6 tips to prepare your property for valuation

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Looking to refinance your home loan? A valuation is a vital part of the process. So today we’ll look at some ways you can help get your home in tip-top shape.

When you refinance to try and get a better deal on your home loan, the lender you’re applying with will arrange a valuation to estimate what your property is worth.

However, a survey by an online lender recently found that one in seven homeowners were unsuccessful in refinancing their mortgage because the value of their property had fallen.

With that in mind, it’s important to tick off as many of the below tips as possible to not only make the whole process smoother, but to give yourself the best chance at a favourable valuation.

1. Spring clean!

Roll up those sleeves, get out the spray and wipe, and get ready to apply some elbow grease.

Ensuring you present a well-maintained property can make a big difference when your property is being valued.

Inside, you’ll want to make sure your kitchen and bathrooms are spotless, your floors are mopped/vacuumed, your windows have been cleaned, and the rooms aren’t cluttered.

Outside, mow the yard, weed the gardens, rake the leaves, clean the deck, and don’t leave any toys or sports equipment scattered around the yard.

2. Get your documentation in order

If you have a copy of your building plans, give them to the valuer – preferably in advance of the valuation to help speed up the process.

Valuers sometimes also request council rates notices and/or land tax valuations, so it doesn’t hurt to have all relevant paperwork compiled in a dossier in case the valuer requests it.

3. Be present

Your valuer will need to be able to easily access every room in the house – not to mention your house itself.

By being present, you can speed up the process and be on hand to both showcase your home and answer any questions, which leads us to our next tip…

4. Compile a list of your property’s features

Sure, you’re not ‘selling’ your house to the valuer. But it doesn’t hurt to highlight its features.

Therefore compile a list of everything your house has to offer – especially if it’s not immediately apparent.

Not only will this ensure the valuer doesn’t overlook anything, but you can also give them the list to keep afterwards.

Your list could include things such as a newly-installed reverse-cycle air conditioner, insulation, solar panels, new carpet, top-of-the-range pool filter, or details of any recent renovations and how much they cost.

5. What’s going on in your neighbourhood?

Your home’s features aren’t the only factors that can impact its value.

If there are any community plans slated for nearby – such as a new bike path or bus stop – have the information ready so you can let your valuer know.

Likewise, it doesn’t hurt to have the details of any recent sales figures for nearby properties on hand.

Do try and read the room though. Some valuers don’t like to be bothered too much, so if you start to get the feeling they want some space then definitely give it to them.

6. Secure your pets

Sure, we love our furry friends. And they may even be considered a member of the family in many households. But not everybody feels that way about them.

Therefore it’s best to err on the side of caution and either secure your dog and/or cat, or ask a friend to look after them for a few hours.

In doing so they won’t get in the way of the valuer while they’re doing their job, and the valuer won’t have to worry about accidentally letting them out of the house.

A few final notes

A valuation can take anywhere between 30 minutes and 2 hours – it depends on the size of your property and how thorough the valuer is.

After the inspection, it typically it takes 24 to 48 hours for the valuation report to be returned to the lender.

So with all that said, if you’re looking to refinance and want to find out a little more about what the process involves, then definitely get in touch. We’d love to help guide you through it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Frustrating bank habit triggers probe into home loan pricing

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You know that infuriating habit the big banks have of failing to pass on the RBA’s cash rate cuts in full? Well, it’s finally triggered the federal government to order an inquiry into home loan pricing.

The inquiry, which is being conducted by the Australian Competition and Consumer Commission (ACCC), comes just weeks after the Reserve Bank of Australia (RBA) slashed the official cash rate by 25 basis points for the third time this year to a record new low of 0.75%.

What really drew the ire of the public and politicians alike, however, was that the big banks only passed on between 0.13% and 0.15% (out of 0.25%) of the latest RBA cut to customers.

This is after they only passed on 0.40% to 0.44% (out of 0.50%) for the previous two RBA cuts.

How much is it costing you?

Treasurer Josh Frydenberg said if the big banks had passed on the recent rate cuts in full, a family with a $400,000 mortgage would be paying around $2,200 a year less in interest payments.

That compares to the $1,680 they’re saving from the 57 basis point rate cut that they are currently getting (on average), he added.

“In other words, families would be $519 better off if the banks had passed on the rate cut in full, not just a part of it,” Treasurer Frydenberg said.

So what will the ACCC probe?

The ACCC will investigate a wide range of issues – on top of why RBA cuts aren’t always passed on in full – including the rates paid by new customers versus existing customers (in other words: the ‘loyalty tax’).

In addition, the inquiry will consider what prevents more consumers from switching to cheaper home loans.

“We have evidence that customers can save considerable money by switching providers, and we want to fully understand what the barriers are that stand in their way, particularly barriers created by the banks,” ACCC Chair Rod Sims said.

“It is also very difficult for customers to find out what mortgage rate they could pay with another financial institution, without going through a lengthy and time-consuming application process.”

Mr Sims added the inquiry will aim to provide answers to the questions that banking customers have long asked.

“For example, there is an unusually large difference between the headline rate and the actual rates many customers are paying, which can be confusing for consumers,” he said.

The ACCC is expected to produce a preliminary report by the end of March 2020, with a final report due 30 September 2020.

Get in touch

All in all, the ACCC inquiry is aimed at increasing transparency when it comes to how banks price their home loans.

The good news for you is that you’re not alone. If you ever have a question about your home loan that you need clarity on, all you need to do is get in touch with us. We’d be more than happy to look into it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Has the tide turned? Household lending surges

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Lending to Aussie households spiked 3.9% in July, the strongest growth seen since October 2014, according to the Australian Bureau of Statistics (ABS).

