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Now you can buy with a little help from your friends: We all know that Australia's housing market is one of the least affordable in the world. Housing affordability is affected by many factors including slow land releases and restrictive development regulations (both likely to persist for some time). An increasing number of Australians are turning to co-ownership as a solution. To discover some of the benefits (and how to avoid the pitfalls) from entering into a co-ownership arrangement, download my free guide - "You can buy with a little help from your friends"?.

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Top 12 Tips for Paying Your Home Loan Sooner. We all know the most common ones: Pay off quickly Pay fortnightly instead of monthly Make payments at a higher interest rate amount Consolidate your debts Abandon minor luxuries Switch to a new loan or lender with a more suitable rate and package. What about some others that we often don't think about? 7. Use your offset account to your advantage Instead of putting your spare cash into an interest bearing account where you earn very little interest and pay tax on the interest you earn, transfer any spare money you have into your offset account. The additional cash works to offset the interest you are paying on your home loan. 8. Split your loan If you are the type of borrower who worries about interest rates increasing but you don't want to be tied down by a fixed loan, a good compromise is a split loan. Split loans allow you to fix part of your home loan and set the balance of the loan with the variable rate of interest. Essentially this allows you more flexibility knowing part of your loan is safely fixed and won't move. If interest rates don't go up (or if they rise only slightly or slowly) then you have the flexibility of the variable portion of your loan and can pay that component off more quickly. 9. Use your equity If you have made good progress by paying down your home loan, many lenders will allow you to use a portion of this equity for investment. Providing you can service the new debt, it is the most common strategy for wealth creation used in Australia. As long as you are being advised and guided by a reputable credit adviser or financial planner, this type of investment is usually a safe strategy to start planning your financial future. 10. Refinance and invest the difference When you are fortunate enough to refinance and reduce your monthly repayments, rather than increasing your lifestyle or even paying down your mortgage, it is sometimes wise to invest the difference. We recommend you seek counsel and advice from a qualified finance specialist, like ourselves, before trying to figure it out yourself. Don't waste the opportunity by making mistakes. 11. Don't be afraid of alternate lenders with cheaper rates There are many second tier lenders who provide excellent products and rates competitive to the BIG 4. As the competition for business is at its all-time high, it makes lending a very interesting sector to be working in. With a strong property market and low interest rates, there are plenty of opportunities being provided by alternate lenders willing to take on traditional lenders with low fees and very competitive products. 12. Don't set and forget There is always the temptation to let your mortgage roll along, make your repayments as they fall due and think as little about it as possible. This attitude could be your biggest mistake. It is important to keep yourself up to date with the property and finance market. We encourage all of our clients to have an annual review with us to ensure we have you in the best financial situation available at the current time. Rates change, new products are introduced and changes in the finance market itself may allow you to seize an opportunity or negotiate a better deal. Stay informed and ahead of the game by reading our updates and committing to regular finance reviews.

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BUYER BEWARE THE BARGAINS Limited cash flow and equity mean many first-time property investors feel the need to chase down a bargain to enter the market. But, like most things in life, you usually get what you pay for, which in the case of property can mean unrealised returns or even losses. While there is nothing wrong with paying less in the hope of making more, investors need to understand when a cheap property is truly a bargain and when they could be selling (or rather buying) themselves short. Here is our guide to help investors actually get what they bargain for. Always ask why: There is always a reason a property is selling cheap. Your job is to find out why. Some reasons are obvious, the property is on a main road or backs onto a railway line but others may be less overt. There could be termite damage, rising damp or shifting foundations, which perhaps only a property inspection will reveal. While not irreparable, these can be big-ticket fixes and probably beyond your reach if you have limited funds. Other factors may be even more concealed. For example, a very small property with poorly placed sewer pipes that prevent extensions, a new flight path planned for overhead or a property in a high-risk flood zone. These are variables you cant control and should probably be avoided. The best way to avoid being sold a lemon is to do your research, not just on the property for sale but on others in the vicinity. What is the average price for similar properties in the same suburb? And what do they have that yours doesnt, or vice versa (as in the case of aircraft noise). That is not to say all cheap properties have sinister secrets. Some are under-priced because the owners need a quick sale or the property is part of a deceased estate. Keep in mind, though, these sorts of genuine bargains tend to get snapped up quick, so have your suburb research on hand to be in a position to pounce. What can and cant be fixed: Even in the property market there are lemons that can be turned into lemonade. It is a matter of knowing which lemons are worth squeezing, which means accepting what can and cant be fixed. What you can fix: - Minor noise (with insulation and double glazing). - Interior design. - Configuration of rooms (turning a study into a bedroom or vice versa). - Storage. - Natural lighting in a house (add a skylight, windows or glass doors). - Under-cover parking for a house (add a car port). - Landscaping. What you cant fix: Location. - Land zoning and covenants (restrictions on height, building type etc). - Land size. - Traffic. - Infrastructure that imposes on your property (e.g. power poles). - Flight paths. - Aspect (which way the property faces). - Natural lighting in a unit (you wont be allowed to add windows). - Unit block exterior (although you can try and influence the body corporate). Just because a negative, such as traffic, is beyond your control, the property may still be worth pursuing at the right price. You just need to accept it may be harder to rent and harder to sell, and will probably take longer than desired to increase in value. One of the biggest mistakes investors make when they purchase cheap properties with unfixables is to over-capitalise on renovations (see our story in this edition on this very subject). There can be a temptation to compensate on what cant be fixed by over-investing in what can. If you decide to invest in a bargain that has some obvious drawbacks, do your homework on which renovations will give you the best return on investment. Short-term pain, long-term gain: As with all investments, you need to weigh up your personal finance goals and individual circumstances before settling on a property. For many investors, a bargain buy (even with some of the unfixables) is going to be their best opportunity to gain a foothold in the market. Its worth considering, though, whether settling for something cheaper is the best strategy in the longer term. A slightly more expensive property in a quality suburb with higher growth potential could be worth the extra stretch up front if the capital gain over time far outstrips a bargain buy elsewhere. Buyers should also be wary of towns or suburbs billed as the next big thing. Where there is a boom, there can also be a bust. Towns built on the back of mining are key examples of property markets that can lure investors with promises of high rental returns. But if the mine dries up or goes belly up due to external factors, you could be left with a property that is worth much less than what you paid with few prospects of tenants. The key to taking a longer term view is patience, and ensuring you are in a financial position to stick to your plan, especially if it means holding onto a property for 10 or more years to realise its growth potential. Get expert advice: Your broker can help you assess your individual circumstances to determine what you can afford. Everyone's circumstances are unique so it is important your first investment takes into account your earnings now and into the future, plus any significant lifestyle changes that might affect your ability to service a loan. Are you planning to start a family or travel? Do you have kids in private education? It is important to weigh up all of these factors when considering your financial future.

