Tag Archives: finance broker

Property Finance – What’s Stopping YOU?

Is Property Finance a Problem for You?

Property investment is all about the numbers stacking up. Property financing an investment property is not always straightforward. The reality is lack of money should never stop you because a good property deal finds finance…

When it comes to real estate investing there sure is a lot to learn.  Real estate is not only about the market or strategy…it’s more about the deal, which means property finance.

Each and every property you are going to see must be the very best deal in context to your investment goals and profit margins, which means you have to do your homework. Due diligence makes your life easier, mitigates risks and property investments profitable…

How to effectively finance your property investments…

Getting the most effective finance for your investment properties is absolutely critical to building wealth through property. As a property investor,  you can spend a lot of hours researching the many different finance options available through many different lenders.

The result can provide you with the knowledge on how to structure your investments and lending criteria which enables continued growth of your property investments portfolio.

Understanding each lenders assessment criteria is extremely valuable in selecting the right lender each time you make a purchase.

It may surprise you just how different each lender assesses the scenario you present them. If it is outside their preferred lending guidelines, they may not be able to assist you with finance.

So you understand how to source property finance for yourself, right? If not you’ll want to make a big effort to educate yourself on the options available to know various strategies so an educated decision on the right finance solution can be made.

Do you need an assessment?

If you would like a review of your current finance setup or require finance for future purchases, we can provide you with an honest assessment on what you have in place now and make recommendations based on your objectives.

Property finance is the foundation which every property investor does and should know.

property finance
Property finance includes using effective property strategies for profits…

Property financing must be set-up right because it makes every deal possible with or without a deposit (unless a major industry change happens).

Do you understand the most effective multidisciplinary nature of property investment and property development including:

  • Property investment analysis
  • Property portfolio analysis
  • Property finance and taxation
  • Feasibility studies
  • Property strategies for profits

Do you know how to develop the analytical and decision making skills necessary for property investment and property development as a property investor?

1. What is your single biggest obstacle which is stopping you from profiting from property investments?

  • Lack of finance
  • Not enough time
  • Lack of education to raise finance from private investors (your network)
  • Lack of education
  • Unable to find deals in your area

2. What one additional skill would enable you to make more money from property investing?

  • Raising finance from the people you know (your network)
  • Knowledge so you can use one deposit to buy multiple properties
  • Knowledge to maximise your return on investment
  • Knowledge so you can invest in property renovations
  • Sourcing below market value deals

3. What property goals have you set yourself for 2014?

  • Buying your first investment property
  • Buying 5 investment properties in a year
  • Buying 10 investment properties in a year
  • Sacking your boss and being a full time property investor

4. How can we better help you learn skills you need to make money from property investment?

  • More online trainings
  • More books or reports
  • More CD sets
  • More events

Loan Analysis

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Property selection criteria…have you ever found yourself working harder and harder only to go backwards?

The principles for selecting investments properties include:

  • Property must be in an area of existing or potential high mid-to-long term capital growth
  • Property must be in an area of high population growth and high employment
  • Property must be close to schools, shops and transport etc
  • Property should be new or renovated to allow maximum depreciation and therefore biggest taxation savings
  • Property must be high quality in terms of design, materials and construction
  • Property requires minimal maintenance
  • Property must be in an area, which has a sound long term rental history

Check list with must ask questions for every property investor – how to of find an area to invest in and understanding specifics of individual property:

  1. What is the cashflow of the property?
  2. What is the vacancy rate of the area?
  3. What improvements are being planned for the area?
  4. What is the population growth?
  5. What is the competition?
  6. Is the property tenant friendly?
  7. What structural condition is the property in?
  8. Does property have furniture?
  9. Is there a body corporate?
  10. Is there a rental guarantee?
  11. What is the current property management arrangement?.
  12. Is there a leaseback?
  13. In the case of a new or off the plan property, who are the developers? This particularly in relation to companies like the ones you’re looking at
  14. Is there a dual purpose if this is a niche market ( purpose built ) property?
  15. What is the land availability in the area?
  16. What is the proximity of the area to a large city?
  17. What is the age of the property?
  18. Is the property at market value or under market value?
  19. Is the town you are considering based on just one industry?
  20. 20. Are you being commercial in your approach?

