Cheap tricks to boost the value of your home

Man doing DIY

Tired houses are a yawn for their occupants and potential buyers when the time comes to sell. We look at some of the simpler ways you can add value and give your home a new lease on life, without turning yours upside down.

Lighten up

Natural light not only makes rooms brighter and appear larger, studies have shown it can make us feel calmer, happier and be more productive. What’s more, daylight is one of the best value additions you can make to your home. For around $800, a skylight or solar tube will light up a small, dim room or hall. Let light into larger spaces by adding a larger skylight, widening windows, replacing a solid door with a glass-paned one or, to really open things up, knocking down a wall. Tearing down walls is obviously the more extreme option but not necessarily as expensive as you might think. Firstly, if it’s not a load-bearing wall (get a licensed builder to check) you could do most of the hard yakka yourself. If the wall is brick or helping hold up your roof, get a professional to remove it. Taking down an average room wall costs around $2,000, but additional structural supports, such as beams, could double that. Even if you do have to fork out extra, you’ll be getting plenty of bang for your buck all day, every day. You’ll be glad you saw the light!

Clear that clutter

Clean, clear spaces in a home are highly sought – perhaps as an antidote for our busy, crowded schedules. Storage is king, but don’t rush to install built-in wardrobes or build a bigger garage. Get ruthless with your clutter, first. Go room to room, cupboard to cupboard, drawer to drawer deciding what should be ditched, donated or doted on. A great rule of thumb for clothes and household items is if you haven’t used it (or seen it) for two years, it’s time to toss it. If, after paring down, you still feel you need extra storage, consider organising the garage. Where once we strewed bikes, tools and boxes of Elton John LPs around our parked cars, garages are now sporting hooks and nooks to clear floor space and keep excess stuff in a most orderly fashion. Hangers and racks to get things off the ground are sold at hardware stores from $20 upwards. Or you can spend $1,000s with a garage fit-out specialist to create a whole new room with maximum storage (and still space for the car).

Lay of the land

No longer just a slab of lawn out front and back, the yard and garden have morphed into our outdoor rooms. If like many of us, you’re not blessed with an eye for design and a green thumb, it’s well worth paying a landscape designer up to $2,000 to scope the layout and specify what plants or structures should go where. You may even save considerably on the design fee – if you don’t mind being a bit of a guinea pig – by getting a referral for a final-year landscape student from a TAFE college. Look to remove trees or other foliage that block light, fix any broken fences or gates, cut back on expansive lawns that need mowing by paving or decking the area instead and create privacy with suitable trees or fencing.

Full frontal

Yes, first impressions really do count! Front doors have never made a grander statement, so consider what your current one is saying about you. If it’s humdrum, look at widening the entrance and fitting it with double doors or one of the new wider, chunkier front doors. Frame your front door with something that says “welcome”, be it a stylish plant in a pot, a tasteful sculpture or a neat path trimmed symmetrically with ground cover plants. You may find your money is best spent even further out front with a driveway make-over. For around $10,000 you can get an old concrete driveway smoothed and stencil-sprayed.

Your own canvas

Perhaps the cheapest and least intrusive way to transform an interior is to repaint. Dark rooms can be made bigger and brighter with the right, light hue, while bland homes can make a bold statement with a striking feature wall. The best thing about painting (or perhaps it’s the worst) is that most of us can tackle at least a wall or two, leaving us with just the cost of paint, rollers, drop-cloths and brushes. Those who don’t have the patience or time will pay up to about $8,000 for a professional to paint an average size home. Whether you go DIY or hire a pro, you should consider spending an hour and about $200 with a colour consultant. They will come to you and, with a designer’s eye, recommend palettes for your various rooms. They generally have preferred painters but, providing you pay for the colourist’s time, they usually don’t mind if you hire someone else or get stuck in yourself.

Touch base

Once you have decided on your action plan, touch base with your broker about how your mortgage is looking and what finance options are available for your proposed renovations. Be they big or small, your broker is more than happy to talk to you about all the options on the table.

The RBA has decided to once again leave the official cash rate unchanged at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With a combination of retail deflation (ie the price of retail goods falling) and continued weak wages growth still impacting economic growth, the Reserve Bank have signaled that we can expect to see rates where they are for the time being. They have indicated however that they expect the next rate move to be an increase and are concerned about the potential shock that this may cause the economy.

