Author: Viking Property

Saving a deposit for a home is one of the hardest goals any young family/couple can strive for. You can forgo many of life’s luxuries to achieve the financial goal however with rising home prices, you may feel like you’re hunting an elusive target. So what can you do?

You’ve probably seen advertising for a No Deposit Mortgage, maybe from banks or from property developers or even builders. Do these schemes work or are they too good to be true?

I recently had a long and illuminating conversation with my mortgage broker friend to find out if there is any truth to the rumours; I know you’ll be excited to hear what I learned…

According to my friend the mortgage broker, from the bank’s perspective, there are two ways you can get a No Deposit Mortgage. The first way is to use a guarantor and the second way is to borrow the amount of the deposit as a personal loan. There are several conditions for each method so let’s look at each method in more detail:

Using a guarantor to get a No Deposit Mortgage has many advantages, particularly for first home buyers. You need to be able to show the bank that you have the capacity to repay the loan, which is usually achievable for most new home buyers, however the catch is finding a qualified guarantor. The guarantor needs to be someone who owns residential property with enough available equity to cover the amount needed for the deposit. How much this needs to be will depend on how much you plan to borrow from the bank.

For example, if you needed $50k for your deposit, the bank will need the guarantor’s property to have $50k of equity available to take as security. It’s also important to know that the bank only needs to secure the amount to cover the deposit, not for the total value of the guarantors property. As you make repayments and the value of your home increases, you can request the bank release the guarantor from their obligations to the loan and this will leave you in control of your future.

So, who do you ask to be your guarantor for your No Deposit Mortgage? The only requirements for the bank are that guarantor have the required amount of available equity to cover the deposit and that they are willing to take responsibility for the repayment of the loan in the event that you cannot keep up with the repayments. Most people ask parents or extended family members or possibly a close family friend.

An insider tip that my mortgage broker told me is that it’s best to get the new home loan from the same back as the guarantor’s loan. This is because any paperwork needed from the guarantor’s lender will be handled internally by the bank rather than having to get time-sensitive documents from another bank.

If you decide to borrow the deposit as a personal loan, you will need to work with a broker to determine what repayments you can afford for your new mortgage and the personal loan combined. Your broker will be able to organise both loans and make sure everything runs smoothly.

The personal loan will be paid to the bank in the same way as a saved deposit would be and the loan repayments can be coordinated so they are paid at the same time. Because you are taking out the personal loan for the deposit, this may reduce your overall borrowing capacity, however it will give you the opportunity to buy a home and get into the market.

Just a warning about deposit rebates offered by builders or developers. My broker friend has warned me to avoid offers of a no deposit mortgage or a deposit rebate or similar offer from home builders and property developers. In all cases, these rebated must be declared to the bank, otherwise you are at risk of committing financial fraud. The bank requires a full disclosure of your financial situation and often these rebates are not disclosed. When they are, usually the property valuer will discount these rebates off the purchase so there will be no benefit to you. I recommend avoiding these arrangements regardless of the assurances you might be given by a developer or builder.

So here are two safe and reliable ways to get a No Deposit Mortgage and start realising your dream of a new home. Each have their benefits and challenges so make sure you go through the details of your financial situation carefully before you make the final decision. We’re happy to discuss this further with you and provide you with a referral to an experienced mortgage broker to get you started.

Call us today on 0427 526 348.

A new home and land package is a popular way to build your new home because most house hunters, whether they are young couples, growing families or empty-nesters, usually have a total budget in mind and prefer to know the combined price of their home and land from the outset.

Brand new house and land packages typically include a home site (land) and a new home plan ready to build. That means there’s generally two contracts, not one, as some buyers assume, because they are purchasing from two separate entities. The land is purchased from the land owner which can be a private person or a land developer, and the home is purchased from a builder.

Standard inclusions in a new home usually include a fully-fitted kitchen and bathrooms, windows and doors, built-in robes, electrical points, TV and phone points, fans, stairs and tiles. At Viking Property, we ensure that the builders we deal with also include carpets and tiling throughout, stone kitchen bench tops and stainless-steel appliances.

Some builders differ from the level we provide, so you should be careful of comparing home and land packages from different builders. Always find out exactly what is – and what isn’t – part of the deal. Things like driveways, landscaping and fencing are generally considered ‘extras’ and come at an additional cost, however we include these with all our standard packages.

Costs such as stamp duty on the land and registration fees are not included in a new home and land package price.

As with all property purchases, buyers need a legal representative to liaise with the developer and the builder, to ensure council and regulatory requirements are met.

Once you own the land, you are responsible for maintaining it, which includes keeping it clear from rubbish, debris, excessive or overgrown weeds and other materials. Generally, this isn’t an issue as you’ll be wanting to commence construction as soon as possible after purchasing the land.

Then there are connections, like power, water, gas and internet. We will make sure that all of these are available on site before presenting you with your completed new home and land package. However, homeowners are responsible for contacting utility providers, such as electricity and telephone providers, to set up their home account and arrange connection. We’ll make sure you’ll have all the correct paperwork to get this done.

