Helping you find the right finance

Because your home loan will probably be your life’s biggest investment it is important that you obtain the best research and support when making this decision. 

Our role as your mortgage specialist is to provide you with a selection of finance options from our large range of lenders on our panel. Together we assist you with choosing the right loan for your personal circumstances. 

Whether you’re buying your first home, upgrading, refinancing, investing in property or wanting to pay off your existing home loan sooner, there are many options available and important considerations when choosing your loan. 

Strike Lenders will guide you through the process to ensure that all your needs and options are considered, and remove the personal stress and worry that comes with doing this by yourself. 

First home buyers

Because your home loan will probably be your life’s biggest investment it is important that you obtain the best research and support when making this decision. Together we assist you with choosing the right loan for your circumstances. Whilst there is much to consider and plenty to research, you firstly need to work out how much you can borrow. This is where the services at Strike Lenders will really help you. 

Budgeting and borrowing

If you are still living at home and have never rented before, when considering owning your home for the first time, there are many daily living expenses that are usually missed when doing your first home loan budget. 

When we work with you, we make sure you have an accurate and detailed budget that considers all expenses associated with purchasing a property (including stamp duty, council rates and other fees) and living expenses once you have moved in. We can help you identify these additional costs. 

Ask us for our budget planner if you do not already have one 

Considerations for buying your first home… 

  • Do you want a freestanding house, a townhouse or a unit? 
  • Do you want a renovated property or one requiring renovation? 
  • How many bedrooms do you need? 
  • If your budget allows, would you prefer a pool, second bathroom or extra garaging? 
  • What features are essential on day one, and what can come later? 

Decide your priorities and if necessary the personal activities and indulgences you are willing to trade off to save money. 

Location is important

A property in an attractive street in a popular suburb with easy access to transport, shops and schools is always a good investment. Consider the aspect of the property. North facing kitchens and outdoor areas are most popular. Does the property have a nice outlook? Is it appealing from the street? Does it have lots of natural light? Take into account whether it will be easy to sell if and when your needs change. 

Inspect the property at different times of the day to get an idea of how different factors, such as morning sun or peak hour traffic, affect its appeal. You should also think about how the property can grow with your lifestyle. By having a clear objective, these questions will be easier to answer. 

Research your area

Ensure you go to many property open inspections and do your research on the internet before making an offer to ensure you have a good indication on property prices in your desired location. If you find that you cannot afford to buy your dream home in your desired location consider adjacent suburbs that may be more affordable. 

Account for all costs after the purchase

A mortgage is a big commitment and you may have to make changes to your regular spending practices if you are to meet your repayments with ease. Many first home owners forget to budget for things they haven’t been used to paying for themselves like electricity, water and other utilities and items such as insurances. Budget for maintenance and even simple things like stocking up the fridge and pantry for the first time – many of the things we take for granted when living at home. 

Make sure you do not stretch yourself to your limit

You need to fully understand the impact of your regular spending levels on your new budget. Interest rates move constantly, so you will need to allow room in your budget for interest rate increases and other unforeseen additional spending. When interest rates drop, simply maintaining the same repayment is one of the fastest ways of paying off more of your loan and building a buffer if rates rise again. 

Consider options suited to your requirements

Think very carefully about the different loan product offerings available and how these relate to you and your spending habits. There are a number of products on the market and it is important that you find a product that best suits your needs. Consider options that may help you reduce the loan faster to avoid the very expensive costs associated with long term debt. This is where our guidance can be invaluable to you. 

If you are in trouble, ask for help

We understand that during the term of your loan, circumstances outside of your control can change, eg illness or losing your job, which could affect your ability to make loan repayments. In many cases we can negotiate a proactive solution if we are given the opportunity to work with your lender to ensure your best interests are taken into consideration. 

Be careful who you listen to

You will be given “expert advice” from many of your friends and family during this process. Make sure the advice is backed with evidence and feel free to share this feedback with us. Many people who have never even purchased a home or investment property will offer advice to you. 

Get excited!

Owning your own home is one of the most exciting things that you will experience in your lifetime. 

Property Investment 

Property has been considered a popular path to wealth for Australians for many years. Buying your own home is often the first significant investment you will make. Purchasing another property may well be the second – even before shares and other assets. 

Your first investment in property, however, need not be your home. Buying an investment property can be a good way to get your foot on the property ladder while you are renting or still living at home. It’s called ‘Rentvesting’. 

