
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Telephone : 03 9723 0522
Email: integrityone@iplan.com.au
Your Complete Financial Solution
Goals are important in keeping us motivated to get to where we want to be. When it comes to property, your goal may be to get a foot on the ladder, grow your portfolio or secure your dream home.
The key to achieving your goals is identifying what they are – making them quantifiable and then putting a plan in place to reach them. Now is a great time to think about your property goals for 2023.
Entering the property market as a first home buyer can be both exciting and daunting, and it can be hard to save for the initial deposit. However, the government has introduced a number of grants that could help eligible first home buyers.
Whether you’re new to investing in property or continuing to build on your portfolio, your goals need to take into account your investment strategy – are you wanting to take advantage of negative gearing to generate wealth, ‘rentvesting’ to get onto the property ladder, or are you investing in property to create a passive income stream to help fund retirement.
If buying a larger home is on the cards, these properties are typically more expensive; therefore, you’ll need to factor this in when goal setting and understand how much this will impact your budget – will you need to make any sacrifices to your current lifestyle to service the loan?
There are many different approaches when it comes to goal setting. You’ve likely heard of SMART goals, which are Specific, Measurable, Achievable, Relevant and Time-Bound.
Vague or general goals like “save a deposit for a house” are harder to achieve and often don’t come to fruition as there is no plan behind them. Using the SMART goals framework forces you to be specific about what you want, have a way to measure and track your progress, ensure that your goal is achievable and relevant to your needs and that it has a timeframe associated with the goal.
Specific – Exactly what do you want to achieve?
Measurable – How will you know when you have achieved it?
Achievable – What will you do to reach your goal?
Relevant – How does your goal align with your key objectives?
Time-bound – When will you have achieved your goal?
You can use the SMART framework with each of your goals and then break down the steps required to meet each goal.
As you begin setting your property goals, consider how these goals will influence your family’s day-to-day life and your overall personal goals and values, as this can have a big impact on your decision making.
If you’re a first home buyer, you need to identify how much you will be able to borrow, as this will determine how much deposit you will need and whether you’re eligible for any home owner grants. You should also consider other costs that may be associated with purchasing a home, for example, you will need a conveyancer/solicitor as well as any building or pest inspections that may be required.
Plus, there is the additional cost of furnishing the home, so it’s important that you do your homework to understand exactly how much your initial outlay will be.
For the investor, you might be working towards a specific amount in passive income you want to generate, or you may want to own a set number of investment properties by a certain age.
If you have equity in your current home, you could use that to purchase an investment property, or another consideration is to buy a property off the plan, as these properties can sometimes be less expensive than an established home.
It’s also important to factor in the potential rental returns in the area you are looking to buy. Investment properties will also require regular maintenance, so having an emergency fund could be a good idea.
The upgrader may have a set floorplan in mind or be looking to move to a new area. Again, you’ll need to factor in how you are going to service the loan if it is higher than your current mortgage repayments, and other costs associated with the upgrade. You’ll more than likely need to purchase additional or different furniture to fill a larger home.
Where we can sometimes lose our way with our goals is by setting a framework that is unrealistic and this is where they may get discarded. If you’ve set goals that are unachievable – especially when it comes to budgeting – it can be challenging to see them through. Perhaps you decided to save for a deposit but are now finding the lifestyle sacrifices are too much. This is where leaning on your support network as a reminder as to your ‘why’ can be helpful.
Visualising your goals can also be powerful. While this may sound ‘woo’, imagining yourself in your property – whether it be your first home, getting the keys to your investment property or moving into a bigger house – can keep you motivated. Tracking your progress regularly is also a smart idea, as this will not only keep you working towards your property goal, but it can also help you recognise the small wins and where you might need to adjust your goals.
Accountability is also important, which is why we often share our goals with others so that we can feel more motivated to reach them.
If you are considering purchasing a property in 2023, we are here to help so contact us today.
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Telephone : 03 9723 0522
Email: integrityone@iplan.com.au
Stay up to date with what’s happened in the Australian economy and markets over the past month.
