With record low interest rates, a flattening housing market and repeated assertions from RBA governor Philip Lowe that a rates rise is not on the horizon, this may be the right time for first home buyers to strike. 

Following the September Reserve Bank (RBA) meeting, interest rates remain at 0.25% for September. As recently as July, RBA governor Philip Lowe reasserted that “there has been no change to the board’s view that negative interest rates in Australia are extraordinarily unlikely.”

First home buyers looking at those low interest rates as well as government stimulus incentives, and a property market whose rise has been curtailed by COVID-19, may well be thinking the time is right to enter the market. Of course, making the call on home ownership should be based on personal financial circumstances as well as market ones. Here’s what to understand about the current environment if you’re deciding whether to take the leap into the housing market.

The big picture

Right now interest rates are at a record low, and the RBA has made repeated assertions that a negative rate is off the table. It now means that for many looking to buy their first home, paying off your mortgage may look more attractive than paying rent.

House prices have decreased 2% from mid-April nationally according to the Domain House Price Report. However, experts say measures such as bank mortgage deferrals and borrowers using government stimulus, such as JobKeeper and JobSeeker, could be keeping that figure lower than expected.

Such government stimulus initiatives are scheduled to be wound back but the ongoing COVID pandemic and the length of financial recovery may put further financial pressure on those whose employment is affected.

Clearance rates are also lower in Sydney and Melbourne. They have fallen from 77% in February to 63% and 61% in those capital cities respectively – which might be an indication of buyers exiting the market.

“The low rate, low competition environment and government incentives might make for a very tempting market, but that’s only one side of the story.”

The downturn and potential for further drops points to a buyer’s market. But there’s more to a decision to buy than just house prices.

Take advantage of stimulus

The current property landscape is unique because of the many incentives designed to stimulate the economy, especially those targeted at first home buyers. Some were designed to address the impact of COVID-19, but others were introduced before the pandemic.

Across the country a range of first home buyer stamp duty concessions that existed before COVID-19 are still in place, and being expanded. In NSW, the state government recently announced a pause on stamp duty on new homes under $800,000 for first home buyers – $150,000 more than the previous threshold. Every state has different stamp duty concessions, some for building new homes, others for off-the-plan or existing homes.

There are also federal government schemes that target first home owners. The HomeBuilder program provides eligible owner-occupiers – including first home buyers – with a grant of $25,000 to build a new home or renovate an existing home this year.

Another federal scheme, the First Home Loan Deposit Scheme, lowers the amount needed for first home buyers to enter the market. Under the scheme, first home buyers may be eligible for a loan with a 5 per cent deposit. The government then lends the remaining 15 per cent, removing the need for lender’s mortgage insurance. The 2020-21 financial year allocation of 10,000 has just been filled, however you can be placed on a waiting list for a spot.

There is also the option to withdraw money from your super to go towards your deposit,  under the federal government’s first home super saver scheme provided you are over 18 and have never owned property in Australia.

Is it a (first home) buyer’s market?

The market commentary suggests the COVID-19 economic downturn has led to less investment buyers squeezing out first home buyers. Before the onset of COVID-19, first home buyers represented 19 per cent of owner-occupiers. That’s the highest that proportion has been since the start of 2012. More recently, the data shows that while loans to investors fell 0.3 per cent in May, loans to owner-occupiers – around a third of which are first home buyers – are growing, by 0.5 per cent.

We’re also entering the Spring season, which traditionally sees strong demand. Over the past 30 years, over a quarter have sold in September, October and November. 

The other side of the coin

The low rate, low competition environment and government incentives might make for a very tempting market, but that’s only looking at one side of the first home buyer story. The low interest rates and government stimulus schemes are a reaction to the increased levels of unemployment, with the current rate at 7.4 per cent, according to the ABS. That’s just shy of one million Australians out of work, and the worst rate since October 2001.

Buying a house is an expensive and long term commitment, and the losses in wages can easily offset reductions in house prices. Finder’s recent RBA Cash Rate Survey found that only 35% of experts said in July that now is the time to buy, recommending caution as the market is yet to settle.

If you’re looking to enter the property market, and have the cash on hand, now might be the right time to make your move. The first step is talking to a broker who can advise you on what’s possible.

Come July 1 the annual tax window opens again. Property investors may have access to a wide range of tax benefits, but tax is a complicated matter. It pays to be across the details. Here’s how you could maximise your return, and what to watch out for.