Many people feel locked out of the housing market as the areas they want to live become increasingly unaffordable. Rentvesting is an alternative way to get started. Rent where you want to live that suits your lifestyle, and purchase an investment property that fits your budget. 

Rentvesting therefore is a strategy that saves people from becoming renters their entire life. It gives struggling first home buyers an opportunity to enter the market, even if it’s not as their first home. 

Sensible investments in property have many attractions. Property can be less volatile than shares and it tends to be regarded as a safe haven when other assets are declining in value. 

Property has the potential to generate capital growth (an increase in the value of your asset) as well as rental income. There are also tax advantages associated with owning investment property. 

Buying real estate, whether you are buying the family home or an investment, is one of life’s most important financial decisions. However, when buying an investment property, it is wise to remember that you are making a business decision. You are not buying from the heart, but from the head. You are buying the property because you expect it to appreciate in value and give you a financial return. 

Assess your finances

When investing, it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long term objectives. For example, will the property be part of your retirement financial plan? 

Potential changes to your current situation should also be factored in, such as the birth of a child, the loss of one income or supporting parents in their later years. It is wise to seek advice from an investment adviser or qualified financial planner to help determine your financial goals and strategies. 

Why investing in property may be the answer

Australia currently faces a chronic housing shortage which, coupled with a rapidly expanding population (through natural increase and immigration), has pushed rental vacancy rates to historic lows and put upward pressure on rents. There are simply not enough houses to go around in certain parts of Australia. An investment plan is one that works towards building your wealth and securing your financial freedom. 

For some, the future may seem a long way off, but the time to act is always now, because the future waits for no one. The housing market is generally a seven to ten year cycle. There are always highs, lows and steady patches. The decisions you make today will determine the lifestyle choices you have in the future. 

The following factors should be taken into consideration when purchasing property as an investment: 

  • the likely return – yield and capital growth 
  • buying and selling costs 
  • cost to borrow money, ie interest rates 
  • how attractive the property will be for likely tenants or future buyers 

Do your homework

First you need to work out how much you can borrow. This is where our services will really help you. Make sure you have an accurate and detailed budget that takes into account all expenses associated with purchasing a property including stamp duty, council rates and other fees. Research the area’s average rental yields, historical price growth and future expectations. Talk to your local council about future infrastructure and additional planned services. 

Invest the time to fully understand the market – it could make a big difference to future investment returns. A mortgage is a big commitment and you may have to make changes to your regular spending practices if you are to meet your repayments with ease. Include water and council rates and items such as insurances and maintenance in your budget planning. 

Property management

Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is also up-to-date with changes to the Residential Tenancies Act and is better suited to negotiate with your tenant on your behalf should the need arise. They are also in a position to obtain credit checks on potential tenants and have access to tradespeople. If you prefer to stay one step removed and not deal personally with your tenants, then a property manager is definitely recommended. 

Plan ahead

Tenants come and go. Make sure your cash flow is sufficient to cover the mortgage and other outgoings when the property is empty. Don’t think that you always have to increase the rent either. Sometimes it is more cost effective to have the same long term tenant in your property than have weeks of vacancy trying to achieve a higher rental yield.

Every property will have compromises

Don’t miss a good opportunity because you are waiting for the ‘perfect’ house or apartment. If it sounds too good to be true, it probably is. Your selection criteria should include: 

  • Location: Is it close to schools, shops, day care and sporting facilities? 
  • Transport: Is it close to bus stops and train stations? 
  • Demographics: Consider population numbers, growth and density. 
  • Suitability to rent: Are the rooms big enough? Are there usable living spaces inside and outside and other features such as garaging and storage? 
  • Future potential: Can the property be renovated or developed? Are there any plans to develop surrounding properties, eg high density dwellings? 
  • Affordability: Stay within the second and third quartile of prices in the suburb for price and rent 

Finding your deposit

There is more than one way to finance your deposit. 

The good old… save a deposit! 

The most simple and straightforward method of making a property purchase is to save a deposit. 

Use the equity in your home/other property. 

For investors, however, one of the most popular ways to finance your first and subsequent properties is by accessing the equity in your home (or other property). 

If you are already repaying your own home or have an investment property, you may have enough equity to use as a deposit for your next property purchase. 

