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Have you ever actually seen it?

For many borrowers, it can be quite a surprise to learn that a few blotches have appeared over the years on their credit history report.

Unfortunately, many are blissfully unaware until they apply for a home loan. Once your application has been lodged, it can be tricky to challenge your credit report and prove your worth to the lenders.

Don’t let this happen to you. Enrol in boot-camp today and get your credit record in shape – and the good news? You won’t need to squeeze into the Lycra and start counting calories.

1) Review your credit record

The first step is to get your hands on a copy of your credit history report.

This can usually be done through your mortgage broker, or by directly contacting a Credit Reporting Body.

There are quite a few companies who can provide your credit report to you, but the national bodies are: Veda, D&B, and Experian.

2) Challenge any discrepancies or misunderstandings

If you think that there’s a discrepancy on your credit history report, you can challenge these.

The first step is usually to contact the company who added the incorrect information to your report, and see if they can amend it.

Failing this, you can dispute the discrepancy through a Credit Reporting Body.

3) Be honest

It pays to be upfront with your lender about anything on your credit report that could impact your ability to borrow.

Most lenders are fairly strict, but some will take into account your explanation credit issues, and the steps you took to resolve them.

4) Cut down debt and credit

Before you apply for a loan, try to reduce the amount of credit card debt – and also available credit that you have.

Some borrowers are surprised to learn that a credit card with no debt owing at all – but with a high limit, can have an impact when being assessed for a loan.

Try to reduce your limits wherever possible, or if you don’t really use the card then consider cancelling it.

5) Know your finances

Come to the first meeting with your lender or broker, prepared to explain your budget, expenses, income and your capacity to repay the loan.

It’s also important that you can demonstrate savings, as most lenders will require at least 5% of the purchase price in order to approve a loan. When it comes to the deposit, the more you can pay upfront, the greater your chances of being approved for a loan.

If you can put down 20%, you will remove the need for Lenders Mortgage Insurance (LMI) which could represent significant savings for you.

Many borrowers I work with don’t have a clear picture of the upfront costs they may be up for when taking out a home loan.

As well as loan application fees, there are settlement fees, stamp duty, mortgage insurance and more.

Some of these can be added to the loan amount, but sometimes doing this can push you into a higher mortgage insurance bracket, resulting in even more fees!

Knowing your fees is the first step, knowing how to manage them is the next.

Have a look at my quick guide to knowing your costs: https://www.mortgageaustralia.com.au/email/files/borrowingcosts.pdf

Investing in property is something that most of us think about doing, want to do or hope to do. However approximately only 20% of Australians actually do it.

Why is this still the case when we know:

our superannuation payout is only likely to pay out our mortgage on retirement,
our savings won’t be enough to live on in retirement, we will have to severely reduce our lifestyle AND more than likely require some form of government assistance,
we need to get ahead financially now, not later, and
property prices are very unlikely to be any cheaper in 10 years time?
Is it because:

we don’t know how to take the first step,
we are too scared to make a decision in case we get it wrong,
we don’t think we can afford it (although we’ve never investigated it with our mortgage broker to see if we can),
our friends and family tell us it’s a bad idea (and they would know because…?),
I’m only renting, so how on earth can I afford an investment property,
…or is it that we are STILL waiting for the right time?

Whatever the reason may be, there is more than one way to get started on the investment property ladder.

Read about a few of these options with my quick guide – “Save, Equity or Super?”

https://www.mortgageaustralia.com.au/email/files/savesuperequity.pdf

Use our New Financial Year Resolutions planner to set some goals for the new financial year.

https://www.mortgageaustralia.com.au/email/files/newfinancialyearresolutions.pdf

So, you’ve decided it’s time to sell your property. Perhaps your family has grown and everyone needs some space. Or maybe the kids have left the nest and you’re ready for less maintenance and more travel.

You want to get the maximum price for your property with minimum fuss. But how much work should you do to prepare your home for sale?

If you like to watch a lot of DIY shows, you might have always dreamed of doing your own renovation rescue, and raking in the profits. But how much is too much to spend? Does it really mean a better selling price if you invest your life savings in a new kitchen?

