THE MESSAGE . BRINGING INTO FOCUS FILIPINO PRESENCE IN AUSTRALIA www . kalatas . com . au | Volume 7 Number 8 | MAY 2017 PROPERTY & FINANCE
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JERONE BALAGTAS
DOM MELLA
THE MESSAGE . BRINGING INTO FOCUS FILIPINO PRESENCE IN AUSTRALIA www . kalatas . com . au | Volume 7 Number 8 | MAY 2017 PROPERTY & FINANCE
17
Units smaller than 50m 2
With so many unit developments , it is important to understand how banks treat them as they have varying policies as to the amount you are able to borrow against them .
PROPERTY | FINANCE
JERONE BALAGTAS
Jerone . BALAGTAS @ onelending . com . au
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Small apartments under 50m2 or under 40m2 can be financed through mainstream lenders however it is key to know that various banks have different requirements .
There is also sometimes a grey area of misunderstanding between what is and what isn ’ t smaller than a certain size . This can come down to how an actual valuer measures a property . An example in the past where one valuer valued a property on behalf of a lender and noted it was 39m2 and another noted the same property was 45m2 !
There are two ways lenders and mortgage insurers look at unit size . One way is looking at the “ total unit size ” which includes the internal space of the unit , the balcony space and car space if on title of the property . The other method is by solely focusing on the internal size of an apartment .
UNITS BETWEEN 40M2 & 50M2
Generally if the property is more than 40m2 internally ,
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excluding balcony space and carport space you should be able to get a loan to value ratio loan up to a maximum of 95 % for purchases and 90 % for refinances , although this space is quickly changing where it is more probably safer to say aim for < 90 %.
It is key to know the internal size of the property in m2 and the balcony and car space sizes ( if applicable ), that way you are best able to decide which lender will lend you the required loan .
MORTGAGE INSURERS POLICIES BETWEEN 40M2 & 50M2
Loans with LVR ’ s above 80 % are subject to the mortgage insurers policies in addition to the actual lenders themselves . However many larger lenders have what is called a delegated lending authority ( DLA ) with their chosen insurer . This means effectively the lenders policies override the mortgage insurers in most instances . So it would be a smart approach to
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borrower with the bank that is aligned to the right mortgage insurer with a DLA .
Both mortgage insurers have potential issues with smaller units . Genworth is a bit vague as to what is a good quality property located in a desirable location and this is really an easy out for them if they don ’ t like your application for whatever reason and the property in questions is between 40 and 50m2 . QBE on the other hand is OK with units less than 50m2 as long as the total unit size with the balcony and car space added is 50m2 or more .
WHY ARE THE LENDING RULES SO COMPLICATED FOR UNITS UNDER 50M2 ?
It comes down to the risk , smaller units are limited to a smaller market if banks need to reposes and resell . If a property is very small lenders and insurers rightly take the view that the property will appeal to less people than a standard suburban home or a larger unit for example . Therefore a small
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unit is considered inferior security as compared to more standard properties .
This short article is just a guide to give the reader understanding that buying a unit that is under 50sqm can be a complex decision when deciding which bank to approach . With the continuous changes in lending and banks
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limiting lending to certain units it is best to consult a broker who is able to determine which
bank you will fit best . I can help make sure you choose the right bank .
Jerone is a local successful Filipino mortgage broker and one of the Executive Directors of the One Solutions group , he has 15 years experience in the accounting / finance / banking industry . He walks the talk as he is a successful avid property investor himself . He encourages anyone to contact him regarding questions pertaining to home loans , investments and finance in general , e-mail at Jerone . BALAGTAS @ onelending . com . au or 0439 594 899 . Jerone can help you with your home loan and help you build wealth .
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Helpful tips when buying property
Sydney ’ s Median House Price Drops below $ 1 Million Mark !
Sydney ’ s median house price has fallen below $ 1 million after recording a second consecutive quarterly drop for the first time in five years , new data shows .
Over the March 2017 quarter , the harbour city ’ s median house price dropped 1.5 per cent to $ 995,804 , with apartments slipping 0.7 per cent to $ 656,166 , according to Domain Group ’ s March House Price Report .
This decline comes after Sydney saw a record fall in house prices of 3 per cent over the December quarter . House prices remain up 6.9 per cent year on year . This data may indicate that we are entering a new environment of low and modest growth , but there is no sign of a drastic fall . Sydney is seeing a natural moderation of prices due to the decamping of investors . For some buyers this is a welcome news , considering the growth Sydney had over the past three years .
