Brisbane North

Last Tuesday the RBA cut interest rates to the lowest point we’ve seen in over half a century.  To put this historic move into context, the last time rates were this low, our country had only had television for four years!

As a mortgage broker, I find that most home owners I meet with do not know the current interest rate payable on their home loan – given your mortgage is likely to be your biggest household expense, this is quite alarming.

When taking out a new loan, it’s important to not only know what interest rate you’re starting out on, but what it will default to after a fixed or ‘honeymoon’ period.  Quite often people get seduced by an attractive upfront interest rate for the first couple of years only to find they revert back to the bank’s standard variable rate soon after.

With the RBA cutting rates by a further 25 basis points, now is a perfect time for you pull out that home loan statement and check your rate! You may have heard that your bank has passed on the rate cut, but did they pass it directly on to you and your loan product?  Is this rate competitive when compared to other banks? These are just a couple of questions you should ask yourself each time interest rates drop.

For a home loan of $350,000, a rate drop of 25 basis points takes $73 off your monthly repayments OR if you can comfortably afford it, why not maintain the same repayments and reduce your debt more quickly?  That extra $73 per month could save paying over $36,000 in interest over the next 30 years.
Why not spend some time playing around on an online mortgage repayments calculator and see how much you can save.

Cara Quinn
Mortgage Broker, Loan Market
mob: 0438 284 488

With increasing demand for inner-city and urban living, one option for developers and councils is the tall unit block. It is a great way to squeeze as many people as possible into every square metre of expensive, inner-city soil. Plus, services and infrastructure are usually in place. After a post-global financial crisis quiet period, we are now seeing this home option being developed again. Here are a few tips for those who want to live or invest in a home bought off the plan or in an established block.

For the sake of this article, we will look at units in new, modern or well-maintained blocks. There are different rules if you are considering buying in an older or dated apartment block.

Expect strata or body corporate fees. You cannot have housing solutions like this without sharing the cost of building repairs and this is what these fees are for. Make sure the charges are sensible; find out what they cost in other similar blocks. The more amenities, the higher the cost, but the more pleasant the lifestyle for you or your tenants. It also means a higher future value at sale time and higher rent. These fees are easy to budget for and will cover building insurance and exterior maintenance. Ensure there is some form of sinking fund to cover future maintenance issues.

In an established building, try to speak to other owners. This will give you insight into the day-to-day life of the building, its inhabitants and its management. The more central a building, the more likely it will be popular with renters. That can be good, but if almost the whole block is rental stock it means tenants will always have a lot of choice and can make low offers. When you inspect the property, listen hard. Acoustics are one of the biggest causes of battles within buildings.
Establish from the floor-plans how the property design will work for noise. Your bed should not adjoin the main living area of the next unit. Never buy a unit without establishing what light it receives. Units on the dark side can feel gloomy all year. Obviously, in urban locations the unit may face busy roads.

This may not be such a negative – providing windows can be closed and able to deaden the sound.

However, a main road aspect with no trees, factories nearby and no reason to raise the blinds can be depressing. All this is easy to evaluate in an established unit but is harder to ascertain in off-the-plan, so study the model, the plans and the site. Many people do not feel comfortable living above the fifth or sixth floors. Check your surroundings; being too low can mean no view other than the side of another unit block. In other situations, it can mean a leafy garden outlook.

When it comes to outside space, try to buy a unit with a balcony or terrace big enough for at least two chairs and a table. Anything smaller is arguably pointless. If you select correctly, and pay the right price, units can be a great option. Exercising care and attention when buying can pay dividends in the future. As they say, onwards and upwards.

Source: www.couriermail.com.au (8^th May 2013)