Exit Costs when refinancing

Refinancing can be a great way to save money if you believe you are paying too much for your loan, but there is more to it than just finding a loan with a lower interest rate and making the change. Before making the switch, we recommend you ensure the savings you could make outweigh the fees involved. Here are the different costs to consider:

Exit Fee

Although loans taken out after 1 July 2011 are not subject to deferred establishment, or exit fees, those taken out prior to this date may still be charged a fee. Also known as ‘early termination’ or ‘early discharge’ fees, they can sometimes be paid by your new lender but are normally applied to an early contract exit, which would be paid by you, the borrower.

Establishment Fee

The establishment fee, also known as ‘application’, ‘up-front’ or ‘set-up’ fee, covers the lender’s cost of preparing the necessary documents for your new home loan. They are payable on most new loans. Alternatively, in lieu of this particular fee, the lender could charge higher ongoing fees for the life of the loan.

Mortgage Discharge Fee

This fee Covers your early legal release from all mortgage obligations, which is not to be confused with an exit fee. Also known as a ‘settlement’ or ‘termination’ fee, its purpose is to compensate your lender for the revenue it may lose due to the contract break.

Lender’s Mortgage Insurance (LMI)

This non-transferrable premium means that if you hold less than 20 per cent equity at the time of your refinance, you may have to pay LMI even if you paid it on the original loan. Extra care is also needed here because regardless if you hold 20 per cent of the original valuation of the property, you may not if the property’s value has decreased and; while LMI may not have been a consideration in the original loan, it may be payable on the refinance.

Stamp Duty

If your purpose for making the switch is to increase your loan amount, for example to fund renovations, then stamp duty will apply only to the difference between the original loan amount and the refinanced loan amount. Different rules apply in different states, so it’s worth speaking to us to see if this charge applies.

Other Government Charges

Fees are applied for the registration and deregistration of a mortgage so that all claims on a property can be checked by any future buyers. Varying from state to state, these can potentially add up to $1000 or more.

Break Fee

If you were on a fixed rate loan, your lender is likely to charge you a fee for ‘breaking’ out of the loan term. This fee varies depending on the amount owed, the interest rate you were locked into, the current interest rate and the duration of your loan.

Although some of these fees can be negotiated by a broker, the total cost can be substantial. As your mortgage broker, we can help you decide whether refinancing is the right option for you to achieve your goals. We can also ensure you are only paying the relevant fees for your unique circumstance. To find out if it’s the right time for you to refinance, please reach out.

We’re here to help and would be happy to answer any questions.

Welcome to our May 2021 Newsletter

The property market is in full swing with overall market conditions remaining strong despite signs of the growth trend gradually slowing down. We are now seeing an increase in new property listings, which will likely continue to support strong buyer demand. Read on to find out more.

Interest rate news

The Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10 per cent at its meeting on 4 May. The Board also decided to maintain the current policy settings, including the yield on the three-year Australian government bond, as well as the parameters of the Term Funding Facility (TFF), and the government bond purchase program.

RBA governor Philip Lowe said in the previous meeting that the rollout of vaccines is supporting the recovery of the global economy, although the recovery is uneven. In Australia, the economic recovery is stronger than had been expected. “Housing markets have strengthened further, with prices rising in most markets. Housing credit growth to owner-occupiers has picked up, with strong demand from first-home buyers,” Lowe said.

The latest REA Insights Weekly Buyer Demand Report shows that the buyer demand remained high last week, falling slightly by 0.6 per cent. Demand has been at high levels throughout the latter half of 2020 and increased further in 2021, which suggests the continuous momentum in the housing market. Paul Ryan, REA Group Economist said, the demand is likely to remain at elevated levels over the coming weeks and months as interest in the property market remains high. “However, more stock coming onto the market will likely lead to more buyers transacting on new homes, which in turn could weigh on the overall level of demand,” he added.

