Nurses and midwives now eligible for LMI waiver

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Nurses, midwives and other important healthcare professionals can now qualify for a lenders mortgage insurance (LMI) waiver policy. Here’s how it could save them thousands and fast-track their journey into home ownership.

Are you a nurse or a midwife? Or do you know someone who is?

There was a pretty big announcement recently that allows eligible nurses and midwives (who earn over $90,000 per annum) to buy a home with just a 10% deposit and avoid paying LMI with a Westpac home loan.

It’s an extension of the bank’s existing low deposit, no LMI home loan policy that’s also available to the following allied health professionals who meet the minimum income threshold:

– dentists
– general practitioners
– hospital-employed doctors
– optometrists
– pharmacists
– veterinary practitioners
– medical specialists
– audiologist
– chiropractors
– occupational therapists
– osteopaths
– physiotherapists
– podiatrists
– psychologists
– radiographers
– sonographers, and
– speech pathologists.

So why is this such a big deal?

For starters, there are around 450,000 registered nurses and midwives in Australia – so that’s a pretty big chunk of the population who might be eligible for this policy.

Not to mention that buying a home without a typical 20% deposit can be fairly costly due to having to fork out for LMI.

Essentially, LMI is an insurance policy that protects the bank against any loss they may incur if you’re unable to repay your loan.

And if you have less than a 20% deposit when applying for a home loan, a bank will often require you to pay for LMI because they see you as a higher risk.

So by getting an LMI waiver, you can save anywhere roughly between $8,000 and $30,000 in LMI, or shave years off your efforts to save the magical 20% deposit amount.

Not a healthcare professional? Other options are available

If you’re not a healthcare professional, you may still be able to get in on the action for a low deposit, no LMI home loan.

Other lenders have similar no LMI loans for lawyers and accountants.

There are also government schemes that allow eligible first-home buyers and single parents to borrow high loan-to-value ratios with no LMI.

The first home guarantee supports eligible first home buyers to purchase their first home with a small 5% deposit.

The family home guarantee helps eligible single parents buy a home with a deposit as low as 2%.

And the good news is there are other government incentives (such as stamp duty concessions) that may be combined with no LMI home guarantee schemes to stack up the savings (subject to eligibility).

Find out more

If you’d like to find out more about a no LMI home loan, give us a call today.

We can walk you through available LMI waiver options to help take the financial sting out of buying a home, and we’ll help you navigate the different price caps and application criteria.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

How to avoid becoming a victim of underquoting

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It’s the hope that kills you. Just ask Carlton fans, NSW Blues supporters, Wallabies sufferers, and hopeful homebuyers who have fallen victim to underquoting. Obviously, you can’t change your footy team, but you can follow these tips to avoid the sketchy real estate practice.

If it hasn’t happened to you, it’s probably happened to someone you know.

You find a dream home that appears within your budget, you get your finance pre-approved, you get your hopes up, and … you get blown out of the water come auction day because the agent has underquoted the property.

But hang in there – all is not lost, as we’ll touch upon below.

What is underquoting?

Underquoting is the misleading practice of advertising a property with a price guide that suggests to hopeful buyers that it could sell below market value, or for less than what the agent knows the vendor will accept.

Accusations of underquoting have been rife in recent times, as national property prices have soared 24% over the past year alone.

Now, there’s no doubt that some agents out there have been intentionally underquoting properties to drum up interest. But not always.

Real Estate Buyers Agents Association (REBAA) president Cate Bakos says on many occasions selling agents get blamed unfairly for their reluctance to predict a strong competitive result, and in many circumstances, vendors exercise their right to change their price expectations without prior consultation with their agent.

“Underquoting is amplified by a rising market,” adds Ms Bakos.

Which means as property prices peak in Sydney and Melbourne, and the rest of the country starts to follow a similar trend, less underquoting should occur.

Why do agents underquote a property?

The main reason vendors and agencies underquote, explains Ms Bakos, is based on the belief that an underquoted property will attract more prospective buyers.

It’s hoped that these buyers will fall in love with the property so much that they’ll find a way to compete against more cashed-up buyers, helping to push the property’s final price up in the process.

“The reality is that many buyers find themselves shortlisting properties that are beyond their financial constraints, and this can lead to disappointment, wasted expenditure for building reports and due diligence, and lost opportunity,” says Ms Bakos.

Isn’t underquoting illegal?

Ms Bakos said while price guide legislation varied between states and territories, the problem was relatively endemic in many cities across the nation.

She said while underquoting was illegal, there were still many legal loopholes that existed in current legislation, particularly in Victoria.