As 2022 drew to a close, investors remained focused on inflation, interest rates and recession worries.
The ASX200 index declined in December after two months of gains, ending a challenging year showing an overall loss through 2022 of over 7%.
Click here for our January update video.
Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Email: integrityone@iplan.com.au
Telephone : 03 9723 0522
After months of research, weekends spent attending inspections and auctions, finding the perfect home, at the right price brings a sense of relief and excitement. But what if you haven’t sold your current house yet?
Finding your next home before settling your existing property’s sale is a common predicament, with many using bridging finance as a convenient way to fund their crossover period.
Fortunately, most lenders now offer this type of finance and there are lots of options available. However, there are also some important things to consider before adding a bridging loan to your mortgage. Let’s go over the basics to help you decide if it could work for you.
Using a bridging loan can help ensure you don’t miss out on your new dream home or accept a lower offer as you rush the sale of your current one. And if you can buy before selling, it also means you won’t have to waste money renting while you look for your next home.
You can also use bridging finance to fund renovations to prepare your property for sale or to cover costs for things like moving and medical, legal or general living expenses. In all these cases, you must have a property already on the market and expected to sell within 6 to 12 months.
Lenders have a range of ways they link bridging and home loans, but they are basically an advance on the sale of your existing home. Essentially, when you buy your next property, you start paying your bridging loan interest and new mortgage repayments.
We can discuss the setup of your finance with lenders to suit your circumstances. This may include deferring bridging interest payments until you settle the sale of your current home. It may also be possible to negotiate the same or different interest rates for your bridging and home loans depending on whether you want your ongoing mortgage to be a fixed or variable rate.
When deciding whether bridging finance will work for you, you may need to include paying your existing mortgage until the property is sold in your calculations.
Bridging loans can be either closed or open. If you have agreed a sale and settlement date, you can select a closed bridging loan that ends just after this date. If you haven’t found a buyer, an open bridging loan usually has a term of 6 or 12 months.
With both, it’s usual for a lender to ask for proof that your current property is already on the market. Many lenders charge a higher interest rate if you don’t sell your property by the agreed date, so it pays to ensure both sales go through within the agreed timeframe. And just like regular mortgages, they can also force the sale of your existing property if you fail to meet repayments.
Lenders vary in the types of properties they will lend against. Some won’t lend to companies or for strata titles, for example. They also often require higher owner equity in both the old and new homes. And like ordinary mortgages, the amount of equity you have will affect your interest rate.
It’s common, but not essential, to use the same lender for your bridging finance and new property mortgage. Lenders use a complicated formula to decide if you can afford to repay these combined loans. This is called your ‘peak debt’.
Say your new home loan is for $800,000 and your bridging loan is for $200,000. That means your peak debt is $1 million, plus interest for the duration of your bridging loan term. If you then pay $400,000 of equity from the sale of your old home into your loans, your ongoing balance reduces to $600,000. Which will be your mortgage amount going forward.
With rising interest rates and property price fluctuations, it’s more important than ever to get your changing home calculations right.
If you’d like to know more, please get in touch as soon as you’re thinking of selling. We can calculate what you can afford to buy and go through your lender and loan options to find a solution that works for you
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Telephone : 03 9723 0522
Email: integrityone@iplan.com.au
Until recently, financial abuse was often kept secret, especially where it occurred within the family. Thankfully that’s changing with public awareness campaigns and help becoming more readily available.
The emotional and economic damage caused by financial abuse can be far reaching and devastating. A recent Australian report calculates that in 2020 alone, financial abuse victims lost $5.7 billion while the cost to the broader economy was $5.2 billion.
Nearly one in 30 women and one in 50 men suffer financial abuse each year, according to the Deloitte Access Economics report The Cost of Financial Abuse in Australia, 2022. These figures are almost certainly an underestimate, the report adds.
There are no typical victims of financial abuse: those affected are of all ages and means. Sadly, the abuser is often a friend, carer, partner or family member.
Financial abuse is when someone uses your money without your permission, prevents you from getting access to money or takes charge of your financial decisions.