Over two million Australians own at least one investment property. And that has implications for their income and tax. When it’s time for them to lodge their tax returns, they must declare any income made from those properties – both rental and non rental.

However, many types of expenses from investment properties can be considered as deductions. From reducing your tax bill to negative gearing, it pays to know how the tax regulations could help you.

Deductions

There are many property-related deductions that can reduce your taxable income. The interest on a mortgage for an investment is tax deductible. So too is mortgage insurance, which is claimable over the term of the loan, or for five years (whichever is shorter).

Investment expenses can be claimed if they are used on parts of the house that are treated as an investment property – and these include:

Fees: Real estate agent fees, secretarial and bookkeeping fees, bank charges on the account used to receive rent and pay expenses, council rates and land tax, building, contents or public liability insurance, credit checks, strata title and owners’ corporation fees, and water supply charges, if the onus is on the landlord to pay for water.

Services: Advertising for tenants, fees for safeguarding title documents, taxation advice, legal expenses to eject a defaulting tenant, depreciation surveys, security patrols and security system monitoring and maintenance, and debt collection for rent arrears.

Property Costs: Repairs to the property, gardening and lawn mowing, pest control, key cutting, servicing hot water heaters, smoke alarms, air conditioning systems and garage door mechanisms, and cleaning at the end of a tenancy, including rubbish removal.

Remember, you can only claim deductions on the property during periods in which it was tenanted or available for rent. You also need to keep records to prove these expenses.

“If expenses related to your investment property exceed the income it brings, then the loss can be deducted from your taxable income including salary and wages.”

Depreciation

As your investment property suffers wear and tear, its value decreases. This depreciation is also tax deductible, at a rate of 2.5% for each year until the property is 40 years old. This is a “non-cash” deduction. It’s distinct from, say, fees, where you are paying out of your pocket and deducting it later. Fittings like lights, fans, sinks, and showers can also depreciate. Qualified building surveyors can advise how much the value of these assets will decrease over time.

Capital Gains Tax

Income from the sale of a property – a capital gain – may attract capital gains tax. The taxable amount is the total sale price less the original purchase price, and any expenses. Expenses include stamp duty, broker fees, loan application fees, legal expenses, auctioneer’s fees and capital improvement outlay. Again, keep a detailed record of those.

In addition, if you bought the property over a year before you sold it, you will only pay 50% of the CGT. Your primary residence is exempt, but you can vacate your primary residence and rent it out in your absence – say, during a temporary overseas posting – for up to six years and the exemption will still apply.

Negative gearing

If expenses related to your investment property exceed the income it brings, then the loss can be deducted from your taxable income including salary and wages. This is known as ‘negative gearing’ – and it can apply to any type of investment, not just housing.

What to watch out for

Firstly, in order to claim investment property tax deductions, the property must be a rental. It needs to be tenanted or genuinely made available for rent. It should be liveable, appropriately priced and actively listed. Holiday homes that sit empty for months in between family trips or dilapidated buildings won’t satisfy this test. Keeping records or screenshots of rental website listings can help you establish this.

If you own a property jointly with someone else, or with a group of people, then you must share the rental income and deductions proportionally. For example, a couple owning a house together in equal shares would each claim 50% of the rental income and 50% of the deductions. The owner with the higher taxable income cannot claim more of the share.

Each year at tax time, the ATO announces specific areas it will be investigating. It has been suggested that excessive expense claims and holiday homes could be two of the areas focused on this year. 

As with all matters of financial planning, it’s worth talking to an expert about how the tax system can work for you.

Australia’s cash rate is now the lowest it has been in 23 years, a reaction initially to stunted economic growth and now to the impact of COVID-19 on the local and global economic landscape. As the uncharted negative interest rate zone looms, is it worth fixing your rate? Here’s what to weigh up when making your decision.

The RBA has stood by its promise to keep the current rate of 0.25%, which still represents a historic low. RBA governor Philip Lowe has said that it’s highly unlikely that Australia will adopt negative interest rates, and would not lift the rate unless progress is being made towards full employment. Given it took more than a decade to get to full employment after the early 1990s recession, this could be the cash rate for some time.

