SAVINGS TIPS TO GROW YOUR DEPOSIT

Reception • September 22, 2021

TIPS AND HABITS TO GROW YOUR HOME LOAN DEPOSIT AND STRENGTHEN YOUR APPLICATION.

One of the first things that comes to mind when thinking of purchasing our first home is the deposit. Here are some tips and habits that can help you both grow your deposit and strengthen your home loan application when the time comes.

TIPS AND HABITS

Our spending habits have the power to super-charge us toward our home ownership goal, or sabotage it (you can read about how our spending habits affect loan applications here ). Below are some habits that can help boost your savings:




1. AUTOMATE


If you set an automatic transfer of your savings as soon as your pay arrives, you will hardly miss it! (But if you don’t, you might feel you can hardly live without it.)



2. BUDGET FOR FUN


Do you have an outing or special occasion coming up? You don’t have to say no, just set a realistic budget for yourself (and keep to it).



3. CELEBRATE


Breaking down your larger target into smaller milestones makes the task feel more manageable and provides opportunities to celebrate your progress! (This will also help you stay positively motivated to save when you have to say no to spending.)



4. DITCH THE DELIVERY SERVICE


Covid may have us splurging less on great Melbourne coffee, however food delivery services have boomed. Save by ordering direct from the store, or change it up by finding a great recipe online and giving that a go instead.

"Beware of little expenses. The smallest leak can sink a great ship"


Benjamin Franklin

5. EVALUATE SUBSCRIPTIONS


Regularly check and monitor what you’re using, and what you’re paying for. Don’t pay for what you don’t use (or keep what you feel you can do without).



6. FREE CASH


Used wisely, membership and credit cards that offer cash back can put noticeable money back in your pocket. Note, no rewards warrant over-spending, and it’s important to pay credit card balances monthly.



7. GET CONNECTED


Regularly connect with people who can help guide and motivate you toward your goal. Having a team in your corner can increase your chances of success.

"Find a group of people who challenged and inspire you, spend a lot of time with them, and it will changed your life forever"


Amy Pohler

8. HIDE YOUR SAVINGS


Consider a quality savings account that is completely separate from your regular bank accounts – potentially with a different financial institution.



9. INSPIRE YOURSELF


Know what makes you tick and tap into that as a way of keeping yourself inspired and motivated. This may be through a vision board, a goal tracker, regular affirmations, visiting the area you wish to purchase in, etc.



10. JUST GET STARTED!


Regardless of where you are, the best and most powerful way to achieve your goal is to start.

"Find a group of people who challenged and inspire you, spend a lot of time with them, and it will changed your life forever"


Amy Pohler

GETTING STARTED


HAVE A TARGET.


One of the fundamental steps to saving your deposit is to have a target. Things to consider when establishing your savings target include:


  • Your current financial position
  • Your borrowing power
  • How much you want to spend


Once you have identified your target, put it in writing along with your end goal – the more detailed and specific you can be, the better!1 If you’re not sure how to work out an appropriate target, we’re happy to help.

"You can't hit a target you cannot see, and you cannot see a target you don't have."


Amy Pohler

KNOW WHERE YOUR MONEY IS GOING.


If you’re not already intimately familiar with where your money goes on a regular basis, it’s time for a date with your bank statements. Reviewing your past spending is eye-opening, and the first step to helping you take control of where it goes in the future – an essential part of maintaining any savings plan.



HAVE A PLAN (AND STICK TO IT).


Once you’ve identified your target, your position and your spending habits (to date) you have what you need to make a plan – we could call this a budget – to make sure our expenses are met, and our savings can grow.

"If you think you're not ready, it's always good to reach out to have plan in a place. You will be suprised where you actually are. Plus you might get some tips to motivate you!"


Yvonne, Future Finance Group Mortgage Broker

Along the way things might not always go according to plan, don’t be disheartened. Always keep your eye on the prize and get back towards your savings path if you stray.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2021