Investment Loans

Interest rates move constantly, so you will need to allow room in your budget for interest rate increases and other unforeseen additional spending. When interest rates drop, maintaining the same repayments with the savings going into your offset account is one of the fastest ways of paying off more of your loan and building a buffer if they rise again. 

Think very carefully about the different loan product offerings available and how these relate to your spending and saving habits. Consider options such as an offset account that will enable you to take advantage of using any excess cash to save on interest. It’s also a great account to use to save for your next investment property. 

Not only can Mobile Mortgage Solutions help first home buyers, but we can also help first time and experienced investors navigate the right path, structure and solutions to property investment. 

There are many ways you can finance your first investment property, however it does depend on a few things: 

  • If you are purchasing the property by yourself or with another person/others 
  • How long you plan to hold the property 
  • If you are going to live in the property at a later date 
  • If your parents are going to be involved in helping you with either your deposit or going as a guarantor are amongst a few. 

The most common and typical finance for investment properties is an interest only loan. However as the lending environment is constantly under review, especially for investors, the criteria to borrow investment funds are subject to change. 

Ideally, investment property loans should be interest only because an interest only investment loan is FULLY tax deductible. Interest only loans can be fixed or variable. It is usually the best cash flow solution when used with good capital growth. With an interest only loan your repayments are set to cover the interest component of your loan only, allowing you to keep your repayments on your investment property to a minimum. 

Generally, interest only loans are for a maximum five year term (depending on your lender) reverting to a principal and interest loan at the end of the agreed interest only term. However a further interest only period can be negotiated at this time. The interest on your investment loan is tax deductible, making this type of loan attractive to investors. 

As the lending landscape constantly changes, interest only loans are constantly under review and may not always be the best option for your personal circumstances. Use the skills and expertise in our office to avoid any misunderstandings and to maximise your investment lending. 

Buying through your SMSF

Did you know that you can use your self-managed superannuation fund (SMSF) to buy an investment property? You will need to consult your accountant or financial advisor with regards to: 

  • what you can and cannot do in a self-managed super fund (SMSF), 
  • benefits of using an SMSF to buy a property, 
  • challenges and pitfalls, 
  • using the correct trust structures, 
  • how to correctly source and set up the finance, and 
  • how to buy an investment property through a superannuation fund. 

Types of Loans

Variable loans

These loans are the most common type available. The variable rate loan offers more features and flexibility than the basic or “no frills” loan, so the rate is usually slightly higher. 

The extra options (for example a redraw facility, the option to split between fixed and variable, extra repayments and portability) should be taken into account when choosing your type of variable loan. 

Repayments will vary as interest rates fluctuate. 

Fixed rate loans

These loans are set at a fixed interest rate for a specified period (usually one to five years). The advantage of allowing you to organise your finances and repayments without the risk of rising interest rates is offset by the disadvantage of not benefiting from a drop in rates. 

At the end of the term all fixed loans automatically revert to the applicable variable rate. At this stage you have the option to lock in another fixed rate for a new term, switch to variable or go for a loan where you split with a percentage fixed and the remainder variable. 

Fixed rate loans typically have limited features and lack the flexibility of 100% variable loans. There may be early exit fees and limited ability to make extra payments. 

Split loans

These loans combine the features of various products and can have the security of a fixed rate loan and the benefits of a variable loan. 

They can also combine a standard term loan and a line of credit. For example part of the loan can be borrowed at a fixed interest rate with the remainder on a variable rate. 

These loans can be split into as many products as you want to reflect your personal circumstances. 

Interest only loans

Interest only loans involve you only paying the interest component on your loan for a specified period, and not the principal loan amount. Standard home loans typically include paying both the interest and a small amount of the principal loan in each repayment. 

Interest only loans were originally intended for investors. Loan repayments are reduced with the rental income paying or coming closer to paying the mortgage. This gives greater control over cash flow and potentially frees up funds for other investments. However, they are now becoming more popular with owner occupiers who want or need to reduce their mortgage repayments for a period of time. 

As the lending environment is always changing and legislation more rigorous, there have been changes across the Australian lending environment with the use of interest only loans. It is wise to chat with us before considering any type of interest only finance. 

Offset accounts

An offset account is a savings account attached to your loan account. Money in this account is offset against the loan amount thereby reducing interest payable. Significant savings are made by reducing compound interest with the use of these accounts. 

Other advantages of an offset account include being able to pay off your home loan faster than the repayment schedule demands and being able to redraw money if the need arises. 

