Uniik Finance, Author at Uniik Finance

How You Can Fund Home Renovations

Posted on March 6, 2020March 6, 2020 by Uniik Finance

Making renovations on your home can be both exciting and exhausting. Whether you are adding a spare room or sharpening the look of your kitchen it is rewarding to see the transformation. That is why we have made a list of ways to fund your renovations so you can focus more on the fun stuff.

Refinancing Your Existing Home Loan

In order to acquire the extra funds, you need to be able to renovate your home you could refinance your existing home loan and unlock your equity. If there are no fees associated with refinancing, you could save yourself thousands of dollars by finding a loan with a lower interest rate.

Applying for a Personal Loan

For smaller renovations, a personal loan is a worthwhile choice given how quickly the money is available to be used. Once you are approved, you get a simple lump sum deposited into your account and you can begin your renovations. It is important to keep in mind that interest rates for personal loans can be higher than a traditional home loan and you will need to know the cost of your renovations before you apply.

Applying for a Construction Loan

Another choice to consider is a construction loan, which takes into account the final value of your home after renovation. A construction loan is usually paid in 5 increments, meaning you will receive payment after work has been completed for each stage of the build. This reduces the risk for both you and the lender and ensures you don’t get in large amounts of debt unnecessarily.

All these options are viable ways of funding your renovation and each come with their own advantages.

If you would like to learn more about which renovation loan choice is ideal for you, get in touch with us today.

Things you should know when buying your first property

Posted on August 1, 2019August 13, 2019 by Uniik Finance

Some main points need to be considered when buying a first home in Victoria

Budget and upfront costs

Before going too far, you should have a clear view of your financial situations and what you can afford to buy. So you have to consider the following factors that may affect your budget plan and affordability.

Stamp duty: the tax amount depends on the state you live in and applied on the purchase value of the property. You can get an exemption or discount if buying property less than $750k (in Victoria)
First home-owner grant is a little extra help from the Government to offset the effect of GST on homeownership. You can use the amount of 10k or 20k (if buying in regional areas) from this support to put in deposit or any unexpected fees during the process.
Legal and conveyancing fees (around $1000 to $3000) and other costs may occur before moving or during living there such as council rate, home insurance, strata fees, utilities, and cost related to repair or maintenance.

Saving for deposit

When you apply for loans, the bank would want to see evidence of your savings for three to six months and this would help you to show you good expense habit. Basically, you need to show that you have 20% of the purchase price or 10% with lender mortgage insurance. Furthermore, your loan serviceability can be impacted by anything you have on payment plans such as existing loans, credit cards and even recently financial support like Afterpay, Zippay. Hence, it is good to have a financial budget and plan to follow within a few months before you actually buying your first home.

Loan pre-approval

Before looking for a specific house, you should work with mortgage broker or bankers to get pre-approval for home loans. More than half of Australian homeowners have used mortgage brokers because of convenience as they have a better understanding of the loan market and would help to deal with different lenders for your best interests. The major papers you need at this stage are to verify your income, the banks would ask for 2 pay-slips, latest bank statements, and any other documents to confirm your stable earning over an extended period of time.

House searching and inspection

Before getting to any contract of sale of joining bidding wars, you should do some researches about the areas you want to live. Afterwards, narrowing down to 2-3 suburbs that have price range is affordable for yourself. Creating a checklist or filter with all the critical features you need, this would help you to choose which properties to go for inspections. If you are interested in a particular property, you can arrange a building and pest inspection with average cost $500- $700 for peace of mind that the property is in good conditions. This is a good time to appoint a solicitor or conveyancer to help you with legal documents and related matters.

Sign the contract and obtain full loan approval

When the contract is exchanged at auction or private sale, 10% of the purchase price should be paid, and settlement is generally 2-3 months from the date of exchange. Cooling-off period: Depend on the state in which the property is located, most buyers of residential property receive cooling-off period (with some exceptions like buying at auction). In many cases, the contract you exchanged and accepted by the vendor, you would have the condition of “Subject of finance”, then you can have time to gather all documents and send to mortgage brokers/bank for full-approval. There is a number of things you should be considered:

Interest rates: is it fixed-rate or variable rate?
Repayment type: ‘principal and interest’ or ‘interest only’ for a certain period
Term of loan: usually 25-30 years
Other features: redraw funds, offset account, whether you can make additional payments and how often the interest is calculated?

Settlement

One week before settlement, it is recommended that you physically perform a final inspection to make sure that the house is still in the condition that you have seen before. This is also to make sure that the owners or tenants already moved out and nothing wrong with the light fitting or doors, windows. Besides, the house insurance is required on or before settlement occurs. Your solicitor will arrange the settlement with the vendor’s solicitor and liaise with your lender to organize for the remaining funds to be available on the time and day of settlement. On settlement day, your solicitor will contact you to let you know that settlement has taken place. They will also send you a Statement of Adjustment to show you how the funds have been paid to all parties.

All done and now congratulations on your first property.

Variable rate vs Fixed rate home loan

Posted on August 1, 2019August 13, 2019 by Uniik Finance

Generally, when you take out a home loan, you have options to choose: a fixed interest rate or a variable interest rate.

Fixed home loans have an interest rate that is fixed for a set period of time, typically 1, 3 or 5 years. At the end of the fixed-rate term, the loan will usually switch to the standard variable rate offered by the lender. The main advantages of fixing rate are rate increase would not affect your monthly repayment and it is easier to manage your budget and set up financial goals as the repayment is a certain amount.

