Summer / Autumn 2008 Newsletter

NEWS FROM Awarded to Mortgage

Choic

MORTGAGE CHOICE
e by A
ustra
lian B
ankin
g and
Finan
ce Magaz in e

Wishing you peace, happiness

and prosperity for 2008.
As we begin the new year, Mortgage
Choice would like to say a special thank
you to all our clients, friends, family and
business partners for your support
during 2007.
It’s also time to look ahead to the
promise and opportunities of the
upcoming year.
With 2007 being a year filled with
multiple interest rate rises, it’s important
Invest today for a better tomorrow
to be aware of your current financial It’s the start of a bright, bold and can afford mortgage repayments,
situation to ensure that you are prepared
for the year ahead and will achieve the happy new year - and perched at factoring in interest rates, taxes, and
financial goals that you aspire to. the top of your New Year’s clarifying whether it is likely to affect
Resolutions list is your goal of any social security payments or benefits.
becoming a property investor. Determine your strategy.
But where do you begin? There There are many ways to invest and you
are many aspects to consider. may not want to put away all your spare
Gary Mackertichian Anthony Smith Mark Boulton Chris Howitt
Ph: 9585 7779 Ph: 9585 7779 Ph: 03 9533 5340 Ph: 9333 4370
Fax: 8610 0365 Fax: 8610 0365 Fax: 03 8611 7915 Fax: 9333 4376
Mob: 0418 155 565 Mob: 0413 439 761 Mob: 0403 047 147 Mob: 0401 334 599
Research, research, research. cash into superannuation, for example.
gary.mackertichian@ anthony.smith@ mark.boulton@ chris.howitt@
mortgagechoice.com.au mortgagechoice.
com.au
mortgagechoice.com.au mortgagechoice.com.au
Be sure to read as much as you can Work out your personal motivations.
about investing in property, including What are your personal goals in life?
industry magazines, property and/or What will ultimately bring you
investment columns, radio programs, satisfaction and contentment? What
Craig Micallef
Ph: 9308 9163
Jill O’Connor
Ph: 9585 7779
Mitch Jones
Ph: 03 9773 3438
Stephen Forrester
Ph: 03 9773 3438
TV shows and reputable property and your friends, family or peers want for
Fax: 9308 9257 Fax: 8610 0365 Fax: 8610 0365
Mob: 0417 655 577 Mob: 0412 647 506 Mob: 0412 881 907
Fax: 03 8610 0365
Mob: 0409 250 347 investment websites. You may also themselves does not necessarily apply
craig.micallef@ jill.oconnor@ mitch.jones@ stephen.forrester@
mortgagechoice.com.au mortgagechoice.com.au mortgagechoice.com.au mortgagechoice.com.au
like to consider attending seminars to you. Consider what you want to
Mortgage Choice Limited held by reputable organisations and
302 Charman Road CHELTENHAM VIC 3192 achieve financially over a period of
Phone 03 9585 7779 financial services businesses that are time – whether that’s a five year, ten
Fax 03 8610 0365 licensed in Australia. Be sure to add year, or twenty year period and so on.
www.mortgagechoice.com.au/cheltenham1 books written by licensed Australian
This franchise is independently owned and
It is also an idea to consider what your
operated by The Finassist Partnership
advisors to your list, too. comfort zone truly is, in regards to
ABN 51 426 348 068 Do your sums and seek advice. how long you want to invest the
Find out whether you can truly afford money for and when you ultimately
to make the investment. Consult with want to reap the rewards from your
your financial advisor and talk to your investment strategy.
accountant to determine whether you Continued on p2...

ENSURE PEACE OF MIND WITH YOUR NEW HOME PURCHASE

Did you know that up to 60 different areas of the law could make • Conducting extensive searches into the land title, development
the difference to the purchase of your property? plans, council zoning, and any restrictions and ownership
A solicitor or conveyancer will help you understand the legal interests on the property
obligations of the purchase of property and advise you on any • Ensuring the transfer of ownership to you stays on track and assist
modifications to the contract to ensure your needs are met. Even if with ensuring that both sides of the party fulfil their obligations
you believe it’s a standard contract it’s wise to discuss it in detail to
ensure you understand the commitment you are making and the If you are purchasing an apartment, your solicitor or conveyancer
meaning of the more technical terms that may be used. will also review the strata minutes, which will provide information
During the course of the purchase, the solicitor or conveyancer regarding noted building structural issues, the Body Corporate,
will assist you with: common area problems and any noted trouble with neighbours.