Line of credit

These loans are a great way to access the equity in your home to use for things like home renovations, investments or other personal purchases. 

Repayments on a line of credit loan are determined by the interest rate applicable at that time. If you have sufficient equity in your home and your current loan structure doesn’t allow for withdrawing your equity, you will need to make a separate application for a line of credit loan. 

You have the added advantage of being able to make unlimited deposits/repayments as your repayments are not set. You must check the conditions of these loans as they are sometimes more expensive than standard products. 

Bridging loans

A bridging loan may be necessary to cover the financial gap when buying one property before the existing one is sold. This finance is generally secured against your property as you are utilising the equity in your existing property. Usually bridging loans are short term and more expensive than other types of loans. 

Reverse mortgages

A reverse mortgage loan is a loan for people 65 years and over against the equity or asset value in their home, holiday home or investment property. 

This equity can be taken out in a lump sum, through regular ongoing payments or a combination of both. Interest is added and no repayments are necessary. 

The principal loan amount is not required to be paid back until the borrowers either pass away or leave the home. Legal advice is recommended prior to considering this type of finance. 

Development, construction and renovation loans

Mobile Mortgage Solutions can assist with structuring financing solutions for commercial and industrial development, residential property development and renovations. We can organise construction and development finance to provide creative and strategic alternatives to traditional development finance to maximise the return on your investment. If you’re building a new home or planning major renovations to your existing home, a construction loan is generally the most appropriate funding option. The difference between a construction loan and other types of loans is that a construction loan is drawn down in stages and not paid as a lump sum. The draw downs enable the builder of a home to finance the various stages of the construction process from the acquisition of land to the various stages of building. 

Non-conforming Loans

These loans help those clients who have had issues with finances, mainly due to unexpected changes in circumstances, eg temporary unemployment or short term inability to pay debts. Mobile Mortgage Solutions can identify the lenders who can match your personal circumstances. The value of your property and your capacity to repay will determine a non-conforming loan, however these loans can attract a higher than normal interest rate. 

SMSF loans

Did you know you can take control of your retirement by using your superannuation to borrow money and invest in property of your choice? 

Our expert team of finance, planning and accountancy professionals will walk you through the entire process hand in hand. We can even provide a list of suitable investment property specialists to take the guesswork away. 

Things you may not know: 

  • You can combine your superannuation with other family members to allow you to buy property within the fund. 
  • Property owned by the super fund sold at the right time may have zero capital gains tax applied. 
    Self-managed super funds are the fastest growing segment in the market – for one main reason – control! 
    Don’t confuse your SMSF with personal investment. They are separate entities. 
  • Not everyone is suited to an SMSF 
  • A balance of approximately $150,000 is often a benchmark for a minimum balance. 
  • You will need to complete an annual tax return for the fund. 
  • Costs on set up for the Bare Trust or Instalment Trust can vary greatly depending on who you use. 

Self employed

Working for yourself instead of a company or business is not always easy. Self-employed people may have irregular incomes and find it difficult to make time to organise their paperwork. 

The banks’ strict lending criteria make applying and securing a self-employed loan time consuming and overwhelming. 

Mobile Mortgage Solutions can help discuss your situation and offer you a range of borrowing options best suited to your needs. 

Personal loans

A personal loan might be right for you if you want to fund the purchase of a car, boat, holiday or if you want to consolidate debt. 

Personal loans may come with lower interest rates than credit cards, so funding a big expense or project with a personal loan could save you thousands of dollars on interest payments. 

Debt consolidation

Debt consolidation is a process where all of your debts are rolled together into a single loan. Debt from personal loans and credit cards can be incorporated into your mortgage at a much better interest rate as home loans tend to have lower interest rates than other forms of credit. Consolidation will reduce your interest rate overall, and in this way save you money. Consolidation of your debt into your existing mortgage is most effective for larger amounts of money and should reduce the amount of your monthly payment. It also has the advantage of only having to make one payment per month. 

Deposit bonds

A deposit bond is a guarantee to the vendor by an insurance company that they will receive their 10% deposit even if the purchaser defaults on the contract of sale. You, the purchaser, are able to prove this guarantee to the vendor by paying a small premium to the insurance company. 

All purchase funds are paid at settlement. In the ordinary course of events, settlement takes place, the purchase price is paid in full and the deposit bond simply lapses.