Rates remain constant now but it is important that you are prepared if they increase. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

The RBA decided to once again leave the official cash rate unchanged at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With weak wages growth, continued low inflation and a lack of significant economic growth we can expect interest rates to remain where they are for the time being.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

Reserve Bank of Australia has again opted to leave the official cash rate on hold at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With wages growth remaining modest and concerns emerging around the impact retail deflation is having on the overall economy, interest rates are predicted to be steady for the majority of 2018.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

For 2018’s first announcement RBA has opted to leave the official cash rate on hold at 1.5%

With the new year underway, we’ve come to the first rate news for 2018. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

In its first meeting of the year, the Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5%. The last rate move was in August 2016.

With inflation remaining well constrained, rates appear to be firmly on hold until at least late in the year.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

Borrower beware: the hidden costs of buying a new home

You’ve done the hard yards and saved a deposit, hunted down the right property and bartered a better price. The Sold sticker is all but slapped on the for sale sign. Then you realise there’s more than the agreed price to consider. If a car has on-road costs, then you might say property comes with on-street costs. Here’s a snapshot of what additional expenses you can expect when you buy a home.

Stamp duty

Next to your deposit, this is usually the biggest outlay. Stamp duty is a tax charged by state and territory governments on the purchase of property. The amount of duty charged will depend on the state government’s formula and the sale price. There are usually concessions for first-home buyers, ranging from discounts to extended payment periods. A good rule of thumb is to tuck away an extra five per cent on your deposit to cover stamp duty, plus some additional purchase costs. You should also check whether your state charges mortgage stamp duty on your loan amount.

Legal fees

You will need a solicitor or conveyancer to handle the legal transfer of the property title and make the necessary searches. Legal fees can vary widely. You are entitled to a quote up front, and should always ask for one. The more complex the transaction, the higher the fee. But don’t be tempted to cut corners. If there’s something you want to investigate about the property you are buying – compliance with development approvals, a heritage listing, potential flood levels, a shared driveway, proposed road corridors or rezoning (just to name a few) – this is your chance before your cooling-off period ends. Just remember your solicitor has probably not seen the property. While most will undertake thorough searches on your behalf, they won’t know your plans for the property. Speak up if there’s something specific you want to know.

Lending fees

Your loan itself may come with additional costs, including application fees, set-up fees and a property valuation. Depending on the type of loan, there may also be monthly account fees.

Lenders Mortgage Insurance (LMI)

Banks and credit unions will require you to take out this rather costly cover if they are lending you more than 80 per cent of the value of the property.
However, this insurance protects the lender, not you. It’s a safety net that covers any losses the lender may incur in the event of a mortgagee sale.

Mortgage registration fee

This is a charge by the state or territory land titles office to register the lender’s mortgage on the property’s title record. It’s paid by the borrower
and runs to around $125.

Pest and building inspections

Often lumped in together, these inspections provide very different information and are worth every cent. Don’t think you need one or the other. You need both, and each should be carried out by a suitably qualified and licensed expert. Often a building inspector is also qualified for pest inspections. A pest inspection costs about $100-150 and primarily checks for signs of damage caused by white-ants (termites) and borers. It can also shed light on rodent and cockroach infestations, which shouldn’t affect the structure of a property but may give you some bargaining chips on the price! A building inspection, at about $300, will report on the condition and structural integrity of the home, internally and externally, and flag any potential issues. Property sales are generally subject to building and pest reports, with the exception of auctions. If buying a property at auction, get these inspections beforehand.

Home insurance

Your home is likely to be your biggest ever purchase, so it’s well worth protecting with insurance. There are a number of factors that will affect the size of your home insurance premium, including location, the home’s age and building material, the rebuilding value and the size of the excess you choose. Your lender will require you to take out and show proof of home building insurance to cover the estimated amount they are lending you towards the building component of the property. However, this amount may leave you underinsured and, if the worst happens and you lose your home to a fire or severe weather, out of pocket.
Most insurers offer home building calculators online so you can estimate your sum insured to replace your entire home. Make sure you also factor in fences, swimming pools and any expensive building materials or fittings. Although not required by lenders, you should also take out contents insurance for your household items.

For 2017’s final announcement RBA has opted to leave the official cash rate on hold at 1.5%

We’ve come to the final rate news for 2017, in what has certainly been a jam packed year. We like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% for the 16th consecutive month.

