Jacqueline Barton

With today’s cost-of-living pressures, it’s more important than ever to regularly review your home loan to see how it stacks up against others.

Refinancing could allow you to find a more competitive mortgage and save you a lot of money over the course of your loan.

However, before you switch lenders, here are a few questions to ask yourself before refinancing.

What’s the cost versus the benefit?

When deciding whether to refinance, you need to understand all of the costs involved and weigh those up against the money you could be saving.

Here are some of the costs you may encounter:

• Discharge fee from your existing lender
• Mortgage registration fee to register your new home loan
• Fixed loan break fee for those on a fixed-rate loan
• Exit fee by your lender when you break the term of your loan agreement
• Settlement fee with the new lender
• Property valuation for the new lender
• Lenders Mortgage Insurance if you’re borrowing more than 80% of the property’s value
• Title search fee, so your lender can ensure that there are no outstanding claims on your property

Which loans will suit your circumstances?

Think about what kind of home loan will work for you, given your current financial situation and goals.

If you want to lock your interest rate in and know exactly what your repayments will be for the fixed period, a fixed term home loan may suit you.

If you’re banking on a cash rate cut in the future, you may decide a variable home loan is the way to go.

A split loan means you get the best of both worlds in the sense that some of your home loan is fixed, and some is variable.

Also, consider which interest-saving features you’d like with a home loan. A redraw facility or offset account, for example, can save you interest in the long run. Making bigger or more frequent repayments may also help you pay off your loan sooner.

Do you want to increase your loan?

If you’re refinancing, it’s a good opportunity to consider whether you want to top up your loan.

Perhaps you’ve been planning a renovation and need some extra funds to get your reno dreams off the ground? Maybe you want to buy an investment property or get a new car?

Refinancing could allow you to access additional cash to achieve your goals.

Would you benefit from debt consolidation?

If you’re juggling multiple debts at once, such as a personal loan and credit card debt, it may be worthwhile considering debt consolidation.

With debt consolidation, you essentially roll all your debts into your home loan. It means you only have to make one repayment, making it easier to manage your debt.

It’s important to remember that you may end up paying more interest over the life of the loan if you go down this road, so speak to us and we’ll crunch the numbers for you.

Who can help me with refinancing?

Refinancing is not necessarily right for every borrower, but it’s something that every borrower should at least consider. As your mortgage broker, we can work through the pros and cons of refinancing with you.

If we find you a more competitive home loan or one that better suits your needs, we’ll run through the fee differences, serviceability criteria, turnaround times and anything else you need to know about.

Please contact us for assistance to find out more about refinancing.

There are many reasons to consider renovating, from making your property more liveable to driving up its market value and increasing the rental income if it’s an investment.

So, which renovations should you consider when looking to generate a return on investment? Here’s some inspiration.

The kitchen update

The kitchen is often the focal point of a property, and it gets a lot of use, so it’s little wonder kitchen updates often drive up resale value. Consider giving your kitchen a facelift by removing walls and making it open plan, adding islands or storage areas, or upgrading benchtops, splashbacks, cabinetry, and appliances.

While it may be tempting to completely rearrange your kitchen layout, relocating plumbing or electrical work can significantly add to your overall costs. Keeping the cabinets in place and simply replacing or resurfacing the doors can offer substantial savings.

Cost guide: Anywhere from $10,000 to $45,000+.

The bathroom remodel

After the kitchen, bathrooms are possibly the next most popular area of the home to renovate. Buyers and tenants love fresh, modern bathrooms, so it’s worth considering as part of your renovation plans.

You can start simple by replacing old grout and upgrading fixtures such as taps, sinks, showerheads, and mirrors. Re-tiling or adding new baths and showers will obviously cost more but may pay off in the long run. If you’re looking to get fancy, consider adding heated towel bars and flooring.

Cost guide: Anywhere from $8,000 to $35,000.

The curb appeal boost

First impressions count, and when it comes to prospective buyers or tenants, you want your property to make a good impact. Landscaping can help boost the property’s curb appeal and add value.

If it’s an investment property, low-maintenance plants are a smart choice. You may also consider adding lighting and updating the fencing to give your property that ‘wow’ factor.

Cost guide: It’s recommended to avoid spending more than 5% to 10% of the property’s value on landscaping. The national median property value is $779,819, so in this instance, budget for between $39,000 and $78,000.

Landscaping estimates vary widely, so make sure to consider multiple quotes before contracting a landscaper.

The granny flat build

If you have space for it, why not consider building a granny flat to increase your property’s value? Many homeowners are turning to granny flats to generate extra income.

According to CoreLogic, adding a granny flat could boost home values by 30 per cent and add around 27 per cent to rental income.

Be sure to get in touch with your local council to find out about planning permissions and anything else that’s required. It’s also a good idea to speak to your accountant about the tax implications.

Cost guide: The average cost to build a granny flat is $80,000 to $160,000.

The expansion

If your house is suitable, you could consider expanding the footprint of your home.

When you decide to expand your home, you generally have two options: build outwards or upwards. Many homeowners hesitate to add a second storey, fearing that the costs will be significantly higher than those of a ground-floor extension.

To reach a decision, you’ll need to weigh up your budget, your circumstances, the block of land, and your existing home to work out which option suits you. It’s estimated that building up will cost about 30% more than building out but could add between 30 to 60% to the value of your home.

Cost guide: Roughly $1,850 to $3,000 per square metre depending on the “degree of difficulty”.

Like to explore your finance options?

If you’ve paid down your mortgage somewhat or your property’s value has increased, you may be able to access your equity to get your reno off the ground. Otherwise, we can run you through other finance options available that could be available to you.

Please contact us for assistance.