Home value movements

CoreLogic’s home value index shows price growth slowed down in April, however home values rose by 1.8 per cent across all capital cities and the rest of state regions. The housing values are still rising at a rapid pace in the past three months at 6.8 per cent however, the pace could slow further over the coming months. “The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth. With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs,” CoreLogic’s Head of Research, Tim Lawless, said.

Despite the slowdown, growth in housing values are still strong in both the capital city (1.8 per cent) and the regional markets (1.9 per cent). Darwin (2.69 per cent) and Sydney (2.39 per cent) recorded the highest jump in dwelling values while Perth (0.84 per cent) recorded the lowest rate of growth in April.

Data shows that the four smallest capital cities recorded double digit annual growth for the year as of April. Darwin has the highest growth for this year so far at 15.31 per cent, followed by Canberra (14.20 per cent), Hobart (13.75 per cent) and Adelaide (10.28 per cent). Melbourne (2.25 per cent), due to the larger downturn, has recorded the lowest annual growth as of April.

CoreLogic data now shows above average new listings added to the market signalling an improvement in vendor confidence. “Prospective vendors are likely becoming more motivated to test the market thanks to such strong selling conditions as well as housing prices pushing to new record highs in most areas,” Mr Lawless said. This strong selling conditions were seen in the auction clearance rates which were in the upper 70% range throughout April.

May Insights

Talk to me before you get started

So, what’s on your to-do list this month? Remember, whether you’re buying or selling, now is the time to start preparing. Please give us a call to chat about your plans. We’d love to hear from you!

Additional sources:
https://www.corelogic.com.au/research/monthly-indices
www.realestate.com.au
https://www.realestate.com.au/insights/april-28-rea-insights-weekly-buyer-demand-report-2021/
https://www.rba.gov.au/monetary-policy/rba-board-minutes/2021/2021-04-06.html
https://www.rba.gov.au/media-releases/2021/mr-21-04.html

Smart ways to save for a deposit

Owning your own home is one of the major life goals for most people. Saving for a deposit can seem daunting at first, but it doesn’t have to be.

Here are a number of things to consider to get you started and on track for home ownership sooner than you think.

Analyse your current financial situation

Ok, this one seems a little obvious, but knowing where you’re starting from will help you set up for success. Think of it as your first brick on the foundation! Understanding your financial situation will get you in a good place to start setting your budget. Scrutinising your current financial situation should include things like current assets, income, any debts and living expenses. Now you’re able to see how much you’re able to save each month to put away for a deposit.

Know how much you can borrow

Having an idea of the amount you can borrow – which is determined by your current financial situation – can help you figure out how much you’ll need to save. There are a number of borrowing calculators out there that can help give you a ballpark figure, but they don’t confirm the size of repayments you’ll be able to make after you meet your other living expenses and financial commitments.

It’s always best to speak to your broker to get a more detailed assessment. With a loan pre-approval, you’ll know exactly how much you can afford to pay for a property. It gives you a solid understanding of your finances and a clear spending limit. Getting pre-approved through a reliable broker can also help identify possible issues that you may not be aware of, as well as spot something that may have been overlooked.

Know how much you need to save

Once you have an idea of your borrowing capacity, you should also consider additional fees and associated costs when purchasing a property. These include:

  • Lenders mortgage insurance
  • Other upfront costs are associated with buying a home
  • Your legal fees
  • The building fees
  • How much will stamp duty set you back
  • Moving costs
  • And don’t forget that all-important insurance!

How long will you be saving for?

So, if you know how much you can save per month and how much you can borrow, you can now figure out roughly how long it’s going to take to save that deposit!

Check out this handy savings goal calculator to work out:

  • How long it will take to reach your savings goals
  • Steps to take to put your plan into action.

When you’re close to your goals, seek pre-approval, which means lender has agreed in principle, to provide finance towards the purchase of a home without committing to final approval.