INSIDE • Living with your home loan • Lenders mortgage insurance • Tips and tricks to save a deposit
...continued from p1
Think about the type of investment
you are looking for, too.
Do you want what’s known as an
‘income’ investment (a type of
investment that gives you an income
from earning interest but generally
has little or no capital growth) or a
‘growth’ investment, which, as well as
earning you income, increases the
value of your original investment.
Living with your home loan
A mortgage brings the thrill of home balance. But you do need to be
Know your market.
ownership, but once the champagne disciplined about withdrawals.
Find out everything you can about stops flowing it’s essential that you
the area in which you intend to If your loan is truly testing your
can live comfortably with your
purchase. Are prices increasing, loan. Try our few simple steps to mettle, think about refinancing. It may
decreasing or stagnating? Are there get the most from life – and your be possible to find a loan that suits you
home loan. better. Karen and Peter Orr recently
any major infrastructure projects
refinanced, discovering their loan can be
planned in the area? What are the Life will be a lot easier if you only a useful financial tool. Karen explains,
average prices like? While weighing up borrow what you can comfortably repay “Refinancing gave us a better deal on our
the pros and cons behind your - even after allowing for possible rate rate, and it also meant we could tap into
decision, seek an independent hikes. If you can manage it, additional our home equity to access low-interest
evaluation that includes all recent repayments will fast track your way to funds to build a new swimming pool.”
comparable sales and rentals in the mortgage freedom.
If rising rates are making your
local area. Is the value of your Even small extra payments can have a mortgage a tough task master, it may be
property likely to increase over time? big impact. On a $250,000 mortgage, worth fixing, since this gives the
Seek an independent evaluation. paying just $50 more each month on a certainty of knowing what your
30 year mortgage could trim your total repayments will be. Anthony O’Brien
Secure your paperwork. principle and interest repayments by up did just that 12 months ago, and now
Get into the habit of keeping your to $51,379 (assumes interest of 8.25%). he’s thumbing his nose at rate hikes. “A
paperwork in good order – contracts, A redraw facility lets you tap into fixed rate hasn’t just meant savings on
policy documents and so on. Keep it in these additional repayments – a real interest,” explains Anthony. “It’s also
a file that is easily accessible – it will plus for meeting unexpected bills. allowed me to budget for mortgage
come in handy when you need to refer repayments. As a self-employed worker
Offset accounts are also worth with an irregular income, that’s
to any documents relating to your considering. Rather than being paid definitely helped me live with my loan.”
financial affairs as well as bringing you interest on your spare cash, any savings
peace of mind. are used to reduce (or ‘offset’) the Your home loan can also streamline
interest on your loan. It means more of debt management. Consolidating other
Don’t be pressured into signing
your regular repayments go towards debts, including credit cards, into your
anything you are not mortgage can make for easier money
whittling away the principal.
comfortable with. management, often reducing the total
Many mortgages, including line of monthly repayment you have to make.
Be careful not to let other people
credit loans, accept salary deposits,
pressure you into a decision you are letting you use your loan as a one-stop- Sticking to a disciplined repayment
not comfortable with – be prepared to shop. Cash can be redrawn when it’s schedule and controlling credit card
say no! Seek the assistance of a needed, while any surplus goes to spends can mean valuable savings in
solicitor before signing anything. And reducing the mortgage. This way every total interest. And that’s something we
steer clear of ‘get rich quick’ schemes cent is put to work paying off the can all live with!
or other promises to make you an
overnight millionaire.
See a reputable mortgage broker. Lender’s Mortgage Insurance
Choosing a property loan to suit your Have you started reading about it is generally required
lifestyle and financial circumstances is purchasing a home and come for borrowers who
paramount. This is where a reputable across the term Lenders’ Mortgage have less than a
mortgage broker can assist you. Insurance – but unsure about 20% deposit.
what exactly it means to you?
Mortgage Choice loan consultants can Lenders Mortgage
meet with you to discuss your loan Lenders’ Mortgage Insurance, or Insurance can
options and tailor a loan product for LMI, is a type of insurance taken out by sometimes be confused with Mortgage
your needs, from its panel of leading banks, building societies, credit unions Protection Insurance (MPI), which
lending institutions. A Mortgage and non-bank lenders, designed to covers you, the borrower, for the
protect the lenders in the event that the payment of your mortgage instalments
Choice loan consultant can assist you
borrower cannot meet their repayment in the event that you are affected by
with your property loan either at one obligations and the funds from selling unforeseen circumstances such as
of their offices during business hours the borrower’s assets don’t cover the unemployment, illness or death. This type
or they can make an appointment at a loan. LMI is generally a one-off payment of insurance is paid annually and varies
time that’s more convenient to you. made at the outset of a home loan and according to the outstanding loan balance.
Tips and tricks to save a deposit
Saving has rarely been easy for most people and Now, make building a deposit your key financial goal.
saving the deposit needed for a home can be difficult. This may mean sacrificing a few of life’s luxuries but your
But with planning, commitment and a few smart commitment will be amply rewarded. It’s often a good
strategies it’s possible to build a decent nest egg. strategy to save first and spend what’s left. Stay on top of
your savings target by asking your employer to pay part of
A vital first step is to establish a savings goal – usually
your pay cheque into a separate savings account – or
between 5% and 20% of your ideal property value. This
arrange a direct debit of your own.
gives you something concrete to work towards plus a
benchmark of your saving achievements to date, which most Once you have a firm idea of how much you can save,
lenders will want to see. Revisit your household budget for a shop around for a suitable investment vehicle. Some of the
clear picture of how much you can realistically tuck away on best short-term returns – as high as 7% annually - are
a regular basis. Adding lump sums like offered by online savings accounts. Websites like
your annual tax refund will turbo- www.infochoice.com.au offer comparison
charge your deposit. tables of a wide range of accounts.
It can be counter-productive to Be sure to read the fine print on any
build savings if you’re also carrying accounts though. Some offer tiered
high interest debts, so aim to reduce rates, only paying top interest on
outstanding credit card balances or balances over a certain limit. It’s
personal loans by repaying more than important to have every cent working for
the minimum. Lenders will enquire you, so look for a decent rate that applies
about existing debt commitments across the board. And keep an eye out for
when you apply for a home loan, regular account fees – these can quickly
and in addition to helping build a eat in to your savings pool.
deposit, reducing personal debt
demonstrates you have the discipline
Congratulations to the winner of the

