A Basic Guide To Home Contents Insurance

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Basically, home contents insurance is insurance protection against the replacement cost that you would otherwise have to pay to replace the contents of your home in the event of then being lost, damaged or stolen. As is the case with home buildings insurance, the main factors contributing to grounds under which you can make a claim against your home contents insurance include theft/burglary, damage due to floods, burst water pipes or boilers, etc.

There are, however, two very important factors that you need to keep in mind when insuring the contents of your home:

First, in the case of home contents insurance, it is rarely the case that your mortgage provider is going to insist that you have this type of insurance as part of your mortgage agreement;

Second, regardless of whether you own or rent the property you are currently living in, you should still be looking to insure the contents of your home – as these are your personal possessions.

Two further aspects of home contents insurance also need to be considered carefully when you are checking out the different kinds of policies on offer. In some, but not all, cases you can be insured for your home contents even when the items listed in your home contents insurance policy are not actually physically located on the home ‘property’. So, for example,

First, it is possible to claim when you are transporting items from one place to another and they are stolen.

Second, home contents insurance is insurance against the replacement cost of the item being insured.
It does not, nor is it intended to, insure you against the nostalgic value of the item damaged/lost. So, for example, if you insure a picture your deceased grandmother gave you, which would cost £20 to replace, it makes little difference that it was your deceased grandmother who gave it to you and that it cannot, therefore, be replaced.

Although home contents insurance is, in all but a few very rare circumstances, a completely voluntary scheme of insurance to subscribe to, if you are in any doubt as to the value of this insurance scheme, take a quick mental inventory of the contents on your home and their value and then get a few quotes off the internet and you’ll soon be seeing the value of having your home contents properly insured.

 

KENWICK REAL ESTATE

FRIENDLY INSURANCE BROKER

Auto Insurance Tips

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1> Raising your deductible
Deductible is the amount you pay from your pocket before making an insurance claim. The disadvantage of raising your claim is when you make a claim, you will pay more. However, if you are a safe driver, you will overtime save more money by raising your insurance deductible. Look at your previous insurance claim history and make a discreet decision for yourself.

2> Older Auto – Drop comprehensive / collision coverage.
If your car is not worth much, why pay for comprehensive and collision insurance coverage. You can visit a myriad of online sites to find true worth of your car. Additionally your insurance broker might be able to pull up the true worth of your vehicle.

3> Taking advantage of low mileage
Some auto insurance companies will give discounts if you drive less than a certain number of miles or drive less than a certain distance to work.

4> Moving – Consider insurance costs.
If you are considering moving, it will be a good idea to call your insurance agent and get his opinion on the insurance costs in the new city or state.

5> Low profile vehicle
Your vehicle will also determine your overall insurance costs. Some of the cars are favorite for thieves since they fetch a good price. Some cars are more expensive to repair. It makes a lot of sense to do adequate amount of research before you make your auto purchase.

6> Make sure your vehicle is correctly listed by your insurance agent.
Many manufacturers offer somewhat similar model names for vehicles but insurance costs may vary. Additionally 2 or 4 door or the wrong model can impact your auto insurance quote.

7> Have your insurance broker check other insurance company discounts.
A lot of companies will offer discounts if you and your spouse are insured with the same insurance company. Additionally, if you seek home insurance, life insurance, auto insurance from the same insurance company, you will get some discounts. Check with your insurance agent on saving money.

TRUSTED INSURANCE BROKER

Fewer House Listings Recorded In December 2018

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It was a muted end of the year for the residential property listings in Australia as the number of homes for sale went down by 9.2% to 328,203 due to the holiday season.

While this seasonal decline is expected, SQM Research said areas such as Sydney, Melbourne, and Canberra recorded larger-than-expected drops in listings at 17.7%, 17.2%, and 15.5%, respectively. Of all the city capitals, Hobart clocked the lowest rate of decline at 5.8%.

“Listings in December had some large falls. However, let us keep in mind there was a surge in listings recorded in November and that December.  Traditionally records a large fall in properties for sale as this is a holiday period,” SQM Research Louis Christopher said.  Christopher projected that prices would continue falling in Sydney and Melbourne over the next months. However, he observed that asking prices in the two cities actually increased slightly during the previous month, up by 0.7% and 0.3%, respectively.

The largest monthly boost came from Canberra, where house asking prices rose 2.5%. However, unit asking prices in the city declined by 1.1%.  Sydney recorded the highest increase in unit asking prices at 0.7% but the largest decline in house asking prices at 1.6% over the month.