So while there is a lot to take in here, Viking Property is perfect partner to make this process smooth and easy. In fact, we’re so confident about how effective and hassle-free our process is, we guarantee that you’ll save thousands of dollars and months of your life by using our free service.

Let us help you make the right choice; call us today on 0427 526 348 so we can start to help you put together your ideal new home and land package in Brisbane.

Home and land packages are a great way to build your new home because most people usually have a total budget in mind and prefer to know the combined price of their home and land from the outset … but what if you don’t know what your budget is?

Almost everyone has to borrow some money to purchase a new home, so don’t be concerned about this. And with plenty of first time home buyer loan options out there the choice of which one will work for you can be daunting. Before you even start looking at options though, the first thing you need to understand is how the bank will assess your application for finance, whether you apply directly or via a broker.

In order to decide whether or not to provide you with a loan, lenders will generally assess you against the following criteria:

Can you repay the loan?

The lender will assess your employment history and salary to evaluate whether you have enough cash coming in reliably to pay the loan over time.

How much deposit do you have?

Assessing your ability to put down a percentage of the value of the property being purchased up front is standard. The percentage varies, though most lenders will require at least 10% deposit.

What is the valuation of the property?

Since the property is used as collateral if you are unable to repay the loan, the lender will order an independent valuation of the property. Based on the report, the lender will decide whether the property is worth the loan being approved.

How strong is your financial history?

Your credit history, expenses and debts will help the lender assess your reliability as a borrower and whether you are worth the risk.

How do I check my credit history? We’re glad you asked!

If you manage to tick all of the lender’s boxes, and you have enough to buy the home that you want in a location that suits you family’s needs, congratulations! You can move forward with the next steps.

But if not, what can you do?

The challenges usually fall into two areas; not enough income to service the repayments or not enough deposit. The income situation is down to you; unfortunately, we cannot help there. However if it’s the deposit that’s the issue, we have a few options that you can explore.

Low deposit home loans

Some lenders will offer loans if you have saved less than the usual 10 per cent deposit, being able to show a record of good saving habits will aid in getting your loan approved.

Saving more money for the deposit

Not very exciting however it doesn’t have to be a bore. Remember why you want to build a new home; for your growing family, for the feeling of stability and peace of mind. Use this as motivation to tighten your belt for a few months and hit that goal.

No deposit mortgage or no deposit home loans

I’ll tread carefully with this one as I realise that family relationships can be interesting. Most lenders will consider low deposit home loans if parents of the purchaser are willing to guarantee the loan and repayments. Proper research and professional advice are essential here, as there are several legal issues your parents/guarantors will need to be aware of should you not be able to repay the loan for any reason.

With so many things to consider, getting professional help is highly recommended. There are many mortgage experts in the industry and it’s in your best interests to use them; going it alone can prove costly. It’s easy to avoid nasty surprises down the track by getting the right people to do the appropriate checks for you from the beginning.

At Viking, we’ve spent years building relationships with mortgage brokers in Brisbane and have a network of some great brokers that we can refer you to for a confidential chat about your financial situation where you can learn what your borrowing capacity is and how to get a pre-approval.

As a new home buyer it’s natural that you might be looking for the best houses to buy in the most affordable suburbs in Brisbane, and it’s probably become obvious that which suburb you choose to live in will have a large influence how much you pay for your home. The suburbs that appeal to you will largely be a matter of personal choice, however a truly desirable neighbourhood will have a few common factors that put them in high demand. We’ve narrowed these factors down to access to education, transport, shopping centres, employment and lifestyle amenities.

Education

If you have kids (or are planning to), schools will probably be high on your list of priorities for where you want to live. If you have specific state schools that you are looking for obviously it makes sense to target their catchment areas. With private schools, location is more of a convenience factor as they are not bound by catchment areas. If you’re planning on living in the area for some time it might also be worth considering proximity to TAFE colleges and universities for down the line as the kids get older.

Transport

The key factor for transport is to look for a suburb that is situated close main road access and that has more than one point of entry/exit. If you drive to your job each day, you don’t want to be spending half an hour just getting to the freeway. Also, proximity to train stations and bus routes is important as this is how most people get to work. If interstate/international travel is part of your career, then being close to the airport would be a good plan.

In addition to this, as long as school catchments will allow it, you’ll probably want to live fairly close to where you work, so it can be a good idea to be strategic about where you choose to target for your new home and land package.

Shopping Centres

Ideally, you will likely also want to be close to convenience centres and a major shopping centre – something that has everything you need for general shopping and for the weekly groceries. Also consider proximity to entertainment venues like clubs and restaurants, depending on what interests you have.

Lifestyle Amenities

Lifestyle amenities are a becoming more popular in the current market. With new homes having smaller yards, more and more people are choosing to ‘out-source’ their recreation spaces. Consider things like large community green spaces with landscaping and play areas for small children, perhaps a dog park and some walking tracks and bicycle paths. Also look for sports facilities like golf clubs and sports fields if these activities are important to your recreation time.