There was a time when fixed rates were higher, as they were more stable, and variable rates were seen as riskier and were priced lower. Only 15% of Australian mortgages are fixed. Currently, the lowest fixed owner-occupier rate offered by bank and non-bank lenders is 2.09%, compared to the lowest variable rate at 2.39%. 

“In these uncertain times, the reassurance of a fixed rate might be preferable. Certainty on your interest rate means you can budget accordingly – and you can remove potential interest rate hikes from your list of anxieties.”

In March, amid the rapidly escalating COVID-19 pandemic, the RBA made an emergency cash rate cut to 0.25%, which most banks have passed on to fixed rate loans – but not variable loans. If you’re considering whether to fix your mortgage rate, here are some things to take into account.

To fix…

Given these are the lowest rates in history, and negative interest rates have been all but ruled out, the RBA is unlikely to provide any more relief to homeowners – concentrating instead on monetary policy like quantitative easing. Many banks passed on the early-March rate cut, but fewer did so in mid-March – and as discussed above, it was for fixed rate mortgages only. 

In these uncertain times, the reassurance of a fixed rate might be preferable. Certainty on your interest rate means you can budget accordingly – and you can remove potential interest rate hikes from your list of anxieties.

… or not to fix

While fixed rates may be more predictable when it comes to making a budget – and most likely lower – they do come with some significant drawbacks.

Variable rates are more flexible. They tend not to come with break costs, which are incurred if you want to exit your fixed loan during the fixed period. If future rate cuts were to occur, you’d be unable to take advantage of them. If your circumstances change, you might not be able to change your investment plans or move lenders.

In addition, there might be limitations to how you can pay back the loan. Additional repayments might be capped, so you can’t make bulk or lump sum payments. And Redraw facilities might not be available. 

Fixed loans also tend not to offer the option of an offset account, which allows the borrower to use their savings to pay more of the principal amount off their loan. If building up savings or having cash on hand is important while you pay off your mortgage, perhaps you’d rather a variable mortgage with an offset.

In times when work isn’t guaranteed, you might want to stay flexible with your mortgage, in case your financial situation is impacted. The extra flexibility afforded by a variable loan might be more important to you than a lower rate.

A little of both

Many lenders offer the option to split your home loan into two separate loans, one fixed and one variable. One caveat is that having two loans may mean you end up paying more in fees. You can also tailor the length of the fixed period – most commonly between one and five years, although 10 and 15-year options exist. 

Ultimately, it’s always most important to make decisions based on your circumstances, not just the conditions of the market. For more information on which loan is right for you, contact us for a chat.

If you are concerned about servicing your loan, reach out to your local mortgage broker for help.

As Australians everywhere take a close look at their financial circumstances, mortgage brokers stand ready to lend a helping hand.

Whether experiencing financial hardship through job loss, a reduction in work hours, or business disruption, an increasing number of Australians may be struggling to balance their books as a result of the Coronavirus, and in many cases are wondering how they will continue to pay the bills.

Difficulty with repayments
According to research conducted by Finder in early 2020, about one in five mortgage borrowers, or about two million Australian households, were struggling to make repayments, despite record low interest rates.

And with the challenging circumstances that have emerged since, it is anticipated that these pressures will only increase forcing more people to require financial assistance.

Financial relief strategies
In this difficult time lenders have responded by announcing financial relief strategies. In an official Australian Banking Association (ABA) statement, CEO Anna Bligh said, “Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible”.

Different lenders have different assistance options. These may include, waiving fees on early term deposit withdrawals, interest rate freezes on loans, options to defer or restructure home loan repayments, and emergency credit card limit increases.

It is important to remember that mortgage brokers have the knowledge, experience and relationships necessary to assist people experiencing or expecting to have trouble paying their home loans as a result of changing circumstances.

In times like these, the importance of mortgage brokers in assisting customers with hardship and facilitating access to credit cannot be overstated. For many Australians – particularly those in rural or regional areas – brokers may represent the only source of assistance. 

“Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible”.
Anna Bligh, ABA 2020

Brokers’ expertise in helping customers navigate the complex home lending market – and their intimate understanding of their customers’ personal circumstances - means they are uniquely positioned to provide critical support for customers when discussing hardship and available options with lenders.

If you have any questions or concerns about your existing loans, need further guidance on hardship assistance, or have other questions about your loan arrangements, book a chat online or on the phone by clicking here

Dale Wilkinson
The Finance Architect

Everyone wants to pay less on their mortgage, and refinancing is one strategy to help lower your interest rates – but is it worth it? We look at how you can get the most out of refinancing.