 

LOCAL MORTGAGE BROKER

LOCAL NEWS

Why Some Say Turning The Debt Taps Back On Is Irresponsible

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Treasurer Josh Frydenberg welcomed the New Year by urging banks to continue approving housing loans in a bid to drive the Australian economy — a thing that, according to some market watchers, is very irresponsible to say.

Speaking in regional Victoria last week, Frydenberg told banks to keep their books open and to approve more home loan applications. “You have a social and economic responsibility to ensure affordable and accessible and timely loans to the broader public. It’s in the banks’ interests, it’s in the economy’s interests, and it’s certainly in the public’s interests,” the treasurer said.

These sentiments followed the release of the CoreLogic December home value index, which showed a 2.3% quarterly decline, the worst since 2008.

After more than a year of mortgage lenders tightening their lending screws in compliance with regulations, housing credit has slowed significantly. In fact, official figures show that credit growth moderated to 4.9% in November last year, well below the 10-year average of 6.3%. North said that allowing banks to lend more would not do any good, as home prices relative to income are significantly higher than in most other countries around the world.

“We have more than a million households with a mortgage who are struggling to make mortgage repayments today. We don’t want to stoke that fire more,” he said.  He added that it is only appropriate for banks to keep their lending standards tight and focus on the capacity of the borrowers to make repayments in assessing applications.

“Our analysis shows that around 40% of loan applications are now being rejected, compared with 5% a year ago, because people don’t actually meet the lending criteria,” he said.

Do High Rental Yields Always Translate to High Returns?

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When it comes to property investing, getting higher rental yields and achieving higher returns are the ultimate goals. However, new research shows that the former does not necessarily result in the latter.

According to a report by RiskWise Property Research, which analysed five-year trends across Australia’s housing market, higher rental yields do not automatically translate to high overall returns for investors. In fact, while properties in cheaper areas were able to give investors a steady stream of income in the short term, they resulted in lower overall returns in the medium to longer term. Closely looking at it, it does not seem surprising as home values in cheaper markets take more time to appreciate.

RiskWise chief executive Doron Peleg told The New Daily that low-rent houses would be able to realize a 63.1% increase in net equity assuming a 20% deposit. On the other hand, high-return homes would be able to clock only a 29.5% increase. This means that low-rent dwellings were able to improve their values by more than twice that of the high-rent ones.

“When you break down properties with high rental returns and low rental returns, you see purchasing the high rental returns is extremely affordable, whereas a low-rental-return dwelling costs roughly three times more, which generally means they are blue chip,” he said.

This also means, as Peleg puts it, that while many properties can “pretty much pay for themselves,” investors might be missing significant overall returns in the long run.

 

LOCAL REAL ESTATE AGENT

RELIABLE MORTGAGE BROKER

Watch Out For These 4 Housing Market Scenarios This Year

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They say the New Year brings an opportunity for things to improve, but market watchers are not getting their hopes up for Australia’s housing market as conditions remain dire.

In a market forecast, CoreLogic head of research Tim Lawless said there are four scenarios that are likely to play out over the course of 2019, with the general downturn still continuing throughout the year.

The housing downturn in Sydney and Melbourne will continue to be the main culprit of the housing downturn. On the other hand, while other capital cities are expected to lose some momentum, they are likely to witness positive growth in nominal terms. “There will be a few exceptions: with the improving trend in Darwin, it looks likely the top end market will continue what is likely to be a long and gradual recovery in 2019, while the Perth market could also move back into positive growth territory through the year,” Lawless said.

On the home loan front, tight credit conditions are expected to persist, limiting housing market activity to below-average levels. The unfavourable lending environment will also discourage potential homebuyers from breaking into the market. The strict lending conditions will also have a negative spillover into consumer sentiment, which is already projected to weaken as Australia approaches a federal election.

The third likely scenario is the continued downturn in the new unit market, particularly in Sydney and Melbourne. This is due to weaker conditions across the two markets brought about by slowing migration rates from both overseas and interstate, fewer domestic and overseas investors, low valuations for off-the-plan unit settlements and overall tougher lending conditions.

Despite these discouraging market projections, one part of the market is likely to buck the trend. Lawless said lifestyle markets along the coastline and hinterland locations adjacent to the major capitals will remain a bright spot in the market as they continue to see strong demand from a variety of market segments.

While growth conditions will not be as stellar as last year, values are expected to trend higher throughout 2019.

Credit Card Debt Consolidation

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Credit card debt consolidation

 

Credit card debt is a nightmare of a problem and unfortunately there a lot of people who face this today (and if others don’t pay heed, they might get trapped into credit card debt too). Credit card debt consolidation is generally regarded as the most important step in credit card debt reduction and elimination.