This was an outcome that was again widely anticipated by financial markets. With inflation well constrained the status quo could well continue deep into the next year.

Regardless of whether rates move up, down or stay the same, your mortgage broker’s role remains unchanged. Your broker is always on hand to ensure you still have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to?get in touch with an AFG broker.

10 reasons why borrowers need a mortgage broker

In an age when technology helps us research, shop and even – at times – think, we might wonder what other help we could possibly need when it’s time to buy our next home.

But, unless you have weeks of spare time and a brain that can store hundreds of home loans, plus their fees and conditions, and then match them to your situation, log off and set up a time to see a mortgage broker.

Here are 10 reasons why a mortgage broker is as valuable as ever:

  1. It makes financial sense. For the vast majority of home loans, your mortgage broker’s service is free. Lenders pay mortgage brokers a fee when they connect them to borrowers.
  2. Mortgage brokers work for you, not the lender. As keen as banks and credit unions might be to open their coffers, they have an equal interest (pardon the pun) in making as much money as possible from you over the life of your loan. A mortgage broker, on the other hand, will put your financial needs first and look for the loan that best suits your circumstances.
  3. Spoiled for choice. A mortgage broker has access to hundreds of loans from a long list of lenders – far more than you will encounter if you choose to go it alone. Mortgage brokers also have access to more boutique and wholesale lenders who don’t traditionally advertise to mum-and-dad property buyers, have some fantastic products and are eager for a slice of the mortgage market.
  4. Save your legs. Mortgage brokers will do the loan application leg work for you, not only making life easier but giving you a better chance of swift approval because your mortgage broker knows what’s required from the lender.
  5. After-hours service. Most mortgage brokers will come to you at a time that suits, an appealing selling point for busy professionals and families.
  6. Perfect match. Contrary to popular belief, banks generally like to deal with mortgage brokers because they put forward home buyers who meet all the lending criteria. It can often save higher-risk borrowers from being rejected and earning a red flag on their credit history.
  7. Avoid the pitfalls. Honeymoon offers, exit fees and fixed rates are just some of the terms that can confuse and confound. Your mortgage broker will take a long-term view and navigate through all the lenders’ fees, terms and conditions to make sure you’re not paying more than you should over the full life of your loan.
  8. Borrow within your means. You’re less likely to over-stretch and get yourself into financial difficulty down the track when you take out your loan through a mortgage broker. Where some lenders may allow you to borrow to capacity or offer a loan that’s not quite right for your situation, a mortgage broker will always recommend the loan that makes the most financial sense for you.
  9. Switching is simple. If switching lenders, either because you’re refinancing mid-loan or have bought and sold, your mortgage broker will manage the inquiries and all the paperwork. If buying a property, they will also often deal with your conveyancer or solicitor to keep things moving along.
  10. Get a health check on your existing home loan. At any time you request, a mortgage broker can scan the lending environment to make sure you’re still getting the best deal. And if your circumstances change, your mortgage broker can deal with your existing lender or find a new loan to meet your needs.

 

Reserve Bank of Australia has again opted to leave the official cash rate on hold at 1.5%

With celebrations for the race that stops a nation in full swing, the Reserve Bank of Australia has made this decision.

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5%. The rate has not changed since September 2016.

This outcome was widely predicted by financial commentators. With inflation seemingly well under control and the Sydney property market now showing signs of cooling, many are predicting that the next rate change may not come until well into 2018.

Regardless of whether rates move up, down or stay the same, your mortgage broker’s role remains unchanged. Your broker is always on hand to ensure you still have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with your broker.

All in the family

The trend for adult children to remain in the family home for longer is putting a strain on their parents. But there are ways to make it work for everyone.

If you have a happy marriage and a comfortable home, studies indicate it’s more likely your children will delay moving out.

Well, they’re not silly, are they?

But, confirming the cruel irony of life, the same studies also show that having adult children remain at home can put a strain on parental relationships and finances. So you end up broke and unhappy, then they move out – right?

Well, there is another way. Handled correctly, the arrangement can benefit everyone, and help 20-somethings launch successfully into the world.