“In Victoria for instance, vendors are not required to state their reserve price for an auction until moments before the auction,” says Ms Baokes.

“And some offending agencies take advantage of this by pitching the property at a price lower than that of a reasonable price expectation or a realistically anticipated reserve.”

How to avoid becoming a victim of underquoting

Rather than rely on the price guide the real estate agent gives you, do your own homework.

You can do this by looking at comparable sales within the last month or two (on websites such as Domain and realestate.com.au), and compare like-for-like properties and locations.

“It’s an approximation, but it’s more helpful than living in the past and working off older, unreliable sales,” adds Ms Bakos.

Here are the REBAA’s other top tips to avoid becoming a victim of underquoting:

1. Compare comparable properties by location, land size and condition.

2. Spend the months leading up to active bidding time (while obtaining finance pre-approval) to inspect, inspect and inspect as many properties and neighbourhoods as you can.

3. Look at other similar properties in the area and see what the agent’s initially-published estimate price range was; what the reserve price was; and what it finally sold for.

4. Consider consulting and engaging a REBAA-accredited buyer’s agent to take care of the process so you can “buy with confidence.”

And last but not least, don’t forget to get in touch with us in advance to get your finance pre-approved.

That way, come crunch time, you can spend less time on your finance application, and more time doing your homework to make sure the properties you’ve got your heart set on haven’t been underquoted.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

What the!? Tesla came third on the new vehicles sold list?

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Car enthusiasts around the nation got a bit of a shock this week when the Tesla Model 3 rocketed up the sales leaderboard to place third for all new vehicles sold in March. How did that happen?

You might have seen an article by us a few weeks back about the sales of electric vehicles (EVs) almost tripling in the past year – from 6,900 in 2020 to 20,665 in 2021.

Great growth for sure, but when you consider that 101,233 vehicles were sold across the country in March alone, you wouldn’t expect any one EV model to threaten the big players such as Toyota, Mazda or Mitsubishi anytime soon.

Well, we got quite a shock when we looked at the Federal Chamber of Automotive Industries’ (FCAI) March sales figures leaderboard and saw that the Tesla Model 3 had rocketed up to third place.

Apparently more had sold than the Mazda CX-5 (fifth place), the Mitsubishi Triton (fourth), and were outsold only by the Toyota HiLux (first) and Toyota RAV4 (second).

But all is not what it appears

Turns out that Tesla’s third placing is accompanied by an asterisk.

FCAI chief executive Tony Weber explains that this is the first month that EV brands Tesla and Polestar have been included in monthly sales figure reports.

And as such, “when interpreting the data for March 2022, care should be taken as the Tesla data represents the company sales for the first three months of 2022”.

Still, that’s a fairly promising sign for EV enthusiasts out there – just three months of sales put them in a podium position with 4417 vehicles sold.

It wasn’t the only bit of promising news for EV fans this week, either.

Hyundai’s release of 109 electric SUVs – the Ioniq 5 – sold out in less than 7 minutes. In fact, 18,000 Australians registered their interest.

Meanwhile, Honda and General Motors have announced that they’ll be teaming up to build EVs that will sell for less than US$30,000 – potentially removing the all-important cost barrier.

Interested in buying an EV?

Did you know some lenders are offering lower rates on electric vehicles?

Macquarie, for example, recently sent out an email promoting comparison rates on electric cars to homeowners from 2.99% per annum (based on a loan of $30,000 and a term of five years).

That’s down from anywhere between 6.48% and 7.15% for a new internal combustion engine vehicle (depending on the loan-to-value ratio).

And as EVs become more popular in Australia, it’s a safe bet that we’ll see more and more lenders get their elbows out to offer competitive rates in this space.

So if you’re considering making the jump to an EV, get in touch and we can help you crunch the numbers on whether an electric vehicle loan is the right fit for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

Why are houses becoming so much more expensive to build?

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Construction costs just rose at the fastest annual pace since 2005. So why is it getting so expensive to build your own home? Today we’ll look at the materials that are becoming more expensive and why all homeowners should take note – not just renovators and builders.

“Your grandpa built this place with his own two hands”, or so your dad used to boast.

So if Pop could do it with his trusty hammer, some nails, and a bit of hard yakka, why is it so expensive to build a home of your own these days? (Your own handiwork inadequacies aside…)

Well, for starters, national construction costs increased 7.3% in the 2021 calendar year alone, which was the highest annual growth rate since March 2005.

And the not-so-great news is that property market data company CoreLogic is expecting growth in residential construction costs to remain above average over the coming quarter as supply chain disruptions persist.

“There is a significant amount of residential construction work in the pipeline that has been approved but not yet completed,” explains CoreLogic research director Tim Lawless.