Why refinance?

Generally, people refinance to negotiate a better deal on their home loan and pay it off sooner.
 
Depending on your situation, you should be able to save money by taking advantage of lower interest rates, or new products that weren’t available when you first negotiated your home loan.

To help put it in perspective, let’s say you previously took out a $300,000 loan at 7.5% over 30 years with monthly repayments of $2,098. If you refinanced to a new loan at 4%, you could save $239,543 ($665 per month) over the life of the loan by making the minimum repayments of $1,432 per month. 
Once you’ve refinanced, if you continued making the same minimum repayments as your previous loan ($2,098 per month), you’ll potentially save $346,912 and pay off your mortgage 165 months early.

Make it work for you

Take advantage of your refinanced loan by: 

• Consolidating debts: Home loan interest rates are often lower than those for other forms of credit, so you can save money by consolidating debts such as credit cards or personal loans into your mortgage. Beware, however: paying off a short-term loan over a longer period will likely incur extra interest and fees over the longer term. Put the money saved from consolidating your debts into your mortgage, as if you were still repaying the other debts, to reduce the overall debt faster.
  
  
• ‘Splitting’ your loan: Nominate a portion to be charged at a fixed rate of interest for a set period of time, with the balance charged at a variable interest rate. When the fixed rate period ends, the loan reverts to the variable interest rate. You benefit from the security of the fixed rate and flexibility of a variable rate loan, and are impacted less if interest rates rise.
  
  
• Having an offset account: The balance of your offset account is subtracted from the remaining principal amount before interest is applied, meaning you spend less on interest over the course of your loan.
  
  
• ​Making extra repayments: Any payments made on top of your regular repayment will save money by reducing the amount of interest you’ll pay.

When should you consider refinancing? 
​
Life brings change and your mortgage needs to keep up: maybe you now have a partner, a young family, a new job that pays more, or have become empty nesters with extra cash on your hands. If the terms of your current loan don’t allow you to pay more (or less) on your principal amount, it could be worth considering refinancing into a more flexible arrangement.

Refinancing or loan switching can save money, but you might incur costs such as exit and establishment fees, government charges and administrative or legal expenses. These costs need to be weighed against the benefits to determine if you’ll save in the long run.

Today’s home loan market is very competitive, and there might be a loan out there offering the features and flexibility you want. Before you make any decisions, however, be clear on your reasons for refinancing. It’s also a good idea to speak to an experienced mortgage broker or financial expert to ensure you’re making the right move for your financial situation.

Looking to enter the property market and worried about how you’re going to secure your first home loan? It’s time to start making your money work for you so you can land that loan.

Qualifying for a home loan isn’t always an easy path. Aggressive interest rates, competition in the market and less than rigorous saving habits can often push people out of the property game completely – but it shouldn’t.

Saving enough money for a sufficient deposit is possible with the right guidance and plenty of diligence.

Budget, budget, budget! 

It goes without saying that creating an airtight budget – and sticking to it – is key when you’re looking to save money for a home loan.

If you’ve done your homework or met with a mortgage broker, you’ll know that the minimum deposit you’ll need is likely to be a minimum of twenty per cent of the total cost of your home.

Saving for the deposit is an important step but you should factor in other upfront costs that come with buying a property. Stamp duty, conveyancing, title search and registration fees, building inspections and insurance are all associated costs that will need to be covered. With the mean house price in Australia sitting over $600,000 you might have to save over $100,000 to cover the deposit and costs.


As daunting as it may seem, saving to buy a home is possible if you budget. Filtering a percentage of your salary into a high-interest savings account can be a smart first step and can grow into a sizeable amount more quickly than you think. But whatever you do, avoid dipping into that savings account at all costs.
Assess your debt

Along with mastering a budget, paying off your debts is a practical step towards building that deposit. Whether it’s a credit card, a car loan or student loan, getting rid of any debt hanging over your head not only saves you money in the long run, it will help make your financial standing more appealing to a mortgage broker and lender.

However, it’s important to remember that eliminating debt is not a quick fix – it takes time and patience, and even a few years to complete.