Today, about one in four, or 23 per cent of people aged 20- 34 live with their parents, up from about 19 per cent in the late 80s. Interestingly, significantly more men (27 per cent) than women (18 per cent) stay at home into adulthood.1

While some have never moved out, about half have left and returned, earning the tag ‘boomerang kids’. Some are shellshocked at the cost and responsibility of flying the nest, others want to save for a house deposit, and some return after a relationship breakdown.

No matter the reason, there are some basic rules to help minimise ‘boomerangs’ and reduce the impact on your sanity and hip pocket.

Teach your children to read, write and budget

Most would agree it’s never too early to teach your children the value of a dollar. Entertainer Toni Braxton raised eyebrows a couple of years ago when she revealed her primary school-aged children paid rent.

It was a nominal amount of their pocket money, but Braxton explained: “It’s so they can understand that when you get older and have to leave, you have to pay bills. It was a shock to me when I found out I had to pay bills, like, ‘What do you mean rent?’ So I thought I should instil that into my little boys.”

In today’s ‘swipe and go’ credit card age, young children are often unaware money is even changing hands, so it is more important than ever to take the time to explain financial transactions. And while pocket money can be divisive, if it comes with financial responsibility – to make your own decisions about spending/saving – it can be an important learning tool.

Have that hard conversation early

If your adult children decide to stay on after they have finished their study, or if they return to the family home after moving out, it is important to have a frank discussion. This can be hard but it will pay off, in the long run, to set ground rules early.

Experts agree adult children should contribute to the household costs, regardless of your financial situation. So it may be a good idea to research average rents in your suburb and discuss this with your children. Even if you only decide to charge a nominal rent, it is important they acknowledge real world costs. Also, let them see your electricity, rates, grocery and fuel bills and discuss how they will contribute.

If your child is studying or only working part-time, charging them the same amount of rent that’s expected of a full-time worker may not be reasonable or achievable. As a guide, it’s generally recommended to spend no more than 30 per cent of your gross monthly income (before tax) on rent.

If your child is saving to buy a car or a first home deposit, instead of paying the market rent rate, you might consider having them trade off some of the money for extra jobs around the house.

Setting up a direct deposit arrangement for rent payments can also save friction. And if you feel uncomfortable taking money from your children, and can afford the costs of having them under your roof, consider paying their ‘rent’ into a savings account and gifting it to them when they move out.

Accept that your children will struggle…and learn from it

Australian Parents Council Director Ian Dalton told The New Daily last year: “One of the issues we see quite a bit is that too many parents don’t want their kids to struggle.”

Dalton hits on a pivotal issue. Baby boomers recognise it is harder for their children in many ways – higher education now comes with fees, housing costs have soared and the job market is tight. No one likes to see their kids do it tough, but it is possible to ‘help’ your children too much, stunting their independence. Many well-meaning parents subsidise their children’s phones, cars and travel into adulthood.

Allowing your children to make financial mistakes (and learn to live within their means not yours) is part of allowing them to grow.

Seek help

Financial planners are now advising new parents to plan to support their children into their 20s. Nicknames such as KIPPERS (Kids In Parents Pockets Eroding Retirement Savings) and SLOPS (Singles Living Off Parents) indicate the problem.

This can put an additional financial burden on parents who should be saving for retirement. Financial advisors estimate having an adult child at home can cost anywhere from $10,000 – $24,000 a year depending how much parents subsidise extras, such as cars, phones, travel, entertainment and food.2

Some parents end up curtailing their own travel plans, retiring later or delaying downsizing so they can help their offspring. Discuss your situation with a financial planner. Charging your children as little as $150 a week adds up to nearly $8,000 a year. You could use this to supplement your retirement savings or to pay down your home loan or other debts.

Consider renovating your family home with a long term view

Talk to your mortgage broker about using the equity in your home to upgrade the family home. The extension you might like to build for your boomerang children could end up being your granny flat when it is time for you to pass the family home to the next generation and downsize your own living arrangements.

Try to remember there is an upside

This can be particularly true if your adult child returns with his/her own children in tow. You will in all likelihood be doing some extra babysitting, but embrace the bonds you are building. They could come in handy as you head into the territory where some extra help around your home could be just what you need.

1 Young Adults Then and Now, Australian Social Trends, 2013, Australian Bureau of Statistics.
2 Mother Can You Spare a Room?, Grind, Kristen, Wall Street Journal, May 3, 2013.