The bumper month follows a 1.9% rise in June 2019, suggesting the tide has finally started to turn in the lending market.

“Whoa. Quite the surge in housing credit in July,” remarked CoreLogic’s head of research Tim Lawless, “haven’t seen numbers like this since 2015/16”.

Lending for investors rose 4.7% in July with rises across all states and territories, while lending to owner-occupiers also recorded substantial gains at 5.3%.

Meanwhile, home loans to first home buyers rose 1.3% in July. This is the fourth consecutive month of growth for this segment.

Why the surge?

The rise came the same month that the prudential regulator, APRA, eased loan serviceability standards.

Essentially, APRA stopped telling lenders to assess whether borrowers could afford their repayment obligations based on a minimum interest rate of 7%.

BIS Oxford Economics’ Maree Kilroy adds that investor sentiment also received a boost following the Coalition government’s federal election victory, and pointed to back-to-back rate cuts in June and July.

“After withdrawing from the market for several years, investors have reacted positively,” Kilroy says.

Lawless agrees that the surge is due to “two rate cuts, easier credit, sentiment boost post-election and removal of macro-prudential”.

And his colleague, Cameron Kusher, suggests this might only be the beginning.

“Importantly this is only to July. We could see these figures go much higher by the time we are right in the middle of spring,” Kusher says.

Get in touch

As Kusher suggests, this might just be the beginning of a lending surge.

Spring usually brings plenty of new properties onto the market – everything looks nicer in spring!

So if one of them happens to catch your eye, get in touch and we’ll be happy to guide you through the process of obtaining finance.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Got a spare pineapple? Pay off your mortgage faster

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Reckon you could scrounge together an extra $50 each week to pay off your mortgage? If so, latest modelling shows the average household with a $400,000 loan could save $46,992 and pay off their home loan four years faster.

This week we’re going to look at the benefits of paying just a little bit more off your mortgage each week.

Now, this is quite a timely subject because the RBA has just delivered back-to-back cash rate cuts, so even if your monthly repayment amount has been reduced, there’s a lot to be gained by sticking to the same amount you’ve been paying over the last few years.

Breaking it down

One of the biggest problems people run into when trying to pay off their mortgage faster is trying to do so in big, irregular lumps.

It helps a lot more if you break it down.

So instead of trying to pay an extra $150 to $300 extra each month, break it down to a weekly amount that you can actually commit to, like $20 to $50 a week (or $3 to $7 a day – basically one or two takeaway coffees).

Breaking it down into smaller figures also helps reinforce good habits, and can help with your family’s cashflow.

Below, we’ll look at some modelling conducted by AMP that shows the benefits of setting up a weekly direct debit that will automatically pay an extra $20 to $50 a week off your mortgage.

What an extra $20 (aka a lobster or mud crab) a week gets you

– $400,000 loan: save $21,281 in interest and pay it off 1 year and 9 months faster

What $50 (aka a pineapple) a week gets you

– $400,000 loan: save $46,992 in interest and pay it off 4 years faster

What $100 (aka a lime) a week gets you

– $400,000 loan: save $78,828 in interest and pay it off 6 years and 11 months faster

Check out the full list here, which covers loans of $300,000, $500,000 and $1 million. All the calculations assume that you’re five years into a 30-year average home loan.

Get in touch

If you want some more tips on paying off your mortgage sooner – or you want to discuss your refinancing options – then get in touch.

We’ve got plenty of ideas up our sleeve and always love sharing what we’ve learned with our clients.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Granny flat could boost your property value by 30%

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Backyard cricket pitch not getting much of a workout these days? Sick of your weekends being taken up with mowing and gardening? Installing a granny flat could be a lucrative solution – boosting the value of your home by 30% and adding around 27% to rental income.

That’s according to a combined analysis by CoreLogic and Archistar, which shows more than half a million east coast homeowners have enough free yard space to build a granny flat at least 60sqm in size.

Constructing a two bedroom granny flat would require an initial investment of up to $200,000, while the outlay for a one bedroom dwelling would be approximately $120,000. The full report is here.

The benefits of a granny flat

The report found that for a house worth $500,000, building a granny flat could add around $150,000 to the value of the property.

It also found that building a two bedroom self-contained granny flat apartment could add an additional 27% in rent each week.

CoreLogic head of research Tim Lawless says building a granny flat is becoming an increasingly compelling proposition for homeowners in a relatively lacklustre market.

“Many properties identified as suitable for a granny flat are in densely populated and traditionally expensive areas,” says Lawless.

Archistar co-founder Robert Coorey says many home-owners “are sitting on a pot of gold” in the form of excess land.

“The family benefits of a secondary residency can’t be overlooked, whether that’s giving adult children more privacy while they save for a mortgage, keeping loved ones close as they become more reliant on care or having additional accommodation for overseas visitors,” Coorey says.

How to assess your property’s granny flat potential

Got a big backyard and want to see what you can do with it?

Granny flats can’t be built just anywhere. The property must have appropriate town planning rules, the land area needs to be large enough, and the existing property must be located in a position that allows for the development.

As it happens, Archistar has developed a platform that can help you view in 3D the potential to add a granny flat on your property.

“Archistar’s platform helps home-owners by instantly assessing thousands of zoning and planning laws and producing a report, so it’s worth taking this step and consulting a local planning expert before you proceed,” says Coorey.

Last but not least – finance!

If you’re interested in ripping up the backyard cricket pitch and adding a granny flat to your property, feel free to get in touch.

As discussed, granny flats require an initial investment of $120,000 to $200,000. So if you’d like to run through your financing options, you know where to find us!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.