WINNER
to manage a mortgage.
Spring / Summer 2007 Mortgage
Choice It’s Your Choice promotion.

Steven Caruana of Highgate Hill in

Singling out a great opportunity QLD has won $6,000.

Saving for a home loan is rarely Although no-deposit loans are Similarly, newer loans that split the
easy, but it can be harder still if becoming more common, lenders will loan with the mortgage provider might
you are going about it alone. But generally look for a minimum deposit also lower the deposit you need, along
every year many singles of 5 percent. This means setting a with reducing your repayments.
successfully purchase their first budget and savings goals and then
The key is setting a savings goal and
home - all it takes is a little sticking to them. Eliminating luxuries
making a commitment to those goals
knowledge and a lot of discipline. – even taking simple steps such as
by being disciplined in your approach
taking your own lunch to work - can
The rules for a homebuyer are the to savings to ensure those goals are
add up over a year and increase the
same for a single as a couple. But met, even if it means some sacrifices
size of your deposit.
despite their best efforts, salaries for for a period of time.
single people will generally be below Your chances of securing a loan can
the combined income of a couple, also be enhanced by bringing on a
resulting in a lower deposit. guarantor, such as a family member. It
is also increasingly common for a
This in turn may mean that you are
relative – or even a close friend - to
more likely to be asked to pay Lenders
become a co-owner of the property.
Mortgage Insurance, which protects
the lender should you default on the This gives you a chance to compete
loan repayments. As the sole person equally with couples. But it is important
responsible for the loan, you may also to have a clear plan, usually in the
be asked to demonstrate that you can form of a legal agreement, for when
make the repayments in the event that one of the partners in the loan wishes
you are incapacitated and enable to to sell out, or should one party become
earn an income for a period. unable to meet their commitments.
 Mortgage Choice Limited
302 Charman Road
CHELTENHAM VIC 3192
Win $6,000
Phone 03 9585 7779
Fax 03 8610 0365 towards..
www.mortgagechoice.com.au/cheltenham1
This franchise is independently owned
and operated by The Finassist Partnership
ABN 51 426 348 068

