Q How much can I borrow?

This depends on a range of factors including your personal circumstances, the price of the property and any valuation that may be required (a bank valuation may not be the same as the purchase price). Depending on the lender, they may be prepared to lend up to 95% of valuation, depending on your ability to repay. It’s worth noting that loans of more than 80% valuation often require mortgage insurance, which the borrower pays for.

Q What is the difference between fixed and variable rates?

Fixed interest rates are locked in for a period of time and don’t fluctuate, so payments remain constant for that period whereas variable interest rates vary according to market conditions. Variable loans will increase or decrease over time which will directly affect your payments.

Q What is a split loan account?

Split loans give you the flexibility to structure a home loan in a way that best suits your situation. You can fix a portion of your home loan so that you have certainty with your repayments and have the other portion on a variable rate.

Q What is an offset account and how does it work?

It’s an everyday account connected to your home loan that lets you get money out of an ATM, pay bills or write cheques. Being linked to your home loan it assists in getting the Principal down and ultimately saving you interest. With interest calculated daily, every cent you have in an offset account works to pay off your home loan faster.

Q What’s a redraw facility?

This is when you withdraw extra money that you’ve paid into your variable rate home loan. The amount simply gets added to the amount you owe. You can redraw as you need, as long as you have available funds in the loan.

Q Can I make extra payments or pay a lump sum?

Yes, most loans have this facility allowing you to reduce the original amount borrowed so you pay less interest over the long haul.

Q Can I Switch Loans?

Making the decision to change loans or refinance, is difficult as there are hundreds of loans available from hundreds of lenders. On top of that, there are other factors to consider such as how long do you want your loan period to be or how much you can afford each month? Some loans have early pay out penalties and other costs you will need to consider. Sometimes re- financing is not the answer and not the right option for you.

Q Am I eligible for the First Home Owner’s Grant Scheme of $7000?

You will be eligible to apply if you:
are buying your first home
are an Australian citizen or permanent resident
intend to make the home your principal residence, and
start living in the home within a reasonable time. The payment will be the same regardless of your income.

Q What is Lenders Mortgage insurance (LMI)?

LMI protects lenders against loss should a borrower default on their loan.

Q What is the difference between a Principal and Interest Home Loan and an Interest-only Home Loan?

A Principal and Interest Home Loan is where the principal and the interest are repaid together for the term of the loan. An Interest-Only Loan allows you to pay only the interest on the loan. Property investors are suited to Interest-Only because it maximises the investor’s tax deductions.

Q How can I reduce my mortgage?

The secret to financial security is making your money work for you.
Here are some tips to obtain financial security:
Evaluate – review your current financial position comparing your total income against all outgoings.
Budget – recording your day to day expenses is the key to financial control. By using your cash flow more effectively you can reduce your current commitments.
Plan – set your future personal and financial goals. This will give you an incentive to succeed.
Select – choose a loan that offers features and benefits that match your individual lending needs, not just now but into the future. This will assist you to repay your loan sooner.

Q Should I refinance?

Decide whether your existing financial arrangements still suit your current circumstances. If your current loans or credit card debts are not providing you with the desired results and you are paying too much, consider refinancing or consolidating your debts to achieve a financial benefit. These days, there are a wide range of finance products from many different lenders available. Finding the right loan may greatly reduce your loan term, interest payments or repayments enabling you to obtain greater financial security.

Q What tools can I use to help me select the right loan?

This can often be a daunting task. For those that like to do research before meeting with a broker or lender, there are many websites that have very basic information such as interest rates. Unfortunately there are many variables that come into play when selecting a home loan. Ratesonline provides very comprehensive information on over 700 home loan products that is updated daily.
You are able to research many loans and submit an enquiry or application and will be contacted by either a broker or lender.

Source: www.ratesonline.com.au

Source: www.ameinfo.com

Danial Schon, Vice President of Schon Properties, talks to AME Info about the Dubai real estate market, which sectors investors should be looking into for the biggest returns and why he thinks that prices across the city can only keep increasing.

Schon Properties is well established in Dubai’s property market.

The company already has four projects under development.

Its flagship residential projects are the Dubai Lagoon development and Schon Suites and the latest launch, the Signet project in Jebel Ali.

The Signet is a mixed-use development that will allow people to make use of one space for their business and residential needs.

This, Schon believes, will prove popular in the face of ever-increasing commercial rental costs.

‘This project was made keeping small businesses in mind.

‘The biggest problem for these people when they move to Dubai is that, because of the rising costs of rent they can never find a place.’

Recent reports that home owners would not be automatically eligible for residency visas have added further questions for investors from outside the GCC.

‘I think that everybody is still seeking clarification on that,’ says Schon.

‘But I know that the government of Dubai is so pro-business, and the policies are for the benefit of the economy, buyers, end users and so on, that the final decision will work in everybody’s favour. I don’t think that it will be a case of ‘we were promised this but didn’t get it’.

‘But we do tell our buyers that the residency visas will be subject to approvals at that time. We don’t know what they might be, laws change all over the world, so we don’t say that you’re guaranteed a visa.’

Most profitable branch of Dubai’s real estate market

Of the various projects springing up across the city, all are designed to attract investors.