Consider if you’re eligible for any government grants

If you’re a first home buyer, you may qualify for the following:

Tips for saving your deposit

  • Cutting down on unnecessary spending
  • Find ways to generate a second income (selling unwanted goods, getting yourself a side hustle)
  • Review what you’re spending regarding bills. Make sure you have the best deal when it comes to utility providers
  • Defer any big purchases… maybe it’s not time for that BMW!

One of the easiest ways to get the ball rolling with your home loan deposit is to reach out to your mortgage broker. We’re here to help you with anything you need, and with years of experience, we will be able to get you on the road to home ownership in no time.

Contact us today.

RBA Cash Rate May 2021

RBA cash rate announcement for May 2021

The Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10 per cent at its meeting today. To view the official RBA statement, please visit the Reserve Bank’s website.

RBA governor Philip Lowe said the rollout of vaccines is supporting the recovery of the global economy, although the recovery is uneven. In Australia, the economic recovery is stronger than had been expected. “Housing markets have strengthened further, with prices rising in most markets. Housing credit growth to owner-occupiers has picked up, with strong demand from first-home buyers,” Lowe said.

The latest REA Insights Weekly Buyer Demand Report shows that the buyer demand remained high last week, falling slightly by 0.6 per cent. Demand has been at high levels throughout the latter half of 2020 and increased further in 2021, which suggests the continuous momentum in the housing market. Paul Ryan, REA Group Economist said, the demand is likely to remain at elevated levels over the coming weeks and months as interest in the property market remains high. “However, more stock coming onto the market will likely lead to more buyers transacting on new homes, which in turn could weigh on the overall level of demand,” he added.

Some lenders have passed on bigger interest rate cuts than others in the recent months, so if you’ve had your mortgage for some time, now is a good time to review your current loan to ensure it still works for you. Call us today!

Property market snapshot

If you’d like to know more about this announcement and what it means for you, talk to us today!

Monthly Home Values figures as of 30 April, 2021. Australian auction results, clearance rates and recent sales for the week ending 2 May, 2021. The clearance rate is preliminary and current as of 6:59 am ADST, 3 May, 2021. We recommend that you seek independent financial and taxation advice before acting on any information in this email. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees and charges apply.

Sources: CoreLogic RP Data Daily Home Value Index: Monthly Valueswww.realestate.com.auMinutes of the monetary policy meeting of the Reserve Bank BoardStatement by Philip Lowe, Governor: Monetary Policy DecisionApril 

Welcome to our April Newsletter

It has been an exciting month in the property world. The national home value index recorded the fastest pace of capital gains in 32 years. Check out the latest news and insights on the property market near you.

Will buying a smaller investment property provide a good ROI?

Will buying a smaller investment property provide a good ROI?
Will buying a smaller investment property provide a good ROI?

A small property could potentially make a great investment, provided you choose the right one. Learn more about how choosing the right small property can give you the investment returns you’re looking for.

Preparing for settlement day

Preparing for settlement day
Preparing for settlement day

You’ve found your dream property, had your offer accepted, and now there’s just one last yet very important milestone to achieve – settlement day. Here’s how you can prepare for the big day.

Should you manage your investment property?

Should you manage your investment property?
Should you manage your investment property

While managing your own investment property may look simple, there’s a little more to it than making sure the house is standing and collecting the money. Discover if managing your own property is for you.

Welcome to our March 2021 Newsletter

The autumn property season is upon us, and while the weather may be cooling down, the property market around the country is continuing to heat up! Check out the latest news and insights on the property market near you.

Is it time for a Home Loan Health Check?

Is it time for a Home Loan Health Check?
Is it time for a home loan health check?

With a home loan it’s easy to just ‘set and forget’. But it’s sensible to review your home loan every two to three years. Here’s why.

The search for your dream home

The search for your dream home
The search for your dream home

Buying your first home or investment property can be an emotionally charged process. We’ve put together a list of questions to guide you on your next property search.