6 Tips to Help Choose Between Selling or Renovating

By Kola Dev • September 2, 2024
Assessing the benefits of an extensive home renovation against selling your property is always a worthwhile exercise. Selling your home is rarely an easy decision. It will often hold family memories, and that makes it tough to leave. It’s also likely to be your most significant financial asset, and you want to be confident you can maximise its value. The process of selling isn’t cheap with commissions, legal fees and taxes. But the alternatives are to tolerate your home in its current condition or to talk to an architect or builder about giving your home a makeover. That’s not cheap, either. Costs can run into hundreds of thousands of dollars, and there’s never a guarantee the work will finish on time and budget. If you think selling is stressful, you should try a large-scale renovation! Regardless of which way you jump, it’s likely you’re going to need finance - whether that’s refinancing your current loan for a renovation or a new loan for a new property - so it’s worth talking to your mortgage broker to understand your options. Here are a few tips to help you think it through. 1. Structural issues Nothing dates a bathroom like colour. You can tell if it was built in the 70s and 80s merely by the colour scheme. Most bathrooms today are based on white, rather than old school creams or browns. If your bathroom can remember when David Cassidy was making hits, then the time to act is overdue as aging bathrooms usually also have waterproofing issues. 2. Money in the bank You can afford to decide whether you want to pour your hard-earned cash into your existing home, or climb the property ladder and find a superior property. Or if you’ve paid down a lot of your current home loan, you may be able to redraw to fund a renovation. 3. You intend to stick around If your home is well located, you may opt to stay and maximise the potential rather than move. However, if you favour a renovation, be aware that upgrades offer the best payback when you sell within a year or so of the work being completed. Your new kitchen doesn’t stay new forever although it is likely to give you a lifestyle benefit for at least a decade. 4. Big squeeze If your current home is getting too small, you’ve got the option of building an extension, but that means you’ll have to battle the planning process as well as the stress of selecting an architect and builders and perhaps paying rent while the work is being done. If the rebuild is so big that you need to move out anyway, a new home might be a more straightforward option here. 5. Living in the 70s Many owners who take the upgrade path want to modernise their homes. They’re fed up with the rabbit-warren design of small, disconnected rooms and yearn for open-plan living, plus a new kitchen and bathroom. Making such fundamental changes are expensive, and it is worth checking out the prices of more modern homes nearby before going ahead with a renovation. That will help you understand the value that you’re adding. 6. Dead space Poor design can result in some rooms being ignored, either because of their size or their position relative to the main living areas. Real estate is not cheap, so this is very wasteful. If fixing the problem is difficult, finding a new, better-designed property will pay off for you financially in the medium to long-term while also helping you take the next step on the property ladder. Give us a call on (03)8657 8664 to have a chat about the best way to fund your home improvements.

Tax Deductions for Investment Properties Explained

By Kola Dev • August 5, 2024
Owning an investment property is a little like running a business. It provides a great source of income and builds personal wealth but inevitably comes with a series of costs that hit your bottom line. The excellent news for property investors is that many of these expenses are tax-deductible. Tax advantages are not just available on new properties. While an older building may have limits on what you can claim, you do not have to buy a new house or apartment to qualify for tax benefits. There are two components of a tax claim for a rental property. These are: Capital Works Allowance covers the structure, such as walls and roof tiles; and Plant & Equipment covers the so-called removable assets such as carpets, stoves, and hot water system.  You should always obtain professional accounting and tax advice to understand exactly what can and cannot be claimed according to your own specific circumstances as the Australian Tax Office changes the rules regularly. For example, only investors of new property can make claims under plant and equipment assets. However, exclusions exist for those properties that have been renovated. Those who own older properties can continue to depreciate items that fall under the capital works component, so long as it was built after September 15, 1987. And you may benefit from depreciation even if a previous owner undertook improvements. So, working out what you can claim legitimately requires the eagle eye of a professional. In general, you will find the following items are tax-deductible: Costs associated with a property manager, which are usually 3-8% of rental income Accounting and professional financial advice Advertising if required to find new tenants, plus associated re-letting costs Strata levies Rates and land tax Insurances Loan interest and ongoing loan fees Also, work with your accountant or financial adviser to build a tax depreciation schedule for your property. This document will list all the items in your property that qualify for depreciation. It should only need to be completed once, and it can then be submitted to the ATO each year to ensure you obtain the maximum possible tax benefits from your rental property.

A Guide to Purchasing Your First Investment Property (and Beyond)

By Kola Dev • July 1, 2024
Investing in property isn’t rocket science but there are a few rules savvy investors should follow for success. Here are some things we’ll cover in the next couple of weeks to get you started. Should I invest? Investing isn’t right for every one.The first thing you need to do is make sure you’re in the right financial position to take the risk. How do I build a strategy? Before you start your journey you need to do plenty of research and build a strategy around your specific budget and financial needs. How do I choose the right loan? Once you get your finances in order, start shopping around for a great loan. Make sure you get pre-approval from your lender before you start looking for your investment property. How will I manage my investment? It’s important to remember that an investment property is a long term commitment and you need to know how you are going to manage it over the life of your loan. With the right advice and loan, property investment can be the most satisfying and profitable decision you make. If you have any questions or want to discuss whether property investment is right for you, contact us on (03)8657 8664 or email us at reception@futurefinancegroup.com.au
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