Q: How does a guarantor home loan work? We have a 10% deposit which needs to include costs for stamp duty, expenses, etc. This is not quite enough and we are interested in the guarantor option.
A: Hi Bill, with a 10% deposit you are on your way (unless there is a specific reason you want to use a guarantor?)
There are several banks (cba, Mebank, ...) that will do a 92% plus mortgage insurance loan. Your 10% will cover stamp duty plus deposit and leave some money in your pocket.
Q: I have a personal car loan and interest free store cards, shall we consolidate with our home loan? Or continue to pay all separately?
A: Paul, I agree with Peita. Be careful of rolling a 5 year loan into a 30 year loan. Better to set up a new split for those loans and make the extra payments to pay them off quickly. In fact, that is a great strategy to avoid personal loan/carloans moving forward. Have an amount (perhaps $50k) in a separate split that you aim to pay off over a 5 year period or so. It acts as emergency funds, savings account for a car or investing etc.
Q: Do you think that the federal government will abolish the tax concessions that encourage negative gearing? If so, under which conditions or scenarios do you think they would do so?
A: Lewis, in line with what Rebecca and Nicole wrote, the impact it will have makes it unlikely I believe.
In fact, the whole housing market in Australia is build on (and relies on) investors. The extend of that reliance became obvious to me when I came to Australia from Europe. The whole housing market operates completely different without the influence of investors. Free market operations and self regulation is part and parcel of our model with little government interference.
It would be a monumental shift... I can't see a strong case for the change.
(And there is of course the investment properties our politicians hold personally to consider.....)
Q: What's the outlook of the Sydney property market in 2016?
A: Michael, I am afraid that is too broad a question to answer.... Waterfront units in a well developed area without new development in the pipeline will perform completely different than a house and land package in the outer suburbs.
Personally I refer my clients to a property research house. The depth of knowledge they have is really well received by my clients. I hope that is helpful?
Q: They say changing lenders is easy and you should look for a better price and service - but how often should I do this?
A: Jimmy, it is relatively easy these days to change, yes. However, this does not necessarily mean you should change the loan or lender.
Reviewing your financial situation on an annual basis is a good idea but not just for a better rate. I recommend to consider the following:
1) is the product (and specifically its features) and the structure/set up still in line with your goals?
2) are there any lender policy changes that have impacted you negatively or will impact you positively if you change?
Q: I'm currently exposed on the stock market, of which 60% is equity and 40% is a margin loan. Is 5.2% a reasonable rate or are there better rates out there?
I am not sure if this an option for you but I'll let you know anyway. Best finance rates are on property. If you can use equity in a property you will get a better rate than as a margin loan. Having said that, this is not to be taken as financial advice. There may be other factors in your circumstances that dictate a different course of action. Cheers,
Q: How can I look at a broad range of home loans to work out which is best for me? I really want to compare more than just the interest rate ?
A: Rob, really glad you are looking beyond just rate. Important other aspects to consider are set up (offset or var plus redraw or line of credit). Should you fix a portion of your loan/what would be the purpose of fixing, what are your plans with the property in 5 years time and what are your personal plans for the next 5 years. You work this into the mortgage plan/ setup. Hope that helps.
Q: we have a loan approved but I am a little nervous about the repayments - is there a way in which I can get reassurance that we can afford the loan?
A: Yes. Get a cashflow analysis done to see what money is coming in and how much is going out.
Q: I'm looking at getting some advice around whether i should get a fixed or variable home loan, especially with the decline in real estate of late. Will that effect me?
A: A fixed rate loan (at this stage in the rate cycle) is to protect yourself from rising interest rates. If you are close to your borrowing capacity or if a rate rise will seriously effect your casflow then yes, I wou