Luxuries be gone

‘Work hard now, have fun later’ will become your new mantra when securing a home loan. Being able to save enough money for a deposit means cutting down on life’s unnecessary luxuries. Saying goodbye to dining out, takeaway coffee, $10 sandwiches for lunch and cable TV for the next few years can save you hundreds and even thousands of dollars.

If you’ve been living under the guise of having a high disposable income, the time to curb your spending is now. Living within your means is about questioning your wants and needs: Do you really need that pricey leather couch, or would you prefer to have a house to put it in first?

Lenders Mortgage Insurance

Saving for a deposit can be a huge undertaking, especially as the median house price continues to increase. With Lenders Mortgage Insurance (LMI), borrowers are able to purchase a property with a smaller deposit. You may be able to get a loan with a deposit as little as 5% of the property’s purchase price. There is a premium fee associated with LMI, but it can be paid upfront or over the term of the loan. It’s a good idea to speak to your broker if you are considering LMI.
Saving money for a home loan deposit is one of the biggest and best decisions you’ll make and will certainly pay off in the long run. Making financial sacrifices now will reap very pleasing rewards and potentially set you up for life.  

Contact me today about your home loan options on 0411 600 210

Seller expectations are high but buyers want low prices – what’s to be done? Two real estate agents detail how to negotiate in a declining market.

After years of rapidly rising house prices, the recent slowdown took many people by surprise – not least those with a home to sell.

“For a while we had a situation where buyers were aware the market was dropping while sellers still assumed it was strong, so there was a big gap between their expectations,” says Anton Zhouk, Director of the Buxton Real Estate Group at Boroondara in Melbourne’s eastern suburbs.

“Now people have had time to adjust so, when it comes to negotiation, the gap isn’t quite so wide.”

Whatever the state of the market, every negotiation is based on the same premise – vendors want to receive the highest possible price while buyers want to pay as little as possible. Both, however, need to give careful thought to how they approach a negotiation when the market is in decline.

Be realistic

“From a vendor’s point of view, it’s crucial that you price your property correctly from the start,” Zhouk says. “The most incredible homes in the world won’t sell if they’re overpriced.”

Jane Booty, Principal of Stone Hills District Real Estate in Sydney, agrees that vendors must be realistic.
“Some potential buyers are waiting for prices to fall even further so there fewer actively looking,” she says. “They have more properties to choose from so it’s harder to convince them to pay a premium price. And the longer a property stays on the market, the less likely it is to sell at a higher price – buyers can look up how long it’s been for sale and will use that against you.”

She suggests that vendors try not to think in terms of losing money.

“Unless you bought in the last two years or so, you’re probably going to get a higher price than you paid,” she says. “And, of course, if you’re selling to buy, you’ll be paying less yourself. It can be more helpful to think in terms of the changeover price, rather than fixate on the price you may have been able to achieve a few months ago.”

Take offers seriously

If a property is on the market now, it’s there for a reason.

“This isn’t a time to be testing the market or selling a property if you’re not in a hurry,” Booty says. “If you do need to sell you should be prepared to take every offer seriously, even if it’s not at the level you were hoping for. At least enter into negotiations to see how far you can get your potential buyer to go.”
When buyers have the upper hand, presentation is particularly important.

“You need to be clear about the attributes of your home – the unique selling points that make it desirable,” Booty says. “It’s also worth spending some time and money on minimising anything that would cause concern. You don’t want potential buyers to go away with the impression that there are another five homes they’d be equally happy with.”

A good agent can help you identify your property’s strengths and weaknesses then demonstrate and sell its strengths.

“In a softer market, it’s vital that you start by getting good advice on everything from pricing to presentation,” Zhouk says. “The right agent will also help you market the property effectively. This needs to be considered on a case by case basis – for example, advertising in print media may work well for some but, for others, it would be a waste of money.”

Be ready to act

As a buyer today, you’re well placed – but you shouldn’t be too complacent.

“If you see a property that appeals to you, it’s also likely to appeal to other people so you can’t afford to sit back and wait in the hope that the price will fall,” Booty says. “At least throw your cap into the ring and start the negotiation process.”

Zhouk believes that today’s buyers are in a fortunate position now that the market has settled – though no one knows for how long.

“The only way you can tell when the market’s hit the bottom is when it starts to come back up,” he says. “By then, you could be too late.”

