Pay your mortgage faster

Pay Off Your Mortgage Faster (Part 2)

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Last month we shared Part 1 of our guide to Paying Your Mortgage Off Faster.
Here is Part 2 with more of our top tips as well as even more tools to help you.

1. Offset It

If you can, use an offset account. A mortgage offset account is linked to your loan. The interest payable on the loan from month to month is calculated by deducting what is in your offset account from your current loan. For example, if your mortgage is $500,000 and your offset account has $10,000 in it, you will only pay interest on the remaining $490,000.
An offset account will save interest while still giving you access to your savings. It also means investors can preserve the tax deductibility of the mortgage.

Click here to calculate the savings with our Stars Broking Loan Offset Calculator

2. Understand The Fees

When reviewing your home loan, the interest rate is often what people focus on. However many don’t realise that fees can have a significant impact on how much you pay in the long run. It is important to do your research, especially when you are taking steps to pay down your loan quicker. Make sure that your lender doesn’t charge fees for extra repayments, refinancing, or any other steps you take in an attempt to save on your loan.

3. Check Your Mortgage Still Fits

Take some time each year to complete a health check on your mortgage and review what is on offer in the market. Ultimately, your mortgage needs to suit you and your circumstances, or you will wind up paying too much. If you think your current loan no longer matches your situation, speak to your finance broker. They will be able to find the right product for you, as well as negotiating appropriate rates on it.

Click here to calculate the savings with our Stars Broking Loan Comparison Calculator

To learn more or to find a loan that lets you pay down your mortgage balance sooner, call Marco Scannone from Stars Broking Services 0405252808 or click here.

Pay your mortgage faster

PAY OFF YOUR MORTGAGE FASTER (PART 1)

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When was the last time you looked closely at your mortgage, the progress you are making on paying it off and how it compares to others in the market?

Small changes in the way you approach your mortgage can add up to huge savings!

We have put together our top tips for paying your mortgage off faster. Check out Part One below as well as links to our free calculators.

1. Frequency is key

Cutting down the size of your payments and making more of them could see you pay off your loan faster and with less interest overall.
If you pay your mortgage monthly, consider changing to fortnightly repayments. For example, if your mortgage equates to $2,400 a month, cut this in half and pay $1,200 each fortnight. As well as having more manageable payments to make, by the end of the year you will have paid off an extra month’s repayment!

2. Even the little amounts add up

A minimum repayment is just that. For most loans there is no reason why you can’t pay more, whether here and there or regularly.
By rounding up to a full number or contributing an extra $100 or even $10, you’ll significantly reduce your mortgage.
It may also be worth considering putting all bonuses, tax returns and gifts into your mortgage. Diverting these large sums to your loan will help you pay it off quicker.

Click here to calculate the savings with our Stars Broking Extra Repayment Calculator

3. Interest rates may fall, it doesn’t mean your repayments have to

When fees & interest rates decrease your repayments may reduce. This doesn’t mean that you must lower your repayments. By keeping your repayments at the same level when interest rates are lower, you will pay down more of the principle with each payment. The result? You will speed up the progress of your loan.

Click here to calculate the savings with our Stars Broking Lump Sum Repayment Calculator

We have even more money saving tips! Keep an eye out, next month we will be posting Part Two of our top tips for paying your mortgage off faster!

To learn more about non-bank lenders and what options are available, call Marco Scannone from Stars Broking Services 0405252808 or click here.

Buying a property? Our guide to the added costs of purchasing property

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At Stars Broking we love surprises! However, some surprises aren’t so pleasant… like coming across an unexpected cost when purchasing a property!
To help you avoid any unpleasant surprises, we have put together our guide to the added costs of purchasing a property:

Stamp duty

Stamp duty must be paid in order for mortgage documents to be legal. It’s essentially a tax levied by the state or territory government on the purchase value of the property or the market value. Therefore, it is based on whichever is greater.

Legal Costs

The legal transfer of ownership of the property will require a solicitor, conveyancer or settlement agent. They will perform property and title searches.  These ensure the seller is entitled to release the property. This may be by checking the strata body corporate records, for instance.

Inspections

Whilst pest and building inspections are an additional cost. The cost is money well spent and can save you money in the long run. A major building problem is not a discovery you want to make after the purchase is complete. Inspection costs can vary and are often dependent on the size of the property.

Agent Fees

If you are a first home buyer, this is one cost you don’t need to worry about. However, if you’re selling your current home to buy another, you’ll probably have to take these fees into account. Agents fees and commission is usually charged as a percentage of the sale price.

Borrowing Costs

Lenders have application, valuation and settlement or loan approval fees. These vary depending on the lender. Finance Brokers are familiar with these fees and can help you take them into account when choosing a lender.

Insurance

Depending on your loan-to-valuation ratio (LVR) you may be required to take out lenders mortgage insurance (LMI). Although the borrower pays for it, LMI is not insurance for the borrower. It protects the lender should you default on the loan. Besides that, you may also need building insurance if you are not purchasing a strata property.