But some drawbacks with fixing your loan are:

You won’t benefit from a drop in interest rate if the variable rate is lower than your fixed rate.
Most banks will set a limit on extra repayment amount you can make.
A redraw facility may not be offered on a fixed-rate loan.
Break fees – when you change or pay off your loan within the fixed-rate period

Variable-rate, in contrast, gives you some flexibilities when you change financial plans or so. Some main advantages of variable home loan:

You can make extra repayment as much as you want at no extra cost, which can save you interest and you can pay off the loan sooner
More features: redraw facility, an offset account
More flexible: you can easily switch loans to other product or lenders when you find a much better deal elsewhere

However, disadvantages of variable loan should consider are the facts it is harder to make budgeting as the rate can increase and you may struggle with repayment increase unpredictable.

Can’t decide? A splitting loan is a good compromise

Another option you may think of is having a part fixed and another variable interest loan. The split loan allows you to not only to minimize the risk of an interest rate increase but also give you more flexibility to make extra repayments. And you can choose how to split the loan, i.e 50/50 or 30/70. By doing this, you can both manage to budget and have benefited from features like redraw, offset account and reduce the break fees when you change your financial plan.

Lender mortgage insurance

Posted on August 1, 2019August 12, 2019 by Uniik Finance

LENDER MORTGAGE INSURANCE

Lender Mortgage Insurance (LMI) is an insurance policy that some borrower would pay for when they don’t have enough 20% deposit as bank requirements. The purpose of LMI is to protect the lender from financial loss if the borrower defaults on their loan and the sale of the property don’t equal the unpaid amount of the mortgage.

Unlike many people think that the LMI is to protect the borrower in case of loan default, the true purpose of LMI is to reduce the risk to the lender and allow banks or other lenders be able to lend larger amounts and have more loan approval quickly.

When you need to take out LMI to increase your loan amount, you may need to pay upfront or add into your home loan. However, LMI is not refundable, so when you refinance to another lender, you may need to pay a new LMI policy if required.

If your deposit is less than 20% of the assessed value of the property, in other words, your Loan to value ratio (LVR) is more than 80%, then you need to pay for LMI. In general, the actual cost of LMI usually depends on your LVR and amount of money you borrow, for example, the cost is about over $10,000 for a home loan of $500,000.

So the question for many first home buyer is whether to pay LMI or more savings?

There are many debates between first-home buyers about time to enter the property market, as they may hold off on house hunting and spend a few more months or even year to save up a bigger deposit. The answer is totally unique for each home buyers’ situations, but remember the housing market sometimes could be very unpredictable, so it is hard to judge. You have to choose the best option for you.

How can foreign buyers invest in Australian property?

Posted on August 1, 2019August 20, 2019 by Uniik Finance

Investing in Australian property has become popular with overseas investors and Australian expats looking for strong returns and stability.

However, there are some main points you should know in advance

In December 2015, the Australian Government introduced new legislation to foreign investors to purchase Australian property. The changes are that non-resident buyers can only invest in new dwellings, off-the-plan properties under construction, or vacant land with a view to development.

If you are not residents, you are not allowed to buy established dwellings unless you plan to demolish the dwelling and construct a new one within 4 years of the date of approval. Non-residents who purchase property in Australia are required to seek approval from the Foreign Investment Review Board (FIRB) for each purchase. However, the good news is that you can apply online for the approval and there is no limit to the number of the new dwellings you can purchase. According to FIRB, a new dwelling must be built on residential land, must not have been previously sold as a dwelling, and must either:

Not have been previously occupied
If the dwelling is part of a development and was sold by the developer of that development, not have been previously occupied for more than 12 months.

The process of obtaining approval and purchasing properties for foreigners may involve some professionals:

- Conveyancer or solicitor: to take care of your legal work and documents
- Mortgage broker: free service when you need to get a mortgage through Australian lenders.
- Accountant: to help you with financial structure and tax advice
- Buyer advocate: for properties hunting stage, who understand your situation as well as the local real estate market.
- Other professionals (if required) like town planners and architects, etc. when you plan to demolish and develop new dwellings to meet the requirement from FIRB.

Finally, it’s also worth remembering that there are tax implications for investing in Australian property. Any rental income you receive from your investment will need to be declared on an Australian tax return, while you’ll need to pay Capital Gains Tax on any profit you make when selling the property.

Hans is the most passionate and dedicated person to his work that I have ever had the wonderful opportunity to meet. He strives above and beyond to achieve the best possible outcome for his clients. He always finds the time to make himself available without hesitation and his bubbly personality and exciting nature will bring a smile to your face

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I've had the pleasure of using Uniik Finance for many of my purchases, Hans' is always fantastic. He knows the business very well, he's very thorough and diligent to make sure a successful loan and settlement. Highly recommended.

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What can I possibly say about Hans And my experience with him!
Extremely competitive ,Professional and efficient
I recently refinanced my home loans where Uniik finance who did all the hard work of finding the best possible loan for my circumstances , when I realised my interest rate had become really uncompetitive due to my old lender not passing through rate cuts and even increasing my rates by small bits here and there over the years. By getting Hans to look into my portfolio and moving me to another loan provider who was able to reduce my rate from well above 6% to just 3.82 %, which adds up to a lot of dollars saved every year. The initial application with with Uniik finance was very easy.
There was no hassle and the time involved was well worth the savings!
Hans has been great to deal with, both through the application and with day to day stuff.Thank you again
Highly recommended.

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