These days, financial abuse is considered a form of domestic and family violence, taking away your independence and leaving you feeling vulnerable and anxious. Victims may also suffer physical violence and emotional abuse.
The most common type of financial abuse is withholding income or controlling how it is spent, according to the Deloitte report. But there are other forms of abuse that can be equally harmful such as making a partner liable for a joint debt, preventing someone from working, refusing to contribute to household expenses and refusing to contribute to the costs of raising a child.
Many victims also suffer flow-on effects of the abuse such as financial hardship and stress, leading to mental health issues. Some may also lose their home.
In some cases of family violence, one partner takes control of the couple’s finances, preventing the victim from leaving the relationship. In others, where the victim does manage to leave, the abuser may continue their abuse using tactics such as expensive legal action or disrupting the victim’s work or business.
Victims of financial abuse may not be aware of the abuse for some time, allowing perpetrators to empty bank accounts, deplete investments and incur large debts in the victim’s name.
The federal government agency, Services Australia says the warning signs include:
Incurring debts in your name is another form of financial abuse. Your partner may spend more than you agree on your credit card, pressure you into co-signing a loan with them, or take out a loan in your name, according to Australian Family Lawyers. They may also limit your educational opportunities by, for example, preventing you from enrolling in studies that could advance your career.
Older people and those living with disability can be particularly vulnerable to financial abuse if they rely on others for help and advice. Financial abusers may take money from their bank accounts or wallets, ask an older person to change their Will, take jewellery or other valuable items from their home, or take control of their decisions using a Power of Attorney when they are still capable of making their own decisions.
If you or someone you know is suffering financial abuse, a number of free and confidential resources are available.
The MoneySmart website provides information about free legal advice at community legal centres or legal aid centres, and a number of suggestions if you need urgent help with money.
You can also find free and confidential counselling for family violence, abuse and sexual assault at: 1800RESPECT (24 hours a day, seven days a week) 1800 737 732
For crisis support, contact Lifeline (24 hours a day, seven days a week) 13 11 14
We understand that it can be difficult reaching out for support if you feel you or someone you love is being taken advantage of financially, especially if a family member is involved. Please call us if you would like a confidential discussion about safeguarding your finances.
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Email: integrityone@iplan.com.au
Telephone : 03 9723 0522
If you’re planning to take advantage of lower property prices and buy in 2023, now’s the time to get organised. Whether you’re looking to buy your first home, move to a different house or invest, you’ll still face competition to secure your dream home, so being ready to move quickly is paramount. A big part of this, is getting your pre-approval sorted. Here’s what you need to know and do.
Home loan pre-approval is when a lender states in writing how much they are likely to let you borrow. This allows real estate agents and sellers to take your purchase offer seriously. It means the lender has reviewed most of your documentation and is likely to approve your home loan application faster. It also gives you a very realistic maximum price point when researching properties.
Pre-approval time frames usually vary from three to six months. While you may be able to negotiate an extension, in the current volatile market it’s actually in your favour to regularly check that your pre-approval maximum loan amount is still valid.
It’s important to understand that pre-approval isn’t a guarantee. Lenders can still refuse your loan application. Common reasons for this could include the property not meeting their loan requirements – it could be a low valuation or it’s in a development that’s considered high risk. It could also be because you haven’t satisfied other conditions like providing additional documentation if required, or your financial situation has changed due to pregnancy, redundancy or starting a new job (this could mean waiting six months).
Interest rate rises may also affect how much lenders decide you can afford to borrow. First homebuyer grants may change and differ in each state, so you will need to keep an eye on these too.
Application requirements may differ between lenders and depending on your particular circumstances, will determine what they require. So, it’s important to review your information so we can match you with the best potential lenders and understand what documents you might need.
Most lenders will want to see proof of:
The sooner this is submitted the sooner your pre-approval is organised to start your property search.
Once you apply for a loan and have found a property you would like to buy, it will remain ‘conditional’ while the lender checks additional documentation and waits for the valuation and completed sale contract to be submitted. Your loan only becomes ‘unconditional’ (guaranteed to go through) when the lender formally approves the loan. While pre-approvals don’t register on your credit score, being refused a specific loan does, so it’s important that you regularly check in with us about any changes lenders may make before putting in an offer on a property.