Some tips to help get the best results from your negotiation
If you’re selling

Set a realistic price from the outset

Find a real estate agent you trust and act on their advice

Take extra care with presentation – you want potential buyers to fall in love with your property

If you’re buying

Do your research – be clear about a realistic market price

Let the agent know if you’re interested in a property
​
Don’t wait too long for a bargain – the market could turn at any time

Is buying to flip still viable in today’s market?


With the property boom of recent years and the popularity of TV renovation shows like The Block and House Rules, increasing numbers of Australians have been ‘buying to flip’ – buying a property, renovating it and selling it at a profit.

Buying to flip can be lucrative when property prices are rising rapidly, but is it still a viable option in today’s softer market? The answer is it can be. You will, however, need to:
​
• do your own research and due diligence

• be in a strong financial position

• consult a mortgage broker for the best finance arrangements.

What should potential ‘flipper’ be aware of?
Buying ‘the right’ property

What’s the right property for you to flip? The answer to that may come from research into the local area to work out exactly where good value may lie. Ask yourself questions like:
• What are the historical values for this property and others on this street?

• How much can you spend before overcapitalising?

• Is the property attractive to the demographic of the area?

• Is the property structurally sound?

• How long are properties sitting on the market for?

• What is the area the property is in zoned for – one-level residential only or multi-level dwellings?
You’ll also want to find out whether there is anything planned that could stimulate future demand. Are there any new developments – such as investments in infrastructure, or schools or shopping centres under construction – that could attract new people to the area and drive up property prices?

The costs involved in buying and selling

Property is typically not a short-term investment – it’s time-consuming and expensive to buy and sell. When buying a property to flip, the following costs need to be covered:
When buying

• Loan establishment fees

• Building and pest inspection reports

• Legal fees

• Stamp duty
While renovating

• Labour and materials

• Mortgage repayments

• Rates for holding period

• Accommodation costs (if you have to move out for a period)

• Storage costs (for any furniture)
When selling

• Marketing costs

• Real estate agent fees

• Legal fees

• Loan exit fees

• Mortgage repayments and rates
Therefore, it makes sense to be in a strong financial position and be confident you can add value quickly and easily.

What are the potential risks in buying to flip?
Timing the market

Property is typically a long-term investment. So, if you’re looking to make money on it in the short term, you’ll usually need to add value to the asset and benefit from a rapidly rising property market.

In reality, the market can cool quickly if changes to lending policies or higher interest rates come into play. These factors can be hard to predict. If you need to make a sale and your property sits on the market longer than expected, its perceived value can erode with each passing day.

​Costs blowing out

Clearly you want your renovation completed as quickly and efficiently as possible, but sometimes there can be costly and time-consuming surprises to address. One way to limit this is by getting a comprehensive pest and building inspection. Unfortunately, you usually won’t add value through remedial work; buyers will pay a premium for lifestyle and aspiration – less so for a new roof!

Some things to consider

The work that needs to be done

Flippers need to consider whether simple cosmetic improvements and good styling will be enough to entice buyers. Will a paint job, new flooring, stylish lighting, a kitchen and bathroom refresh, and some garden work be enough to showcase the property and its lifestyle potential?

Financial and tax implications

As with any project, funding is what will keep it afloat. How will you cover all the costs you incur? Will you be financially stretched to achieve your goals for the property? And can you afford to hold onto it if you can’t sell it for what you’d like?
Another consideration is Capital Gains Tax (CGT). Given this will be payable on any profit you make, it may make sense to consider strategies to minimise the amount payable. These could include holding the property for at least one year to access a 50 per cent CGT discount, or selling in a low-income financial year. For more information on this, you may want to seek independent tax advice from an appropriately-qualified professional.

​Advice from experts

Getting quotes from tradespeople to fully cost out the work is key to planning a renovation and running a project to budget. It may also be more efficient to get professionals to carry out the work, rather than trying to be the expert in all areas.

Likewise, it makes good sense to consult a mortgage broker experienced in financing buy-to-flip acquisitions. This will help you get the right loan for your needs – such as one that offers a honeymoon period of lower repayments at the start of the loan. Getting the right loan in place can help set you up for success!

Over the last half a decade, I have been working with people to obtain finance to purchase property. As you’d imagine, I’ve come across people from all walks of life; the corporates, the mum and dads, the first home buyers, the debt riddled and probably a cross section of the beforementioned, those that despite what they earn, still haven’t found a way to effectively manage their money.

