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22.01.2022 Thinking of constructing a home? Here Are Some Helpful Hints For Deciphering The Facts Behind The Advertising You may have decided that building a home is a great idea for you, and you’re eager to look around to see what builders are out there and what special offers they have. Exciting! But time and time again I see advertising for new homes being presented with a bit of trickery! With a bit more research and digging, you may find that these offers are not always as good a...s they seem. Some of the most common ones are: *1* Companies that advertise the cost of a new home as a suspiciously cheap weekly expense. - Chances are this is referring to the cost of the house only but you’ll need the land as well! The total cost could be more than double what is advertised. - Chances are this cost is for a basic build product and doesn’t include finishing touches such as flooring, painting, driveways/fences, landscaping etc. In fact, many building contracts I have seen have not included these items as standard and they need to be added on or sought by external contractors. - The cost can significantly increase once you select a more appropriate suburb and/or a more attractive house. *2* Companies that advertise no deposit required. Most likely this refers to no requirement to pay a deposit to the builder directly when signing a building contract NOT that you don’t need a cash deposit at all to obtain the mortgage! With regards to obtaining a mortgage, these are the options: - Saving a sufficient amount of cash or receiving a large cash gift from family - Some non-conforming lenders will accept little to no deposit very high rates and substantial fees applicable - Family guarantor support in which case you need no deposit at all. If your builder says that none of these will need to apply - find out some more info! *3* Companies that offer large grants, commonly to first home buyers. In most cases, unlike the government’s first home owner’s grant, what you receive is not a cash grant instead you receive the ‘grant’ in the form of free inclusions or upgrades on your property. Who knows if this means they have increased the price on other aspects to compensate? Clearly not all builders are guilty of this, and even if they are it doesn’t necessarily mean you shouldn’t go ahead if it means you could end up with the property of your dreams! This information is purely for the purpose of creating realistic expectations during your house-hunting journey :)
21.01.2022 Read on at www.flexibroker.blog/comparisonrates for a discussion on the following: 1. Comparison Rates Are Based On Loan Repayments That Will Probably Never Actually Apply To You 2. Comparison Rates Compare Fees Inaccurately 3. All Advertised Comparison Rates Are Not Always Readily Comparable... 4. Comparison Rates Ignore The Important Difference Between Lenders: Their Individual Propensity For Unexpected Rate Increases And here's a super quick calculation example derived from my latest blog post based on some current products on the market today, highlighting the misguidance of comparison rates: Assumptions for simplicity: - You are seeking a $500k loan to pay off over a standard 30 year loan term - You are comparing mortgage products that have no application fees, monthly fees, ongoing fees or other ongoing costs - You are a savvy mortgage customer who knows the importance of regularly reviewing your product to make sure you’re always getting the best deal so in this case you’ve decided to review your product every 3 years. Calculation based on 2 actual products currently offered on the market today: Bank A: 3.72% introductory variable rate (0.60 discount for the first 3 years), with an ongoing variable rate after that of currently 4.32% Bank B: no introductory rate, ongoing variable rate of currently 3.99% The comparison rate for Bank A is 4.18%. The comparison rate for Bank B is 3.99% Based on the comparison rates, you should choose Bank B, right? Wrong! Remember, you are a savvy mortgage customer who knows the importance of regularly reviewing your mortgage product! So did you notice that the comparison rate for Bank A has been skewed by the fact that the ongoing rate is much higher? This assumes you’re going to foolishly stick with the same product for the entire 30 year loan term! If all else is the same (i.e. if both banks have the same tendency towards rate fluctuations), don’t choose Bank B just because it has a lower comparison rate choose Bank A and then review your product again in 3 years time. By choosing Bank A you will save a minimum of $58 every month (based on our example of a $500k loan) saving thousands over those 3 years! After 3 years, variable rates across all lenders could have changed significantly. Refinancing is low cost these days and any cost is not significant enough to outweigh the possible savings. In fact, some lenders even offer ‘refinance rebates’ to encourage you to keep looking out for the best deals!
20.01.2022 A question I am often asked: Is it better to construct a new home, or buy established? The answer isn’t always simple as there are so many deciding factors that are dependent on your own unique situation. There are many helpful articles and discussions online to help you decide, but if you’re after a simple and straightforward list of factors to consider, then look no further than my latest blog post!
15.01.2022 Cash rate reduced again!
08.01.2022 There are still some common misconceptions out there and it’s time they be addressed :) Click to find out
04.01.2022 We've Increased Our Service Offerings!