Fun ideas for your Easter celebrations

Fun ideas for your Easter celebrations
Fun ideas for your Easter celebrations

It’s hard to believe Easter is almost here, but by now you would have noticed all the chocolate eggs appearing around the supermarket. Here are some fun ideas for your celebrations this year.

Welcome to our February 2021 Newsletter

The property market made a strong start at the beginning of the year and it continues to heat up as we progress through February. Check out the latest news and insights on the property market near you.

Smart ways to save for a deposit

Smart ways to save for a deposit

Saving for a deposit can seem daunting at first, but it doesn’t have to be. Here are a number of things to consider to get you started and on track for home ownership sooner than you think.

What do you know about your credit report?

What do you know about your credit report?
What do you know about your credit report?

Your credit report paints a picture of your life as a responsible bill payer and borrower. Discover more about your credit report and how it may affect you when applying for a loan.

How to say “I Love You” to your home

How to say "I Love You" to your home

It’s time to show your home the love it deserves. And what better time than the month of Valentine’s?

Evaluate your business performance

This is a great time to evaluate your business performance and plan how you can achieve your business goals in 2021.

As a business owner, I understand that poor cashflow can hinder your ability to develop your business. I can help you find a creative finance solution for your unique business requirements.

I can help you with:

  • access to an extensive panel of business-focused lenders
  • competitive interest rates – some of the lowest in the market
  • secured or unsecured finance for multiple purposes
  • flexible credit lines
  • cash-flow and inventory finance solutions
  • obtaining machinery and equipment without tying up your capital
  • flexible terms and affordable repayment structures
  • very fast approval and access to funds, and much more.

I’m happy to work with you and your accountant to design a solution that’s right for your business needs. Call me today for an obligation free and confidential chat.

NEW YEAR RESOLUTIONS TO MAKE POSITIVE CHANGE

A new year has finally come! The hardships of the global pandemic are not yet over, but yay, we made it here! New year’s resolutions have always been the trend at the start of the new year. Unlike any other year, our standard resolutions list for 2021 may need a little shake-up.A famous quote says, “We are shaped by our thoughts; we become what we think. When the mind is pure, joy follows like a shadow that never leaves.” Having control of your mind and the way you think, helps the way you process the world and those around you, and will bring wholeness back to your life. We’ve been through a lot over the past year so it is more important than ever to take a step back, take a deep breath and prioritise self-care. Here are a few steps to help you take care of your mental health this year.

Intentionally give thanks

Gratitude is a way of appreciating what others have done for you, as well as the things that you have, rather than focusing on what you don’t. Research shows that grateful thinking improves mood. When people are focused on the good, they are practicing benefit-focused reappraisal, most similar to the phrase of “finding the silver-lining”.
How do you cultivate gratitude on a regular basis? Here are some suggestions:

  • Do simple acts of kindness towards others no matter how small. Tip: List down small acts of kindness on separate pieces of paper (e.g. texting a family member or friend to wish them a nice day), fold and put in a fishbowl. Pick one daily to complete.
  • Say a genuine “thank you” to others, such as the waiter at your local café. This can inspire them to do the same for someone else. A simple thank-you note also works wonders.
  • Keep a gratitude journal or board. Have a visual space of the things you are grateful for. These could be in the form of photos, words, and objects of the people, things and experiences you’re grateful to have in your life.

Start a hobby that you enjoy
A hobby is a great way to unwind from your daily routine during your spare time. Research shows that four out of five Australians find their hobby helps reduce stress and feelings of loneliness and isolation, and improves their mental wellbeing in the long term. This is why hobbies have played an important part during the COVID-19 lockdowns.

Get moving often
Being active can boost your feel-good endorphins and distract you from daily worries, therefore, it reduces stress. A recent research suggests that short bursts of activities may still have health benefits, as long as it adds up to 30 minutes a day total. It’s now time to find an activity you enjoy – it could be a regular walk with your dog, reading or gardening – and make it part of your regular routine.