The feeling of being in control of your money is such a re-assuring one, yet why is it that so many don’t have the control? My belief is that put simply, no-one has bothered to spend the time to put together a system to make it happen.

Now it’s one thing to have a system for managing money, but if you don’t have a purpose, my guess is that it won’t work. It’s got to mean something to you, or to your family or to a partner which means doing that dreaded thing – goal setting.

Personally, I love goal setting because it makes me feel in control. It gives me a sense of direction and a purpose. Setting goals for your money is no different. Do you want to take a trip of a lifetime and visit Europe or America? Have you bought into the property market and now want to turn your house into your home? Is there a car on the market that you’d just love to get your hands behind the wheel of? Do you want to send your children to good schools and are daunted by how on earth you’re going to afford it?

All of these are example of goals and like all goals, there are usually short, medium and long term goals.
Once you have established what’s important to you, it’s then over to you to make it happen. The trouble is that it just never happens. Unlike a failed relationship however the cliché “It’s not you is me” is actually only half right.

I’m a big believer that you should be in control of your own money so in a way it has been your fault that you haven’t put away the pennies to achieve your savings targets but the other side of the equation is a bit like asking someone to mow your lawns without a lawn mower. It’s very difficult.

To manage money effectively, you need a tool to use and a system to implement. Imagine a world where you were able to take ownership of your money but utilise a system to make your money work for you.

Welcome to Finance Fit. Finance Fit is a structured, system-based program designed to educate you on managing your money and keep you accountable to achieve your goals. Whether it’s buying your dream home or investment, marrying the love of your life, or taking a well-earned holiday, Finance Fit will guide, educate and monitor your progress to make sure you tick off the challenges you face with managing your money.

Unlike other companies out there that claim to solve your monetary woes by paying bills on your behalf, Finance Fit, educates you and keeps you accountable for managing your own money. We’ll teach you the skills required to successfully achieve your financial targets within a manageable time-frame.

For more information, please click the following link: Finance Fit

1. Work out how much you’re spending
Create a spreadsheet and track your expenses for a month – record everything so you can see where your money is going. You may be spending much more than you think on some things – more than you can really afford.
2. Decide where you can cut back
With a clear idea of how much you spend each month, you can figure out how much you really need to spend, and where you can cut back. That second coffee every day could be costing you $20 a week – that’s $1,000 a year. Buying your lunch rather than bringing it could cost you $2,500 a year. Buying one less bottle of wine a week could save you another $1,200 a year. With a bit of commitment, you can rein in your spending and have more money to repay debt.
3. Make a budget
The only way to get on top of your credit cards is to stop using them. Make a budget for the money you need to spend each week or fortnight, based on how much money is coming in and what your necessary expenses are, and stick to it.
Calculate how much is left over after you’ve paid for the necessities, then figure out how much you want for discretionary spending and how much you can put towards repaying debt. Also, put money into a contingency fund to cover unexpected expenses such as car repairs that could bust your budget and cause you to reach for the credit card.
4. Prioritise your debt
Work out how much money you actually owe on credit cards and loans – you may not realise how much it is. When you know how much debt you’re in, you can think more realistically about repaying it.
You need to pay at least the minimum amount due on all credit cards each month to avoid going backwards and in some cases being charged fees and penalties. But by paying only the minimum, you may never get the cards paid off; you need to pay more to make progress.
Consider:

• paying high interest credit cards and loans first to save on interest
• paying smaller debts first to give you the sense that you’re getting ahead, and that paying off debt is possible.

5. Make a repayment plan
Armed with your budget and having worked out your debt priorities, you can plan which debts you will pay off over what period of time. Having a plan will increase your sense of control over your debt; sticking to it will increase your sense of achievement.
6. Set goals and celebrate them
The thought of paying off all your debt may seem daunting, so breaking it down into milestones will help you see the way ahead. Set goals such as paying off 10%, then paying off 25% and so on.
Remember to celebrate each time you reach a milestone – buy yourself lunch or go to a movie as a small reward for your achievement.
7. Stick to the plan – and ride out the setbacks
Keep going with your repayment plan. If you miss a payment because of an unforeseen expense, stay positive. Avoid feeling demoralised or derailed by looking forward to the next debt milestone – you can get there.

SOURCE: http://yourloanhub.com.au/2017/09/say-goodbye-debt-and-hello-home-loan-in-sevenstraightforward-steps/