Credit card debt consolidation is the process/strategy to consolidate debt from multiple credit cards into lesser number of credit cards. Credit card debt consolidation is sometimes also referred as a balance transfer where you transfer your balance on one credit card to another credit card. Generally, the balance transfer (or credit card debt consolidation) is done from credit cards with higher APR to credit cards with lower APR. Credit card debt consolidation can also be achieved by going for a bank loan (at a lower interest rate) and using that towards paying the debt on the higher APR credit cards. This loan is then paid-back to the bank in the form of monthly instalments.

As you would have noticed, a lot of credit card suppliers and banks keep coming out with attractive offers for Credit card debt consolidation. There is no dearth of 0% APR offers for credit card debt consolidation. However, credit card debt consolidation is a serious exercise and you must exercise caution. When going for credit card debt consolidation, you must properly analyze the offers from various banks and credit card suppliers. Check the time period for which 0% APR is being offered and also the APR that would be applicable after the lapse of that period. Generally, 0%APR is valid for a 6-12 month period only. So, if you are confident of paying back a considerable amount of debt in that period, this kind of credit card debt consolidation will work for you even if the APR (post 0% period) is a bit higher.  However, if that is not the case, the long term APR is going to be the most important thing for you. If the long term APR is more than the APR for your current credit card, this kind of Credit card debt consolidation will be futile for you. Also, check processing charges etc before you actually go for balance transfer or credit card debt consolidation with another supplier/bank. Another good idea is to check with your current credit card supplier and see if they can offer a lower APR to you in order to help you in clearing off your debt.

 

 

Credit Card Debts

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Credit Card Debt as a silent financial killer

 

Technology spoils people’s whims. It tends to cater to every human’s caprices. It feeds on the people’s undying thirst for easy, instant, and convenient. More often than not, it also causes them a lot of trouble—financial trouble through credit card debt—that is.

 

Credit Card convenience vs. Credit Card debt

 

We often see people pull out “plastic” to pay for everything they need. Why not? When all it takes is a quick swipe of the card through a little electronic box and a signature then, everything’s okay. You go home happy, content, and almost worry-free. On the other hand, not every one of these people realize that the convenience of using credit cards can lead to a false feeling of financial security. And this realization will strike them as soon as the bills arrive.

 

In fact, studies show that credit card debt and personal bankruptcies have increases bank profits to the highest level in the last five years. It only shows that more and more credit card holders were unable to manage their finances that lead to credit card debt. If you are a cardholder and having some credit card debt troubles at this early stage, it’ now time to think over the possible outcomes of this minor glitch so that a more serious problem with credit card debt would cease to arise.

Credit card gives people the feeling of invincibility. And it also gives them tons of uncertainty about their financial management capability when they encounter problems with their credit card debt. Although it is true that that credit cards solve financial matters especially when it comes to safety and convenience, credit cards also creates hassle especially when the person using it doesn’t know what you he or she’s getting into.

 

Indeed, paying off credit card debt may take a long time especially if the person has high interest rates. But, it doesn’t mean that you can do nothing about efficient management of credit card debt. When you find yourself overwhelmed with credit card debt, don’t fall into a pit of depression. You can get through it with discipline and a change in spending patterns. Start eliminating problems with credit card debt by getting tips and techniques on how to pay off your balances easier, how to consolidate of frequently encountered problems, look for free debt consultation agencies that can help you, and try—inch by inch—to rediscover ways on how you can regain your financial freedom by reducing you credit card debt.

 

The power to eliminate credit card debt

 

People who are having problems managing their credit card debt or those who are near in bankruptcy often don’t realize that the power to eliminate their credit card debt troubles totally is in their hands. Today, more and more Americans need credit card debt help badly. The main problem is that these families are having difficult times paying high interest for credit card debt. And instead of lifting the burden of credit card debt, more people are paying much in interest every month than that of the actual expenditure.

 

There are actually more lawful and moral ways to zero-out thousands of dollars in credit card debts. And if you only take the time to research and know your rights and how bankruptcy laws have changed, you will discover that there are valuable facts to eliminate credit card debt. Actually, the possibility of reducing or eliminating the high interest credit card debt is now more possible when a person takes action to get his or her finances back on track.

 

Apart from knowing your weapon in terminating credit card debt, it is very important that you develop a sense of control and perseverance first. Since credit card debt elimination process requires organization, clarity, and commitment to your own growth, it is a must that you are ready for the responsibility and to stand free and independent.

 

For those people who consider having a credit card indispensable but afraid of getting one because of the possibility of credit card debt nightmare, you must remember that credit card can be a powerful tool in managing your finances but there will always be glitches when not used properly. Of course, there are countless reasons why you should and shouldn’t get one depending on your needs. Whether you decide to get one or not, managing finances it still takes a sense of good budgeting, willingness to change spending habits, and the humility to avail low interest consolidation loans when you are already burdened by too much credit card debt.