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One little mistake that could ruin your life - and how to avoid it. There are so many things you need to organise when you purchase a property, and many buyers become quite overwhelmed with all of the paperwork, and coordinating their move. Mistakes can be made, and you might be surprised if you knew how many people forget to do a thorough inspection before settlement. By thorough inspection, I don't mean turning the lights on and off and looking for marks on the wall. The biggest mistake that many buyers make at the last hurdle, is forgetting to measure the boundaries of the property to check that everything is correct. You might think that this isn't really a big deal - who cares if the neighbour has a few centimetres of your back yard? Well sometimes it can make or break you financially, and cause an enormous amount of stress and conflict in your life. Meet the Wilsons: The Wilson family discovered the importance of checking boundaries when they moved from their 3 bedroom townhouse to a house with a big backyard in Fremantle last year. It was a hectic time for everyone, and it wasn't easy packing up the house with a baby and a toddler to think about. When the Wilsons did their final inspection, everything looked to be in order. The vendors had left the house wonderfully clean which was very helpful. They even mowed the lawns and replaced some of the light bulbs. The couple had forgotten to borrow a measuring wheel but they took a couple of minutes to count their paces along the boundary line to see that the title was correct. It wasn't until several months later that the family was confronted by their new neighbour on the left. He'd been measuring his block to get a planning permit through the council for a possible home extension. In the process, he discovered that the Wilson's garage on the edge of their property was actually built over 1.5 metres of his land. What followed was a lengthy legal battle which was expensive and stressful for all parties. In the end, the Wilsons were forced to tear down one side of their garage and make alterations to reduce its size. They also had to remove and rebuild the fence along the left boundary of their property. This is a great example of why it's so important to do your research when you buy a property, and avoid ending up in a similar situation.

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So, you're thinking about upgrading your home. Maybe your kids are getting older now and it's time to find a place with a big backyard. Most new home owners will make the decision to upgrade before long - but for many young families, a lack of planning can spell disaster when upsizing the family home. Before you start shopping around for a real estate agent, take a few minutes to ask yourself a few simple questions. Why do you want to move? Be clear about your reasons for upgrading. Buying an enormous home won't necessarily mean greater capital growth in the future. Sometimes the greatest growth is in the lower end of the market. If you want to upgrade simply to grow your property portfolio, consider purchasing an investment property instead. Where do you want to be? If you're upgrading to give everyone some space, consider the area that you want to live in. You might be able to afford a much bigger home by moving an extra 15 minutes from the city. It all depends what sort of lifestyle you want to maintain. What are the real costs? Investigate all of the costs associated with upsizing your home. That means, not just the additional mortgage payments, but increased utility bills, perhaps a longer commute to work, more furniture to fill the additional space etc. It's important to know exactly how much the move will cost you - not just the initial purchase. What about interest rates? Could you afford to borrow an extra $150,000 if the interest rates were 2% higher? Make sure you take into account some interest rate rises when you work out what you can afford to borrow. Although a lender might offer you the funds, that doesn't mean that they know everything about your lifestyle and budget. Will I change my lender? You might take the opportunity to shop around for a better deal on a loan before you purchase your new property. It's important to keep in mind though, there could be charges associated with paying out your current mortgage, and there will probably be some establishment fees involved in taking out a new loan. These fees should be part of your decision-making process. It's also important to ask your mortgage broker about Lenders Mortgage Insurance. LMI is generally payable when you borrow more than 80% of the purchase price. Depending on your purchase amount, LMI could add up to several thousand. Did you answer all of the above questions, and still want to upgrade your home? Great! There's nothing wrong with wanting to move on to greener pastures. But to avoid putting yourself under financial strain, it's always important to do your homework.

Money health check | ASIC's MoneySmart

Are you Financially Fit? Just like our health, our finances can do with a little check-up from time to time. Circumstances change - new job, new home, a partner or children - or we get caught up in the hurly-burly of life and lose touch with our finances. Thankfully, the Federal Government's MoneySmart program has created a handy online tool for all of us in need of a fiscal pulse check. The Money Health Check helps you get back to basics by looking at your circumstances and financial goals and helping you with strategies to reach them. The questions are straight forward and will prompt you to consider some of the financial red flags you may not be aware of, or perhaps prefer to ignore! The Money Health Check will help you take a global view of your finances - from regular budgeting to debt reduction, retirement and estate planning. It also highlights the value of protecting your assets once you have them. Consider this your money GP, where you can get an overall check-up, identify any issues and get the information you need for further action, if required. The aim is to help Australians be more financially resilient for the long haul. Don't put it off - get your Money Health Check today at www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/money-health-check

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Sherin - Mortgage Australia