*Costs and prices in this article are indicative and should only be used as a guide. They also vary locally and are subject to market forces.

Tax time. Nobody hears those words and thinks, “yay, it’s the most wonderful time of the year!”

But tax time can be rewarding, especially if you receive a tax refund at the end of it. It’s also a great opportunity to run through your finances and assess where you’re at.

If you’re a property investor, it’s important to be across all of the tax deductions that could be available to you. Here are some tips.

Understand which rental expenses you can claim

As long as expenses are for the purpose of producing rental income and you have a record to prove it, you can generally claim them as a tax deduction.

The Australian Taxation Office (ATO) breaks rental expenses into three categories:

1. Expenses you can claim a deduction for now (in the income year you incur the expense). Examples include interest on loans, council rates, pest control, insurance, repairs and maintenance, and depreciating assets costing $300 or less.
2. Expenses where you can claim a deduction over several years, for example capital works, borrowing expenses, and the decline in value of depreciating assets.
3. Expenses you can’t claim a deduction for, such as personal expenses if you’re living in the property some of the time. Some expenses of a capital nature and the purchase of second-hand (or used) depreciating assets after 9 May 2017 are also excluded.

Apportion expenses correctly

With the advent of vacation rental companies like Airbnb, many people are increasingly renting out their properties for part of the year and earning an income from them.

If this is you, you will need to work out the amount of expenses that relate to your income-producing activities versus your personal use of the property.

The same applies if you only use part of the property to earn rent (you rent out one room), or if you rent your property at less than market rates.

You can find more information about how to apportion expenses correctly in the ATO’s rental properties guide.

Make sure you’re claiming every cent for eligible expenses over several years

You can generally claim a deduction over several years for borrowing expenses, capital works, and asset decline in value.

Borrowing expenses like loan establishment fees can be claimed for five years or spread over the term of the loan – whichever is shorter. Borrowing expenses of $100 or less are deductible in the income year you incur them.

You can’t claim a deduction for capital expenditure, but in some cases, you may be able to claim capital expenses relating to your property over several years, including:

• Capital works
• Improvements
• Substantial renovations

You can claim a deduction for the decline in value of depreciating assets used for income-producing purposes (e.g. timber flooring, carpets, curtains, and dishwashers). A quantity surveyor can prepare a depreciation schedule outlining the decline in value of depreciating assets for tax purposes.

Attend to maintenance sooner rather than later

If you’ve been putting off repairs or maintenance, it’s a good idea to do it before the end of the financial year. That way, you could claim eligible expenses back on tax.

Get the pest control people out. Service the smoke detectors. And fix the wonky lock the tenant complained about in their last property inspection.

Remember to claim your finance and insurance costs

Generally speaking, you can claim the finance costs associated with your property investment, including bank fees and charges, borrowing costs, and interest on loans.

Insurance premiums are also tax deductible, including building, contents, public liability, and insurance for loss of rent.

It’s always a good idea to seek advice from your accountant about your tax affairs. But, when it comes to your finance options, that’s where we come in. We can review your current investment loan, and/or line you up with finance for your next purchase.

Please contact us for assistance.

As housing prices continue to soar, many people are increasingly considering whether to buy a tiny home to live in or as a holiday home.

The tiny house movement has been around for some time now, but despite its growing popularity, legislation is yet to catch up. This has left many confused about what’s legal, and what’s not.

If you’re interested in joining the tiny home movement, here are a few things you need to consider before buying.

Why people buy tiny homes

• The price factor – tiny homes vary in price according to the design and materials. DIY kits can start from $10,000 to $20,000 for a simple design, while custom builds can be closer to $200,000.
• Environmental factors – if the idea of living simply and reducing your environmental footprint appeals, a tiny home could work for you. You may even consider living of grid (with a rainwater tank, solar panels and a compost toilet, for example).
• Reduced expenses – living in a tiny home reduces running costs for things like water and electricity. Handy in this day and age.
• Flexibility – tiny homes ofer a diferent way of living, with the freedom to relocate in future (if your tiny house is on wheels).
• For investment purposes – some people rent out their tiny houses to generate additional income streams.

What are the regulations?

Things can get a bit murky when you dive into the regulations around tiny houses. The rules vary depending on location, and many councils don’t even have clear tiny house regulations, making it tricky for aspiring tiny homeowners.

There are two types of tiny homes – those on a foundation, and those on a trailer on wheels.

Tiny houses on a foundation are considered fixed dwellings and are usually treated like any other building, in the sense that you need council approval and building permits.

To get around these requirements, many people keep their tiny homes on wheels. Councils often apply the same rules to tiny houses as they do to caravans. The trailers that tiny houses are constructed on also need to comply with
certain standards.

In most states, there are limitations on how long you can permanently live in tiny homes on private land. Some councils are relaxing these rules.

Bottom line: Contact your state/territory government and local council before buying a tiny house to see what the latest regulations are that apply to you. You’ll also need to look into the maximum size limits of your tiny home.

You can find more information, including local laws and state regulations, on the Australian Tiny House Association website.

What about finance?

If you opt for a tiny home on wheels (and it’s legally classified as a caravan), applying for a home loan won’t work. But that doesn’t mean your tiny home dream is dead in the water.

We may be able to line you up with a personal loan, for example, or in some instances, you may be able to use your existing equity to fund the build. Speak to us and we’ll run you through your finance options.

If you need finance to purchase land to park your tiny home on, or for the vehicle to tow it, we can also help with that.

If you’re interested in joining the tiny home movement, get in touch and let’s put the wheels in motion.

All information is intended to be a guide only and should not be considered legal advice, it’s always best to contact your state and local councils before purchasing a tiny house.