Before you run down to the hardware store, let’s look at the pros and cons…

Pro – Your property will appeal to people who don’t want to renovate – such as families and professional couples.

Con – Your property will not appeal to buyers looking for a project of their own, and you could alienate these potential buyers.

Pro – You will add value to the property and take advantage of the profits, rather than leaving someone else to reap the rewards.

Con – The whole thing could backfire and you could spend loads on renovating without making much on the sale of the property.

Pro – Renovating could give you a competitive edge when there are similar properties for sale in the area.

Con – Buyers might not love your purple feature walls as much as you thought they would, and your taste could drive them away.

Pro – It might be just plain necessary to do some work before you can sell your property, depending on the condition.

Con – Renovating can be a real pain in the proverbial – are you ready for mess, stress and lots of aching muscles?

So how do you decide? There’s no simple answer here, I’m sorry to disappoint you! If the pros and cons have your head spinning, try speaking with a few real estate agents. They should be able to give you an idea of what work should be done to achieve the price you want.

It’s been more than 25 years since Tom Hanks and Shelley Long showed us the calamitous side of renovating gone wrong in the comedy movie, The Money Pit, but the warnings ring loud and clear today.

With a sluggish property market, many home owners are opting to renovate rather than relocate. Before you hit the hardware store and strap on the tool belt, here are my top tips to renovate your way to reward, instead of ruin.

1. Renovate or rejuvenate?

You don’t have to tear down walls or add a new storey to add value to your home. If you need extra space, you will probably have to renovate.

But there are plenty of ways to add value without making drastic structural changes: paint a new colour scheme inside and out; clean up and replant an overgrown garden; replace floor coverings or sand and revarnish existing timber floors; spruce up old windows with some modern shutters; or create some extra storage with built-in wardrobes.

2. Know what you can and can’t do yourself.

Not the DIY type? Face defeat early and call in experts to tackle the job. It may be difficult to part with money for something you feel you can do yourself, but if you botch the job, you will pay more in the long run. There are some jobs even skilled DIYers should not tackle for safety reasons, including electrical work, asbestos removal and roofing.

3. Target your market.

If you are buying a property specifically to renovate for profit or tarting up your existing home for sale, consider the likely buyers for the neighbourhood. Remember you’re not renovating for your own lifestyle and tastes, so keep colour palettes neutral and avoid fittings that are overly artistic or unusual.

4. Take a peek at the competition.

Visit some of the fully renovated houses in your area that are up for sale to see what the market is prepared to pay and what buyers are looking for. It will give you a good handle on which features help differentiate one property over another and current values.

5. Don’t overcapitalise.

It remains the golden rule of renovating and is particularly poignant in the current market. Cost every aspect of your project and be realistic about the value it will add, especially if you are planning on staying in the property for only a couple of years or less.

If you plan on living there for more than five years, you have a little more leeway to recoup the value of your renovation at sale time.

However, it’s still wise to keep at least a 20% margin between what you spend and the current value in case you have to sell sooner than expected.

6. Don’t start what you can’t finish.

If you don’t have the money to undertake your project, don’t start. Some renovators kick off their project with an aim to saving up along the way. If your savings fall short you may be left with an unsightly, unfinished project, which will curtail your capacity to sell if needed.

Chances are you will also lose interest in taking on future projects, so make sure you have all the money you need upfront.

Did you also know that ONLY 20% of Australians invest in property?

Coincidence you think? I’d say not.

You could probably afford an investment property for less than the repayments on a small car. So rather than upgrading your car as soon as it is paid off, consider building wealth for your future.

Have a look at this short article for more details – https://www.mortgageaustralia.com.au/email/files/areyoudrivingyourinvestmentproperty.pdf

Finances are often left on the backburner as you focus on the emotional health of you and your family.

It may also be that this is the first time you have had the sole responsibility for your finances, are overwhelmed and don?t know where to start.

The key is to take action early. Click here for some steps to get back on track financially after a separation or divorce.

https://www.mortgageaustralia.com.au/email/files/startingover.pdf