Want a clear and concise approach to creating profits, cash flow and equity through property investment?

Want a detailed roadmap with a step-by-step guide to property finance, buying property with no money down, instant equity and much more?

Want property investment financing solutions and strategies that work?

Property Finance

Crucial Questions to Ask Your Mortgage Broker

Home Loans, Property Investment Loans and Refinancing

 

A mortgage broker or finance broker negotiates with banks, credit unions and other credit providers on your behalf to arrange loans. A mortgage broker typically specialises in home loans, helping to select a loan, manage the whole process right through to settlement.

Mortgage broker for your individual circumstances, as they change it’s important to review your home loan to ensure it meets your needs. In context to home loans changing from time to time, its worthwhile to review what’s available and maybe changing lenders.

How to refinance your home loan?  The refinance process begins with a face-to-face interview to better understand your investment needs and objectives with a complete review of all existing loans in the market place to identify products which best suits your goals.

When a lender is chosen, application form is completed and supporting documentation is submitted to lender, next step is for approval to be granted as contracts are prepared and issued to you for signing.

mortgage broker
Mortgage broker for your individual circumstances, as they change it’s important to review your home loan to ensure it meets your needs. In context to home loans changing from time to time, its worthwhile to review what’s available and maybe changing lenders.

What happens at settlement? Lender pays out existing loan(s) based on your instructions…

Why do some investors choose to refinance?

Most people refinance for one of the following reasons:

  • Home renovation
  • Better rate than your existing loan provides
  • Need cash for investment property
  • Save money by offsetting interest earned on money available against interest charged on loan
  • Switch from a fixed rate to variable rate or vice versa
  • Consolidate debts into a home loan at a cheaper rate to make repayments more affordable

When deciding which mortgage broker to use there are a few questions you want to ask. Is mortgage broker a member of the MFAA?

(MFAA) Mortgage and Finance Association of Australia is the national body which represents Professional Credit Advisers, mortgage, finance brokers, mortgage managers and aggregators.

Membership requirements of MFAA, accredited mortgage consultant (AMC) has achieved certification with experience level and all members are obliged to comply with a strict code of practice. MFAA members must be part of an external dispute resolution service.

How many lenders does a mortgage broker represent on their panel? It is important a mortgage broker has a wide variety of lenders on their panel:

  • Banks
  • Credit Unions
  • Mortgage Managers
  • Non-conforming lenders

Some mortgage brokers represent twenty or thirty different lenders, which means you get a wider choice instead of only a few.

How does the mortgage broker get paid? Brokers are paid a commission on loans which they refer to lenders. Some lenders pay higher level of commissions than others so it’s important to understand how much your mortgage broker is paid.

Mortgage brokers are required to provide a quote and a credit proposal document detailing the amount they are paid as a percentage and as a dollar figure. Professional mortgage brokers are objective and offer a comparison of at least three to five different lenders.

Do mortgage brokers charge a fee? Most mortgage brokers don’t charge a fee as they are paid by lenders to introduce loan as described above, however recent regulation of credit industry means mortgage brokers charge a fee for service as financial planners do.

mortgage brokers
Mortgage brokers, not all charge upfront fees…

 

This involves an upfront fee, which varies from broker to broker, although some brokers do not charge an upfront fee.

How are loans and lenders compared? Under MFAA code of conduct and National Consumer Credit Protection Act, a mortgage broker must only recommend loans, which are “not unsuitable” to the client.

Mortgage brokers typically do an interview to determine needs of the borrower, then use software packages to compare and eliminate unsuitable loans. The broker details differences between shortlisted loans to allow borrower to select preferred product and provider.

Loans are generally compared using a comparison rate as this rate takes into account cost of fees and charges associated with each lender’s product, allowing consumers to quickly and easily compare…apples to apples.

What insurance does the mortgage broker use? MFAA membership requires accredited mortgage consultant professional indemnity insurance. This means in the event a client needs to take legal action, they’re insured.

How is your personal and credit information protected? You need to make sure your mortgage broker understands the importance of maintaining your privacy and ensures your information is held under lock and key.

All reasonable actions must be taken to protect your personal information. These are core to principals of the Privacy Act. Mortgage brokers must abide by Trade Practices Act, ASIC Act, Fair Trading Act and NCCP.

Mortgage Broker

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