Archive for February, 2011

For so long, the options that were available for First Home Buyers for finance has been restricted unless the borrower was able to come up with at least ten percent deposit or they were existing customers of a lender with an established credit history.

Neither of these was always an option but this meant that the options for finance were very narrow.

However, this is no longer quite the situation and over the last few days we have seen a number of lenders reduce the amount required as a deposit down to 5% or remove the need for a borrower to have been an existing client of the bank.

This is big news.

What’s more, we take this as a sign that the lenders are becoming increasingly confident not only in the economy and people’s ability to be able to meet their loan repayments in the future but also that housing prices will continue to rise in the medium to long term.

Will this see an increase in activity for First Home Buyers. You would think so as it will mean that more people have access to finance.

There is nothing more special than to have a client say thank you once a loan has settled.

This is especially when we have had to really push because we were faced with a really short 21 day settlement and a couple of other issues thrown in along the way to complicate matters so when we received the following email, it meant a lot:

Thank you, I was pretty excited – still am actually. Kathy is popping round later today. Thank you for everything you have done. Without you guys, it wouldn’t have been possible. I am sure of that!!

Caron

 

Watch out if your’re a Small to Medium Enterprise that hasn’t paid your taxes to the Australian Tax Office as the ATO announced earlier this month that they were targeting SME’s who failed to pass on the GST and PAYG deductions that they had collected.

It appears that over 60% of the outstanding taxes owed to ATO is owed by SME’s around Australia so this targeting should not come as a total surprise.

The problem is that many of these businesses have been using these funds for cashflow purposes and are not in a position where they can pay these amounts to the ATO when they do catch up and the only alternative is to seek the funds from alternative sources such as borrowed funds but this is not very easy to do.

There are, however, some options available depending on your financial position and whilst the majority of lenders will not provide funds to repay a tax debt, there are some that will so if you do find yourself in this position, then talk to us.

Running from the truth will not last forever and it appears that the ATO is getting tougher on people and businesses that don’t pay their taxes.

 

More and more we are hearing that it’s a buyer’s market out there. In simple terms, this means of course that there are more people trying to sell properties than there are buyers.

Most people avoid buying because a buyer’s market is usually a result of conditions that exist that cause people to stand back until “conditions improve” but it may in fact be just the time to get in and look around.

The longer a property is on the market and the less buyers there are competing for the property, the more likely it is to snare a bargain.

Never has it been more important to address this question than right now. It has always been the goal of most Australians to avoid paying rent and buy and, whilst it used to be the house on the quarter acre block, this is no longer necessarily the case.

There are a number of reasons why owning your own home is such a priority to so many Australians.

The big one is probably the fact that when you rent, you have no control over how long you can stay in the property other than for the duration of the lease. It doesn’t matter whether you lived at the one place for fifteen years and paid rent on time without fail – if the landlord decides to sell and the new buyer wants to live in the house once the lease runs out, then you have no choice. It’s time to move.

Or maybe you are tired of the fact that the rent keeps going up but when you question it, the answer is a polite but blunt “take it or leave it”.

And then there is the frustration that you feel when you realise that where you are living doesn’t really feel like home because you can’t even hang a picture without having to worry about being told to take it down.

But there is more to the argument than just these issues.

When you rent, the money you pay is dead money. You get no benefit from it on a long term basis and there is no end to it but the landlord obviously does otherwise they wouldn’t own the investment property you’re renting in the first place. You see, your rent money helps makes them wealthier because they gain from the value of the property increasing. It’s their financial position that is improving – not yours!

There are of course arguments against buying your own place and stay as a renter and undoubtedly one of the biggest would be the flexibility that goes with renting as decisions only need to be made as far ahead as the end of the lease period and obviously as circumstances such as employment change, there is more flexibility when you rent as it is not a long time commitment. It’s also usually cheaper to rent closer to services than it is to buy.

Maintenance is another good one because the responsibility for this lies with the property owner.

The problem with deciding whether to rent or buy is that it is a mixture of emotional and financial factors and it very much does depend on what’s most important to you.

If renting does seem to be the answer for you, then the answer may be to do just that but to build wealth through some other means such as investing in property.