The decline in prices and the long awaited government initiative ( expected in May
REAL ESTATE MADE EASY
DOM MELLA
dom . mella @ raywhite . com
budget ) may be the trigger that will encourage the first home buyers to actually make the move now of acquiring their first home .
Deciding what to pay for a property can be a daunting experience for anyone , most especially for a first home buyer , but armed with the right information , you can get some confidence in making a decision and still get a great deal .
For further information or free advice contact Dom on 02 8887 5400 or 0403 226 169 .
Dom Mella is the Principal / Licensee of Ray White Rooty Hill . He ’ s also a qualified accountant with background in Finance & Investments . He ’ s been in real estate business since 1999 .
During the amnesty period tenants or members of the public can provide declarations or information anonymously 24 hours , 7 days a week by filling out our form online at www . facs . nsw . gov . au / amnesty , contacting 1800 422 322 or emailing amnesty2017 @ facs . nsw . gov . au
Seven week public housing amnesty begins
Social housing tenants living in NSW now have the opportunity to declare undisclosed income , financial assets , property and unauthorised occupants , under the protection of a seven-week amnesty beginning April 24 .
Tip # 1 . Sticking to a budget
One of the most basic aspects of buying is knowing what you have to spend . By having conscious limit as to what you can afford , it will stop you from overspending and blowing out your budget . If you overspend , either by getting caught up in the drama of auction day , or being intent on competing with another buyer , you may get the property , but find out you cannot afford the repayments .
Tip # 2 . Don ’ t be in a rush and don ’ t get too emotional Doing things in a rush is often a bad idea . No matter how great a deal seems , don ’ t rush in without first doing due diligence . It is also important not to get too emotionally attached to a property . You can love it but getting attached pre-sale may mean overspending . Remember , buying or investing should be done by the numbers as well as by heart .
Tip # 3 . Knowing the worth of a property
Researching the market prices of an area is equally important and should be done before making an offer or bidding at auction . Your research should include the property ’ s sale history , such as how much the vendor paid for it – which can usually be found online , how much comparable properties are selling for and a history of recent sales in the area . Get some independent advice from other real estate professional who has a local knowledge of the desired area .
Tip # 4 . Do some due diligence
Having all the relevant inspections done , i . e . building and pest or strata report , will be helpful in your decision process . If satisfactory , you know you are considering a solid dwelling ; that is free of any destructive pests ; that is unlikely to fall apart sooner or later .
Tip # 5 . Know the property inside out Having a solid knowledge of the property puts you in a better position . While you don ’ t want it to have too many faults , knowing what problems do exist may help you in determining how much to pay . Knowing the history of a property will also help . The best way to do this is by asking a lot of questions . How long has it been on the market ? Has it been passed-in at auction ? How many offers have been received ? Has the price been reduced from the original listed price ? Are the vendors highly motivated to sell ?
Minister for Social Housing , Pru Goward said the amnesty – which will run from April 24 to June 11 – ensures the system is fair for all tenants .
“ We want all of our FACS Housing and Aboriginal Housing Office tenants to have the opportunity to declare a change in their circumstances without the fear of prosecution - and that is why from today tenants can declare any changes to their income , and they won ’ t be prosecuted or charged back rent ,” Ms Goward said .
“ Public housing tenants pay rent based on the total household ’ s income and assets . If they do not declare their income , assets or additional people living in their home , then they are not paying the correct rent . It ’ s important that FACS has all the correct information to ensure a fair system for everyone .”
During the 2014 amnesty , more than 10,000 calls and 600 online forms or emails were received from tenants declaring undisclosed income , assets and property .
Ms Goward said results from two previous amnesties had generated more than $ 10 million in additional rent .
“ We ’ ve actually seen a significant increase in the annual rent paid as a result of two previous amnesties and that means we can reinvest in social housing and deliver better quality services to more people ,” Ms Goward said .
Members of the public can also contact FACS with allegations about tenants during the amnesty and tenants will have a chance to respond to these claims .
During the amnesty period tenants or members of the public can provide declarations or information anonymously 24 hours , 7 days a week by filling out our form online at www . facs . nsw . gov . au / amnesty , contacting 1800 422 322 or emailing amnesty2017 @ facs . nsw . gov . au