Interest rate information
When getting a loan you need to seriously consider what type of interest rate best suits your needs, ie fixed rate vs variable rate. Before deciding ask yourself the following questions:

• Do I want certainty in knowing what my interest rate will be (and therefore repayments) in 1, 3 or 5 years time?
• Do I want to make lump sum repayments to my loan?
• Do I want to be able to redraw on the advance payments that I have made on my loan?
• Do I want to implement the benefits of a 100% offset bank account?
• What are the industry experts predicting as the future of rates?
• How long do I believe I will ‘hold’ the property I’m purchasing?

By answering these questions you will go a long way in determining what type of interest rate best suits your needs. Always remember you can choose a ‘Combo loan’! For more information on Combo Loan, click here.

Tax tips for Investment Property Purchase
Before purchasing an investment property, it’s crucial that you see a qualified accountant to asses your personal situation and determine how investment property ownership will affect you. Some of the issues to consider include:

• Affordability in owning an investment property?
• Who will own the property? i.e. both husband and wife or just the husband/just the wife
• Do you know the pros and cons of Company ownership v’s personal ownership?
• Negative gearing benefits whilst holding the investment property
• Who will the borrower/s be?
• Do you know the rental return from the property?
• Will you manage the property yourself or will an agent manage it on your behalf?
• Are you aware of tax deductible expenses in owning an investment property? Improvements v’s repairs.
• Are you aware of depreciation benefits? Make sure you get a Depreciation Schedule!
• Capital gains implications of when you sell the investment property.

Choosing a property/Buyers Checklist
Buying a property will probably be the most expensive purchase you will ever make. As a result you must seriously consider what you are about to do and ensure that you are ‘armed’ with all the necessary information required to make an informed decision.
Points to consider:

• What is my borrowing power? Does this match with where I want to live and the type of property I want to live in?
• What can I afford to repay on a loan?
• What surrounding infrastructure does my lifestyle require? ie Transport, shopping, education, major roadways, medical & employment.
• Will the property fulfil my future needs or are you only concerned with right now? ie: size of property
• Do I want a new property or am I prepared to renovate?
• Do I want established or do I want to build?
• Do I want a house with a yard or an apartment?
• Have I researched the surrounding suburbs and property selling prices? Relatively inexpensive data can be purchased from the Valuer Generals Department (visit www.landgate.wa.gov.au)
• Is the area I’m looking at likely to appreciate in the future?
• How has the area historically appreciated? ie am I buying at the peak?
• Does the local council have future plans for the particular street or suburb?
• Will my existing furniture fit?
• Have I visited the property at least 2 times and taken photos/video?
• Do all property improvements comply with council requirements?
• Should I get a structural report? (Better Choice strongly recommends that you do!)

What are the associated costs in purchasing a home?
There are a myriad of associated cost in purchasing a home! Outlined below are some of the costs that a borrower may need to pay.

1. Stamp duty on the transfer of the title of the home or block of land into your name.  However, in Western Australia first home buyers receive a stamp duty exemption based on the criteria below:
   • House up to $500,000 purchase price the borrower pays $0 stamp duty
   • Land up to $300,000 purchase price the borrower pays $0 stamp duty.
2. Settlement Agent Fees are another fee that the borrower will encounter. Settlement agents will manage the conveyancing of the property through to settlement. There is a standard schedule of fees depending on the price of the property, but the fees are negotiable due to the competitive nature of the industry. 
3. Transfer Registration Fees is a Government fee a borrower must pay to register the “Transfer of Land”.
4. Water and Shire rates are payable in advance and they generally come due July/August each year. Hence, you are paying rates for the forthcoming year. Depending upon what time of the year you buy will dictate how much you reimburse the vender of the property.
5. You should always leave a little aside for miscellaneous expenses such as insurance (home and contents), moving expenses (if required), getting the telephone connected (if required) plus any other little expenses that may pop up.
6. Lender Application Fee may be charged to you. If the lender of your choice does charge a fee it would cover such expenses as:
   • Lender Establishment Fee
   • Valuation Fees
   • Documentation Preparation Fee
7. Better Choice Mortgage Services would recommend for you to leave approx $700 to cover the above fees. Remember some lenders do not charge an establishment fee.
8. Mortgage Registration Fee is made up of various sub fees that approximately amounts to $100.
9. Loan Stamp Duty is another Government Fee
   • Home loans: Range from $20 up to $16,000 and $.0125 per $100 thereafter
   • Investment Loans: Expect to pay $0.20 per $100 of the Investment property loan
10. Mortgage insurance is another fee that you may pay. Generally, insurance is required on your loan if the lender advances you greater than 80% of the purchase price. The insurance policy protects the bank should the borrower default on the loan and the lender can not recoup enough from the sale to payout the loan. The insurer will payout the shortfall from the sale of the property to lender and then attempt to recoup that shortfall from you the borrower.

Pre-approvals
Why wait until you find a property before you start organising finance. At Better Choice Mortgage Services, we strongly recommend that you get your finance approved in principal, (a pre-approval), before you go shopping for your home.

Why get a pre-approval?

1. Your financial situation is assessed and any issues that may arise are sorted out prior to you contracting to buy a property.
2. Pre-approvals last 3-6 months
3. There is no cost to you! Neither the lender or Better Choice Mortgage Services charge a fee to arrange pre-approvals.   
4. Vendors and Real Estate Agents love dealing with purchasers who have pre-approved finance
5. Having pre approved finance may enhance your bargaining position when negotiating on the purchase of a property. Especially, in the case where there are other purchasers who are also interested in the same property as yourself.
6. With pre-approved finance, once you find a property, the time frame in settling the property can be shortened considerably.
7. Pre-approvals do not obligate you to purchase a property.
8. If your pre-approval expires and you have decided not to purchase a property, neither Better Choice Mortgage Services nor the lender will charge you a fee.

So you have to ask yourself, why wouldn’t I get a pre-approval???

Feel free to contact us today to discuss with no obligations.

Asset Protection

Take a minute to imagine how your loved ones would cope if you were to pass away or have an unfortunate accident and not be able to work for an extended period of time!

How would they be able to make the repayments on the mortgage? How would you feel if they had to sell the house and rent? You can avoid these questions by covering your family with life and disability protection.

A Better Choice Consultant can offer a competitive life and disability protection plan to suit any situation.

Contact us today, to ensure you have peace of mind knowing that your loved ones and assets will be taken care of if something unfortunate happens to the primary income earner.

Feel free to contact us today to discuss with no obligations.