The Sydney property market has certainly lost its steam over the last six months , values are starting to slide and various market economist report a potential 10 % drop in value . As a first home buyer these reports should be ringing as opportunities to take advantage of .

Lending criteria have made it difficult for investors to secure funding and this has had an impact with prices . With less property investors in the market to complete against and less foreign buyers ( i . e Chinese ) to bid against , there is no better time for you to jump into the property market and take advantage of good opportunities .

One thing I love most about my profession as a mortgage broker is assisting my clients in achieving their financial dreams . I know that for many of you , buying your first home may be the biggest financial

By JERONE BALAGTAS

Mortgage Broker

decision and commitment you ever make .

However , for some First Home Buyers , the whispers and stories they hear about buying a property prevents them from taking any further action , so they stay living at home , or continue to rent , rather than buying their own . The purpose of this article is to dispel some of the “ stories ” we hear from those of you who are new to the property game .

Let ’ s take a look at some of the frequently asked questions from first time purchasers : NEED TO PAY OFF ALL MY OTHER EXPENSES BEFORE I CAN APPLY FOR A HOME LOAN

Not true ! You can still secure a home loan if you have an existing student study debt , or a car loan . When a lender is assessing your ability to service a loan , they certainly look at your current expenses such as any outstanding loans or credit card limits , but just because you might have one or both of these expenses , does not mean you won ’ t

get your loan approved . Lenders look at your whole financial situation – your income , your expenses and other debts , the valuation of the property you are wishing to buy , and the percentage of that value you are hoping to borrow from them – before they determine your suitability to pay off the loan . THE PARENTAL GUARANTEE SCHEME NO LONGER EXISTS

False . Security Guarantees are still an option for first home buyers , but not with all lending institutions in Australia .

A lender ’ s Security Guarantee is essentially a parent or family member acting as a guarantor to your mortgage , giving you the extra financial support needed to maximise your chances of meeting the requirements of the bank .

The parental guarantee scheme can give you a head start by making it easier for you to get into your home with help from others , and can be used to buy a home or invest . NEED A 20 % DEPOSIT TO BUY YOUR FIRST HOME

Whilst this true in some cases , the size of the deposit you need to put down is actually dependent on various factors , including : what you are looking to buy , where you

are purchasing , your current income and expenses , and which lender and product suite you choose to go with .

There are loads of lenders out there who will lend up to 90 % of the purchase price , or even 95 %. However , if you borrow over 80 % of the total price of the property , you may be required to take out Lender ’ s Mortgage Insurance , or your interest rate might be slightly higher . IT ’ S CHEAPER TO RENT

There are many variables to this equation - such as where you buy , where you are renting , and which loan option you choose to go with .

I really can ’ t dispel this myth in a short article as there is a lot to take into consideration : rental price , bills , purchase price , stamp duty and other transaction costs , the expected mortgage interest rate , how much it costs to run and renovate the property , expected capital gains and so on . •

Jerone is a local successful Filipino mortgage broker and one of the Executive

Director of the One Solutions group , he has 16 years experience in the accounting / finance / banking industry . He walks the talk as he is a successful avid property investor himself .

HAVE you ever thought of renovating your home ? Here are five ways to finance your home improvement project :

HOME EQUITY

YOUR home ’ s equity is the difference between the value of your home and the amount you still owe . Those who purchased before Sydney ’ s property price boom find that they already have equity in their homes and can possibly borrow up to 80 % of the value of their home . REFINANCING

REFINANCING means moving your loan from your current lender to another lender .

By TINA YUHICO

Finance Broker

This is an option , because some lenders will lend more and will allow more cash out than others . CONSTRUCTION LOAN

A construction loan will take into account the final value of your home after the renovation . This means you can borrow more for bigger renovation projects . You won ’ t be given the full loan amount upfront , but in staggered amounts over a period of time . LINE OF CREDIT

FOR ongoing renovation projects , a line

of credit allows the flexibility to withdraw funds from your home loan up to an agreed limit . As funds are made readily available , this product requires borrower discipline . PERSONAL LOAN

IF you don ’ t have enough equity in

your home , consider a personal loan . This is great for smaller home improvement projects . IMPORTANT TIPS

� Do your research to ensure that your home improvements add value to your home .

� Set a budget and stick to it .

� Explore how to fund it through the help of a finance broker .

Once you have a plan and your finances are in order , you can confidently take on that home improvement project without having to worry about how to pay for it . •

Tina is a Mortgage & Finance Broker at Maverick Finance .