Other costs you may want to factor into your budget when looking to purchase a home include moving costs, council rates, strata fees, renovations and furniture.

With so many things to consider, it can feel overwhelming. A Finance Broker will make sure you understand the finer details of financing your purchase. Want more information? Click here to get in contact with expert broker Marco Scannone today.

Self Employed? Here’s 6 Steps To Help You Secure A Loan

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Research shows 11.2% of Australia’s population is now self-employed and enjoying the many perks of working for themselves. However, when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders. Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contractor, entrepreneur, tradesperson or freelancer. When you are self-employed getting a loan can be difficult.

By being proactive and accessing specialist advice, self-employed applicants can enjoy a hassle-free road to securing a home loan. Check out our six steps for securing a home loan when you are self-employed.

6 Steps To Securing A Home Loan When You Are Self-employed

1. Check your credit history
Checking your credit history is a good step for anyone applying for a home loan. If you’re self-employed, it’s definitely worth taking the time to make sure your credit history doesn’t include any defaults or errors. These can hold up your loan application if they are not rectified in advance.

2. Crunch your numbers
Taking the time to work out exactly how much you’d like to borrow is also a good idea. That way, you can hit the ground running when you meet with lenders or your mortgage broker.

3. Get all your ‘docs’ in a row
Many lenders will lend to self-employed borrowers who provide their full business financials. This generally includes your personal and business tax returns for the past two years. If you have these documents on hand, and they reveal a fairly consistent income, applying for a loan should be relatively straightforward.
However, the hectic schedule that comes with running your own business means many self-employed borrowers’ tax returns are not up to date. If you have time on your side, consider working with your accountant to lodge your outstanding returns. If you’re in a hurry, you may wish to explore the option of applying for a low doc loan. See the next point for more details.

4. Consider a low doc loan
Low doc loans are offered by a wide range of lenders. As the name suggests, require less documentation than traditional loans. Many low doc loans only require 12 months of business activity statements instead of full financials. However, a downside of some low doc loans is that they may only be available at a lower loan to property value ratio (LVR). This means you may need a larger deposit.

5. Think outside the square
It may be possible to apply for a home loan using a Certificate of Income Declaration. This is a document that verifies your income and is signed by your accountant. It’s wise to consult a mortgage broker before applying for a loan in this way, as they can advise which lenders will accept an income declaration. It should be noted, however, that applying for a loan using such a document may mean that you need a larger deposit, as the required LVR may be lower.

6. Seek expert advice
Trying to navigate the home loan landscape solo can be difficult and may not produce the outcome you desire. There are many experts who can help self-employed people access a home loan, and a mortgage broker is a good first port of call. They will be able to provide you with an up-to-date overview of which lenders on their panel are most comfortable lending to the self-employed and explain the types of loan products available. They can also provide valuable advice around the documentation you will need before you submit your application, making the process a lot smoother and stress free!

While it’s a little more complicated for self-employed borrowers, getting a home loan can be easier than you’d imagined with a mortgage broker in your corner.

Want more information? Click here to get in contact with expert broker Marco Scannone today.

How much do you know about non-bank lenders?

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Deciding where to go for your home loan is one of the most important decisions you’ll make. While many prospective property owners will choose to use a mainstream lender, non-bank lenders also have their advantages.

What are non-bank lenders?

Essentially, a non-bank lender is a lender that’s not a bank, credit union or building society. It has its own source of funds, which it lends out with a margin for profit.

A non-bank lender may also be a company or individual who borrows money from a bank at wholesale rates and then lends the money with a profit margin added.

Most mortgage brokers work with both banks and non-bank lenders.

Potential benefits of a non-bank lender

There are several benefits associated with taking out your home loan through a non-bank lender, including:

  • Lower overheads, generally meaning lower fees. Non-bank lenders usually have smaller overheads, because they have fewer offices and fewer expenses when it comes to marketing and labour. This should lead to lower fees and better rates.
  • Customer service.Non-bank lenders try to offer a more personalised service because they tend to have a smaller database. It’s likely that you’ll be given more attention right through your home loan process, even after you’ve signed on the dotted line. Also, while you sometimes might deal with multiple people at a bigger bank, with non-bank lenders it’s more likely that you’ll be dealing with one person from the beginning.
  • Sometimes it can take a while to get a home loan approved by a big bank. With a smaller, non-bank lender, you may be approved more quickly because you’re potentially talking to the loan decision-maker.
  • Range of choice.Given the range of non-bank lenders out there, you have a decent chance of finding one that suits your particular needs and circumstances.Go with what works for you!

There are pros and cons for both big banks and non-bank lenders, so finding the right lender for you is what’s most important. You’ll be the one making the repayments, so you need to be happy with the rates, service and fees that are offered.

To learn more about Non Bank Lenders and what options are available Call Marco Scannone from Stars Broking Services 0405252808 or visit www.starsbroking.com.au