, unless you aim to make a lot of extra repayments as soon as possible, you could end up paying significantly more interest than you would have otherwise. One way to address this issue is to create a loan split for the debt consolidation, giving you the ability to pay off all the short-term debts within a few years rather than for example over a 25-year home loan period.

If you would like to explore your debt consolidation or refinancing options, then get in touch with Zippy Financial today, and we can help you look at ways to take off some financial pressure.

Whatever your circumstances, we are here to support you however we can!

What is Debt Consolidation?

Debt consolidation is the process of combining multiple debts into a single loan, making it easier to manage repayments and potentially saving you money on interest rates.

How Can Debt Consolidation Help Me?

By consolidating your debts into a single loan with a lower interest rate, you can reduce your monthly payments and avoid late fees associated with high-interest debts like credit cards.

What are the Benefits of Using a Personal Loan for Debt Consolidation?

Using a personal loan for debt consolidation can provide you with a clearer timeline for becoming debt-free. It can also simplify your household budget, as you’ll only need to make one payment per month.

Can I Use My Home Loan for Debt Consolidation?

Yes, you can refinance your home loan to include your other debts. This is often advantageous because home loans typically have lower interest rates.

What are the Risks of Using a Home Loan for Debt Consolidation?

While using a home loan can reduce your monthly payments, it can turn short-term debts into long-term debts. This means you could end up paying more interest over time unless you make extra repayments.

How Can Zippy Financial Help Me with Debt Consolidation?

Zippy Financial offers tailored financial solutions to help you consolidate your debt and achieve financial peace of mind.

Get in Touch

Get in touch with Zippy Financial today for tailored financial solutions. Consolidate your debt and simplify your finances. Say goodbye to juggling multiple debts and hello to financial peace of mind. Contact us now!

Phone: 1300 855 022

Email: clientservices@zippyfinancial.com.au

About the Author:

Connect with Louisa on Linkedin.

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

First Time Buyers: Your Time is Now

Current Market Analysis for First-Time Buyers

Financial Considerations for First-Time Buyers

Benefits and Challenges of Buying Now

Government Schemes and Incentives

Exploring First-Time Homebuyer Schemes and Incentives

Regional and National Programs for Homebuyers

Long-Term Investment Perspective

Seeking Professional Advice

Preparing for Homeownership

Frequently Asked Questions

Is now a good time for first time buyers to enter the property market?

What financial considerations should first time buyers keep in mind?

What are the benefits of buying a home in the current market for first time buyers?

What challenges might first time buyers face in the current market?

How important is seeking professional advice for first time buyers?

What should first time buyers consider when choosing a property?

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SERVICE LOCATIONS

Controlling the Cash Flow

Five Easy Stages to Managing Your Cash Flow

1. Start Your Plan

2. Look Ahead

3. Bank Clever

4. Direct Debits

5. Put it on the House

Frequently Asked Questions

What is Cash-Flow Control?

How can I start managing my cash flow?

What are the benefits of managing my cash flow?

How can I organize my bank accounts for better cash flow management?

What is the role of direct debits in cash flow management?

Can I consolidate my personal loans onto my home loan?

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Service Locations

The Definitive, Proven, Best Time to Buy Property in Australia

Is Christmas a Prime Time for Property Shopping?

Supply Dries Up

Other Shoppers get Fatigued

People Prepare for Big Life Changes

Decisive Action Pays Off

Frequently Asked Questions

Is there a specific best time to buy property in Australia?

Is Christmas a good time for property shopping?

What factors influence the decision to buy a property?

How can I know if I am ready to buy a property?

What happens to the property market in December?

How can I get an edge in the property market?

RELATED ARTICLES

SERVICE LOCATIONS

When Can We Expect Fixed Rates to Drop?

But Aren’t Interest Rates Expected to Fall?

So, Why Are Fixed Rates Rising Then?

What Should You Do?

Frequently Asked Questions

Why have fixed rates been fluctuating recently?

Are interest rates expected to fall in the future?

Why are some lenders increasing their fixed rates?

What are the banks’ predictions for the cash rate?

How did the recent news about inflation affect interest rates?

What should homeowners do amid these rate fluctuations?

Your Next Step

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SERVICE LOCATIONS

Where Homeowners Are Spending $1 Billion a Month

The Current Housing Market and Homeowner Trends

Market Dynamics Impacting Homeowner Trends

Motivations Behind Home Renovations

Evolving Renovation Trends

Financial Aspects of Renovating

The Rise of Eco-Friendly Renovations

Technological Advancements in Home Improvement

Expert Insights on Home Renovation Trends

Case Studies: Successful Home Renovation Stories

Frequently Asked Questions

Why are Australian homeowners spending so much on renovations?

What types of renovations are most popular among homeowners?

How are current housing market trends influencing homeowner decisions?

How are eco-friendly renovations beneficial?

Can renovations significantly increase a home’s market value?