But though prices are spiralling in the residential, commercial and hospitality sectors, Schon believes that, for individuals, the latter will bring the best returns.

‘Serviced hotel apartments are definitely the most profitable, because Dubai is built on tourism. You see the campaigns all around the world.

‘We launched a project called Schon Suites about three months ago. The concept is that all the rent goes into a pool, then an independent auditor distributes the rent equally according to your percentage ownership of the building.

‘It’s for people who can’t build hotels themselves. And it’s a very good return, the projected yields come up to 20% per year - that’s on 10 year historical information from the Department of tourism and Commerce Marketing, the inflation rate and so on. We’ve done extensive research on this and the numbers are phenomenal.’

Dubai property prices to increase

Almost all developments have shown these increases.

Most of the projects in Dubai have posited double-digit growth over a 12-month period.

This growth, driven in part by speculation and supply shortages, will not slow down as more properties come online, Schon believes. The root cause of the price escalation is down to the construction component.

‘I think prices have a long way to go yet,’ he says. ‘Mainly due to the rising cost of construction, which is detrimental to the industry as a whole.’

Global factors, such as China’s decision to increase payments for steel imports by 40% above market rate, are continuing to have a local consequence.

‘Things like that have a huge effect. The minute you’ve purchased your steel it’s already going up 1.5% per month, that’s the rate that we calculate construction inflation at for our contingencies.

‘What this does is that it drives prices up, because it controls supply but the demand is still high. So, prices have a long way to go. People ask me why property is so expensive - the most important thing in development is not hype, it’s not marketing or sales, it’s delivery. If developers don’t price at the risk of tomorrow’s costs, then they will lose money. And, if that happens, the quality suffers.’

Increased regulation helps property market

‘The creation of Rera [Real Estate Regulatory Authority] will ensure that it never gets to the point where the credibility of Dubai is affected, because they will step in,’ Schon notes.

Rera is a prime example of how Dubai’s property landscape has changed, partly in response to concerns over the lack of transparency in the market. Government legislation has enforced a set standard of regulation among the city’s developers and agents.

‘Every transaction is regulated, everything is transparent. You have to set up an escrow account before anything is sold now,’ he agrees. ‘We also have green building guidelines to follow.’

Thanks to initiatives like these, Schon is convinced that the upward trend is certain to continue, and that investors should take advantage of the opportunities on offer.

‘We were offered plots in 2002 that we didn’t go for, because analysts were saying ‘the bubble’s about to burst’. These are the same reports that are still going around now. Anyone who says that is not looking at the whole picture.

‘Dubai is the centre of the region for property, there are also investors from Iran, Pakistan, India. Even Chinese groups have started investing here. Everybody wants to be involved.’

12-Jul-2008
Every week many families try to realise the dream of owning their first home and there are a number of suggestions from REIV that may help.

Firstly, familiarise yourself with the two main methods of selling a property, auction and private sale. A major difference is that in private sale you can make the sale conditional on obtaining finance and there is a three day cooling off period.

Decide on what you want in terms of size, location and price range. Register your name and requirements with agents who service the area you are interested in and ask them to let you know when suitable properties become available. Regularly check the newspapers and set up alerts on real estate internet sites such as realestateview.com.au.

If you are not buying a brand new home it is also a sensible idea to obtain a building inspection report before you make an offer or bid at auction, this will provide guidance on what needs to be repaired on the property and how much it may cost.

Organise your finances before making an offer or bidding at an auction. If you are bidding at auction you need to be able to provide a 10 per cent deposit, immediately following the auction, should your bid be successful.

When you organise your finances make sure that you take into account stamp duty, cost of conveyancing, possible moving expenses and the repayments allowing a bit of room for the fact that variable home loan interest rates can move up.

Finally, research the different levels of State Government financial assistance that may be available to you. Assistance is available for first home buyers and different stamp duty rates are applied differently for newly built homes in the city and in regional Victoria than established homes in the city.

Source: REIV

This weekends auction results did not produce any surprises except perhaps the Albert Park Victorian featured in The Sunday Age which was passed in near a million on a Vendors bid. The opening [genuine] bid was $700,000 and that was the only interest.Unusual for the area.and maybe, just maybe ,the “Quote” was too high.
 
Once again expectations were exceeded in Camberwell.Not surprising because of the suburbs proximity to the City and probably more importantly, the access to private schools.                                       
 
It will be interesting to read the release of median prices next week.These figures give a false impression of market conditions because “Median”means the difference between the hightest and the lowest sale prices in any given suburb for the quarter.It is not an average.                 
 
The commercial market.                                 
Listed Property Trusts[LPT’s] are taking beating and for a very good reason.Investors money is used as “equity” in the purchase of large commercial,industrial and retail assets and then,based on a valuation at the time of purchase, significantly geared.They then rely on regular re-valuations to pay dividends. As soon as there is a downturn in the market, valuations do not come up to expectations,dividends are not maintained at initial levels, unitholders get anxious and sell just to get out which has a serious impact on the value of holdings and unit prices.
 
The pattern will continue because yields are diminishing across all sectors of the non residential market.

By Brian  from Buyer’s Advocates Melbourne