Stop yo-yo dieting
Many people often avoid fully participating in life while waiting for their ideal body. People who are dissatisfied with their body image typically avoid social activities, physical intimacy and getting active. This may often lead to depression, anxiety, and other mental health problems.
This is why weight loss is one of the most popular New Year’s resolutions, and there is no shortage of diet plans and gimmicks on the market. While there are some that are good, restrictive dieting typically leads to long-term weight gain and therefore can fail from the start.
So, rather than beating yourself up about how you look, start the change by accepting, caring and loving yourself, regardless of your body size and shape. The way we view our body and how we feel towards it, can have significant impacts on our mental and physical health. Having an active appreciation of our bodies can lead to healthier lifestyle changes, overall better mood and greater life satisfaction.

Reduce screen time for more sleep time
As we enter the era where we can do almost anything using our devices, the prevalence of mental health issues has increased. A survey result from the Australian Bureau of Statistics (ABS) showed that one in five (20.1%) of Australians reported a mental or behavioural condition in 2017-2018. It has been known that screen time is linked to poor sleep quality, as well as depression and various mental health problems. This is why the recommended leisure screen time is no more than 2 hours per day. There are certain cells in the eye that process ambient light that signals directly to the brain to regulate consciousness, sleep and alertness. So, exposure to artificial light before bedtime causes disruption in our internal clocks that affects our sleeping habits. Sleep deprivation affects your psychological state and mental health.
These small steps for our self-care can make long lasting change in our lives.
The year is still young, so it’s not too late to commit to your resolutions. Set yourself up for success by getting prepared, and once you start, keep on going even if you miss a couple of goals here and there. If wellbeing is your priority this year, you may also like to check our home wellbeing guide for more self-care strategies.
Whatever your goals and resolutions for this coming year are, we wish that you have a healthy and happy 2021.

WHY YOU NEED A MORTGAGE BROKER

The role of a mortgage broker is to guide you through the home loan journey and help you choose the right product or feature for you.Our role is to work closely with a panel of lenders — from the big banks, to the smaller lenders you may not be as familiar with — to ‘shop’ the home loan market for you. But our job isn’t just about comparing home loans. We stay on top of market trends and changing lender requirements, so you can be confident in the recommendations we provide’.


Even before you are ready to buy a home, we can offer valuable support by explaining the home buying process and working with you to ensure you achieve your property goals.

How does a mortgage broker save you money?
Some people choose to stick with the bank they already have accounts with — but they could be missing out on a competitive home loan option elsewhere.
Brokers have up to date knowledge of the home loan market — different types of lenders, new loan options, the conditions attached to a low-rate loan, and more. This just means your mortgage broker can find competitive deals that are right for your needs, present you with the options, and help you avoid more expensive or unsuitable loans.

How does a mortgage broker help me secure loan approval?
As a home loan expert, your mortgage broker knows what it takes to get your home loan application over the line with the right lender. 
They’ll explain any steps you may need to take to tidy up your finances before applying for a loan and identify any possible red flags that could work against you. They’ve helped many others and know what to look for — chances are, they could find something you may have missed.


What do I need to prepare when meeting with a broker?
It’s never too early to start planning for your first or next home. If you’re at the very beginning of your home buying journey, just bring along a list of the questions you’d like to ask.
If you’re closer to buying a place of your own, it’s a good idea to gather banks statements, payslips and other necessary documents that will give your mortgage broker a better idea of where you stand financially. After reviewing your documents, your mortgage broker will also be able to explain any steps you could take to help your home loan application get the thumbs up with the right lender. 


With the support of your broker, you’ll be well-placed to understand more about how buying a home works, and what you can do to start making your property goals a reality.
Call us for a chat today.


If you’re looking to buy your first home, purchase your next one, invest in property or refinance your current home loan just let us know. We would love helping you achieve your home ownership, so please get in touch.