Being aware of all these elements will help you to make the right assessment rather than concentrating on just one or two of these and unconsciously ignoring the others.

At Viking, we’re constantly reviewing different suburbs and locations so we can make sure that all these elements are considered when discussing a new home and land package. Call us today on 0427 526 348 to find out how we can help you choose the best location for your new home.

When to comes to building a new home, there are many moving parts and possibly hundreds of thing to consider from the needs of your growing family to the style of the home you want and the all important budget.

In my experience working with possibly hundreds of home buyers over the last 12 years; there are Three Big Questions you need to consider that will give you a solid context moving forward with building your new home….

1. Where do you want to live?
2. How are you going to finance you new home?
3. What is your timeframe?

All three of these questions will feed back into each other as you work through and discuss them with partners, family members etc. For instance, you may want to live in a great suburb close to certain schools however your budget may not be quite what you need to do this, so you look at other locations that will fit the budget in areas that you still like. It’s always a strategic trade-off however I personally believe that the suburb/location is the most important part of these three.

Location is what gives you the life-style you are looking for: proximity to amenities such as Schools, Transport, Shops, Motorways, Parks, Walking/Bike tracks, Dog Parks etc. These are the components of urban living that we all value and want at our doorstep.

On the finance side of things, this is a journey all in itself… Do you have to sell your existing home before you can move forward with your new home? Can you afford to take the equity out of your existing home loan, build the new home and then sell the old one? Can I get a straight answer from the Bank? Many years ago I used to be a Mortgage Broker so I have an understanding of how complex (and stressful) this can be. And it’s your money, so anxiety is almost guaranteed!! The best advice I can give you here is only work with someone you trust; Banker or Broker. We have a few great quality brokers we can refer you to for this however I recommend you speak with a few and ‘go with your gut’.

With timeframe, the most important issue here is transparency. Builders will tell you it takes 14-16 weeks to build a home however that is not the full story. It will take 30-45 days to complete the purchase of the land, then AFTER you own the land, you may sign a building contract. This will take another 4-6 weeks through Certification before it is lodged with Council – for another 4-6 week until your building application is approved. Some builders can get onsite within 2 weeks of receiving the building approval and then the “14-16 weeks” starts…. not to mention possible rain delays, public holidays and larger shut-down periods like Easter and Christmas. I tell my clients that from when you sign the land contact until you move into your new home will be approximately 9-12 months. This can be reduced by up to a month or so when everyone gets organised however this is a realistic timeframe.

I hope this information has been helpful for your consideration of building your new home. Feel free to reply to this email with any questions you may have or to discuss your specific situation in more detail.

I look forward to hearing from you soon!

Mortgages are funny things. When you get approval from the bank, you’re so happy and relieved that you often forget that your home loan needs a regular check-up.

Mortgages can seem complicated with everything from interest rate, term of the loan, repayment amount and frequency etc impacting on how much you pay.

In this blog post, we have simplified the process down to the three elements we believe will help you take control of your home loan, so you feel a bit more in charge of the process.

1. RE-NEGOTIATE WITH YOUR BANK EVERY SIX MONTHS

If you see your banks competitors offering a better rate – use this information as a negotiating tactic to get a better interest rate. I know you may feel uncomfortable asking for this however this so think about it this way – a .5% difference on a $400,000 loan is $2,000; how much overtime, extra work etc would you have to do to have $2,000 (after tax) in your hand…. Feeling a bit more comfortable asking the bank now??

It’s absolutely worthwhile ringing up your bank and pushing for a better rate. Use comparison websites to check whether your home loan rate is competitive and know what the competition is offering.

2. MAKE PAYMENTS MORE OFTEN

Most of us know this by now – it’s straightforward maths – switch your payment from monthly to fortnightly. This will have about the same impact on your budget as one monthly repayment, but because there are 52 weeks in a year, fortnightly repayments will result in 13 repayments a year instead of 12. You’ll be making an entire extra repayment every year without having to scrounge around for the extra money.

For example; if your mortgage was $200,000 over 30 years at 5% interest, making fortnightly repayments would save you $34,328 in interest and allow you to pay off the loan up to five years early.

3. USE A 100% OFFSET ACCOUNT

Most banks will offer to attach an offset account to your loan account – but make sure it’s a 100% offset account. An offset account means that any money sitting in this account will reduce the amount of interest you pay on your loan. Getting all your salary or wages paid into the offset account is the easiest way to maximise your offset accounts effectiveness.

BONUS TIP – SIMPLY INCREASE YOUR REPAYMENTS

Paying more than required is the simplest way to pay off your home faster. It’s also the most obvious and overlooked strategy. Just adding $50 per week can save up to four years on a typical loan.

I hope this information has been helpful for your consideration of building your new home. Feel free to reply to this email with any questions you may have or to discuss your specific situation in more detail.

I look forward to hearing from you soon!