So what materials are getting more expensive and harder to source?

Data shows that cost increases are being driven primarily by timber (mostly structural timber).

In fact, in the final quarter of 2021, the value of select wood imports reached their highest level on record, says Housing Industry Association (HIA) economist Thomas Devitt.

“Timber is predominantly produced domestically but excess demand, such as in a boom year like 2022, is largely sourced from overseas markets,” says Mr Devitt.

Other segments of the market also remain volatile, with increasing pressure currently on metal costs.

“With some materials such as timber and metal products reportedly remaining in short supply, there is the possibility some residential projects will be delayed or run over budget,” adds Mr Lawless.

And with building approvals for detached housing recording their strongest year on record in 2021 (with 150,000 approvals), demand isn’t expected to slow down anytime soon.

“This boom is set to keep builders busy this year and into 2023,” adds Mr Devitt.

Mr Lawless says: “With such a large rise in construction costs over the year, we could see this translating into more expensive new homes and bigger renovation costs, ultimately placing additional upwards pressure on inflation.”

Why current homeowners should also take note

Higher construction costs are likely to add to affordability challenges in the established housing market, making it harder for homeowners to upgrade.

And CoreLogic Head of Insurance Solutions Matthew Walker warns that higher building costs mean homeowners and property investors should also review their insurance cover.

“In these times of rapidly rising home and construction costs, under insurance can quickly become a real threat to what is a most valuable asset,” says Mr Walker.

“It’s important that homeowners keep track of their sum insured and annually check that it is sufficient should the worst occur by using their insurer’s rebuild calculator or giving them a call.”

How to get the right kind of finance for a construction project

Finding the right kind of finance for a construction project can be tricky at the best of times – let alone when building supplies are becoming more expensive and wait times are blowing out due to supply constraints.

That’s why it’s important to team up with a professional like us when looking for a construction loan.

Not only can we help you secure a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies.

So if you’d like to explore your options for your next building or reno project, then get in touch today – we’d love to help you map out a plan for your 2022 building and property goals.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.

Netflix and too chill: house hunters cutting corners on inspections

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More than half of Australian house hunters spend the same amount of time inspecting a property as they do watching an episode on Netflix, according to new research.

We get it. You see a house you like and you immediately want to buy it, warts and all.

But take a breath, as FOMO can be costly – with a third of recent purchasers admitting to “buyers regret”.

Not doing your due diligence on a property can also have implications when applying for finance if the lender’s valuation doesn’t come in at what you expected.

And it turns out that a lot of house hunters are leaping before they look right now.

A recent survey of 1,000 property owners by lender ME revealed that 55% of house hunters spent less than 60 minutes checking out the property they eventually purchased, despite it being one of the biggest purchases of their lifetime.

That’s about the length of a standard 55 minute Netflix episode.

The impact of COVID-19

Turns out we haven’t just become better at bingeing during COVID-19.

COVID-19 has also reduced the time buyers have to check out properties.

But it’s not always the purchaser’s fault.

About two-thirds (65%) of recent buyers said “real estate restrictions impacted their ability to inspect and purchase their property”.

And surprisingly, almost half (45%) of buyers restricted by lockdowns admitted to doorknocking vendors to ask for an inspection on the sly, as well as looking at photos and/or videos of the property.

Hidden issues

The lack of inspection time led to around 61% of Australian home buyers discovering issues with their property after moving in.

Around 40% of this group said they missed picking up the issues because they “lacked the skill or experience in inspecting the property”, while 33% simply “fell in love with the property and overlooked them”, and 18% were “impatient and concerned by rising prices”.

Overall, the top post-purchase problems included construction quality (32%), paintwork (28%), gardens and fences (23%), fittings and chattels (21%) and neighbours (17%).

Among owners who identified issues:

– 34% experienced a degree of “buyers regret” following the purchase.
– 58% would have paid less for the property had they discovered the problems earlier.
– 84% spent money fixing, replacing or improving the issues identified, or have plans to do so.

The moral of the story? Emotions are always involved when purchasing a home, which can cloud your judgement.

“Give weight to any niggling hunches that give you cause for concern and get a professional property inspector to do the looking for you,” says ME General Manager John Powell.

“It is also important to know your borrowing capacity in advance so you can buy your home with full confidence knowing you’ve got solid financial backing.”

Get in touch to find out your borrowing capacity

As mentioned above, it’s important to know your borrowing capacity before you start house hunting so you don’t stretch yourself beyond your limits.

So if you’d like to find out what you can borrow – get in touch today. We’d be more than happy to sit down with you, take a breath, and help you work it all out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or 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.