If you are self-employed or a company, pre-approval can be more complex. Most lenders ask for at least two years’ worth of tax returns, financial and BAS statements. Some may consider you with one year of financial documentation, depending on your financial history and accountant’s statement. While most lenders will consider home loans for companies and family trusts, the loan documents can be more complicated. This means you may need more time to organise your paperwork and look at your loan options.
And with your pre-approval ready, you can feel confident when putting in your offer. Let’s have a chat about your situation sooner rather than later to get your pre-approval underway and get you into your new home in 2023.
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Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Telephone : 03 9723 0522
Email: integrityone@iplan.com.au
Many parents and grandparents worry about how to help the children in their lives achieve financial independence. But the value of long-term investment can seem like a dry and complicated idea for kids to get their heads around.
In fact, many young people would like to know more about money, according to a Young People and Money survey by the Australian Securities and Investments Commission MoneySmart website. The survey found more than half of the 15-21-year-olds surveyed were interested in learning how to invest, different types of investments and possible risks and returns. What’s more, almost all those young people with at least one investment were interested enough to regularly check performance.
One way to introduce investment to children may be to begin a share portfolio on their behalf. The child can follow the progress of the companies they are investing in, understand how the market can fluctuate over the short- and long-term, as well as learn to deal with some of the paperwork required, such as filing tax returns.
Setting up a share portfolio doesn’t need to be onerous. It’s possible to start with a minimum investment of around $500, using one of the online share trading platforms. Then you could consider topping it up every year or so with a further investment.
Deciding on which shares to buy comes down to the amount you have available to invest and perhaps your child’s interests.
If the initial investment is relatively small, an exchange traded fund (ETF) may be a useful way of accessing the hundreds of companies, bonds, commodity or theme the fund invests in, providing a more diversified portfolio.
ETFs are available in Australian and international shares; different sectors of the share market, such as mining; precious metals and commodities, such as gold; foreign and crypto currencies; and fixed interest investments, such as bonds. You can also invest in themes such as sustainability or market sectors such as video games that may appeal to young people.
Alternatively, buying shares in one company that your child strongly identifies with – like a popular pizza delivery firm, a surf brand or a toy manufacturer – may help keep them interested and excited about market movements.
Since children cannot own shares in their own right, you may consider buying in your name with a plan to transfer the portfolio to the child when they turn 18. But be aware that you will pay capital gains tax (CGT) on any profits made and the investments will be assessable in your annual income tax return.
On the other hand, you could buy the shares in trust for the child. While you are considered the legal owner the child is the beneficial owner. That way, when the child turns 18, you can transfer the shares to their name without paying CGT. Your online trading platform will have easy steps to follow to set up an account in trust for a minor.
There is also some annual tax paperwork to consider.
You can apply for a tax file number (TFN) for the child and quote that when buying the shares. If you don’t quote a TFN, pay as you go tax will be withheld at 47 per cent from the unfranked amount of the dividend income. Be aware that if the shares earn more than $416 in a year, you will need to lodge a tax return for the child.
If you are not quite ready to invest cash but are keen to help your children to understand share investment, you could consider playing it safe by playing a sharemarket game, run by the ASX.
Participants invest $50,000 in virtual cash in the S&P/ASX200, a range of ETFs and a selection of companies. You can take part as an individual or a group and there is a chance to win prizes.
Another option, for children able to work independently, is the federal government money managed website. This is pitched at teens and provides a thorough grounding in savings and investment principles.
Call us if you would like to discuss how best to establish a share portfolio for your child, grandchild or a special young person in your life.
Suite 2, 1 Railway Crescent
Croydon, Victoria 3136
Email: integrityone@iplan.com.au
Telephone : 03 9723 0522
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Integrity One Planning Services Pty Ltd (ABN 59 125 846 933) is a Corporate Representative (315000) of Integrity Financial Planners Pty Ltd (AFSL No. 225051).