It’s your
According to Mortgage
Choice’s latest independent
choice!
Simply call 1800 110 170 to make an appointment with a Mortgage Choice
online survey, Australian Consultant and request to be entered into the draw.
consumer sentiment for 2008
is more positive than it was
You could save $1,000’s in 15 minutes, try us!
That’s all the time we need to show you how to get the real savings you want on your mortgage.
for 2007. 83% of respondents
were confident that our With a Free Mortgage Choice Home Loan Health Check, your local Mortgage Choice consultant can help you
find out if your current home loan is the most suitable one available or if there are other products out there that
economy will be strong next
better address your specific needs. With the backing of Australia’s leading mortgage broker - you’re in safe hands.
year, while interest rates
remain the biggest concern • Wide choice: We have many of Australia’s leading banks and lenders on our panel

for almost half (45%), • Professional home loan advice

followed by economic • Local knowledge: We’re Australia’s leading mortgage broker because we combine local knowledge with over
15 years experience
management at federal
government level (25%). Call now on 1800 110 170 or fill in your name and contact details below and
• Fax it to: (02) 9954 4913 or
Despite interest rate rises
in 2007, mortgage market • Mail it to: Reply Paid 74789, Mortgage Choice It’s Your Choice Promotion, McMahons Point NSW 2060

growth remains steady, NAME CONTACT NUMBER

demonstrating the ‘great
Australian dream’ of
ADDRESS POSTCODE
property ownership is
moving forward relatively
EMAIL ADDRESS PREFERRED CONTACT TIME
unabated - a trend that
looks to continue. THE “IT’S YOUR CHOICE” PROMOTION: Call 1800 110 170 to make an appointment with a Mortgage Choice consultant and once you’ve
attended that appointment you’ll automatically go in the draw to win $6,000. There will be 1 draw and the first valid entry will win. Winners will be
notified by telephone and confirmed by mail. The opening day of the competition is 30th January 2008. All entries must be received by Mortgage
Warren O’Rourke, Choice at the above address by 5pm Eastern Standard Time on 30th April 2008. The draw will be held at 4pm Eastern Standard Time for the first
National Manager draw on 1st May 2008 at the office of Mortgage Choice. The name of the winner will be published in The Australian on the 5th May 2008. *Complete
Terms and Conditions and the privacy notice are available from your local Mortgage Choice consultant or by logging onto the Mortgage Choice
Corporate Affairs, website at: www.mortgagechoice.com.au. Authorised under NSW Permit No, [LTPS/07/20443], A.C.T. Permit No. [TP 07/04901], VIC Permit No,
Mortgage Choice Ltd [07/5211], and S.A. Permit No. [T07/4965].

STATE OF THE MARKET

Melbourne has experienced extraordinary growth over the past months. The overall median house price in Melbourne
increased to $431,000, which is up by 13.1% over the year.
In the September quarter the greatest increase in median prices occurred in the middle band suburbs
where the median increased by 8.1% from $390,000 to $421,795. The greater increases in the
middle and outer suburbs indicate that buyers are looking for value outside the very
expensive inner suburbs.
Increases in the median values for other dwellings were much more uniform with
the inner suburbs increasing by 6.3% from $395,000 to $420,000, the middle
suburbs by 4.6% from $315,000 to $330,000 and the outer suburbs by 2.9% from
$240,000 to $247,000.
Written by Real Estate Institute of Australia for Mortgage Choice

Privacy: There will be occasions where we would like to send you valuable information directly related to property finance, as well as other related offers, tips and opportunities. However should you wish to
receive only certain types of information or nothing at all, please contact your local franchise principal. Disclaimer: The content of this newsletter is written expressly for education purposes and is based on
the opinions of the authors. The authors and agents for the authors are unable to accept any liability or responsibility whatsoever to any error or omission or any loss or damage of any kind sustained by a
person or entity arising from the use of this information. It is recommended that you seek professional advice relevant to your specific circumstances before acting on the information based in this document.