 

 

 

Construction loans

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If you are thinking of building your own home, you will need to be familiar with the ins and outs of construction loans.

Construction loans are just not as straightforward as simple home loans. There are additional decisions to be made about the structure of the loan, additional documentation is required and the funding is released in an entirely different way.

Documentation

In addition to documentation about your finances, income and identity, your application for a construction loan needs to include contracts or tenders for the construction, as well as the plans so that a valuation can be performed.
Further documentation will also be required before the first payment is made from the lender to the builder, including a schedule of the payments to be made (called drawdowns), the builders’ insurance details and the final plans that have been approved by the local council.

Structure

To avoid having to contribute your full deposit and being charged interest on the entire loan amount from the moment the land purchase settles, you can split your mortgage into a land loan and a construction loan. At settlement of the land purchase, you pay lender’s mortgage insurance (LMI) on the land loan, if LMI applies, and start being charged interest and making repayments on the balance of the land loan. The interest and repayments on the construction portion then kick in only as each drawdown is processed.

Funding

The drawdown schedule is very important, as you don’t start paying interest on each portion of the loan until it is paid to the builder – you, the lender and the builder need to be satisfied with the schedule.
For the lender to make each payment to the builder, you will need to fill out a drawdown request form from your lender, and submit it to your builder. The builder can then send the lender your form with an invoice for that part of the payment and, after the lender is satisfied that the work has been completed and is up to the standard expected in the valuation, the drawdown can be completed with a payment to the builder.
Any changes to the contract and plans can trigger a reassessment of the loan, so be as sure as you can be that the plans and contracts the lender sees are final, and it is also worth trying to pay for any small amendments from your own pocket, rather than changing the loan and risking a reassessment.
Problems can also arise when other work on the site that isn’t completed by the builder needs to be paid for, as some lenders only make the remaining funds of the mortgage available after the completion of construction. While some builders will include subcontractors as part of the main contract, meaning that they can be paid by the builder as stages of work are complete throughout the drawdown schedule, others will not do this. Again, this may make it necessary to pay from your own pocket.

Find an MFAA Approved Finance Broker who has the expertise to find you the construction loan that best suits your needs.

Exit costs when refinancing

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Refinancing can be a great way to save money if you believe you are paying too much for your loan, but there is more to it than just finding a loan with a lower interest rate and making the change. Before making the switch, ensure the savings you could make outweigh the fees involved. Here are the different exit costs to consider:

Exit fee

Although loans taken out after 1 July 2011 are not subject to deferred establishment, or exit, fees, those taken out prior may still be. Also known as ‘early termination’ or ‘early discharge’ fees, they can sometimes be paid by your new lender but are normally applied to an early contract exit.

Establishment fee

Also known as ‘application’, ‘up-front’ or ‘set-up’ fees, these cover the lender’s cost of preparing the necessary documents for your new home loan. They are payable on most new loans, and the alternative to not paying this particular fee is being charged higher ongoing fees for the life of the loan.

Mortgage discharge fee

Covering your early legal release from all mortgage obligations, this fee is not to be confused with an exit fee. Also known as a ‘settlement’ or ‘termination’ fee, its purpose is to compensate your lender for the revenue it may lose due to the contract break.

Lender’s mortgage insurance (LMI)

The non-transferrable premium means that if you hold less than 20 per cent equity at the time of your refinance, you may have to pay LMI even if you paid it on the original loan. Extra care is also needed here because, whether or not you hold 20 per cent of the original valuation of the property, you may not if the property’s value has decreased and; while LMI may not have been a consideration at all in the original loan, it may be payable on the refinance.

Stamp duty

If your purpose for making the switch is to increase your loan amount, for example to fund renovations, then stamp duty will apply only to the difference between the original loan amount and the refinanced loan amount. Different rules apply in different states, so it’s worth speaking to your broker to see if this charge applies.

Other government charges

Fees are applied for the registration and deregistration of a mortgage so that all claims on a property can be checked by any future buyers. Varying from state to state, these can potentially add up to $1000 or more.

Break fee

If you were on a fixed rate loan, your lender is likely to charge you a fee for ‘breaking’ out of the loan term. This fee varies depending on the amount owed, the interest rate you were locked into, the current interest rate and the duration of your loan.

Although some of these fees can be negotiated by a broker, the total cost can be substantial. An MFAA accredited finance broker can ensure that refinancing will help you achieve your goals while maintaining your capacity to service the debt. A finance broker can also ensure you are only paying the relevant fees for your unique circumstance.