Ask Heidi Blog
Renovating can become a nightmare if things go south.
What may have started out as a simple project, can become extremely complicated and expensive if you haven’t done the research or have the right tools for the job.
If you are looking to take on a DIY renovation project of your own, it wouldn’t hurt to get a little help. Listed below are the top 4 apps which may make your renovation project a little easier.
Dulux MyColour AU
If you are looking to create new colour schemes for your home, but don’t know where to start, this app could be useful.
This app allows you to take photos and will then give you a matching colour palette. This is perfect to match your furniture with a colour scheme.
Features for the app include: instant colouring scheming for when you are out shopping, video demonstrations and you can even order Dulux paint samples right to your door.
Houzz Interior Design Ideas
Be inspired with over 2,000,000 home design ideas in this one app. You are able to browse by room location and style and then create a virtual idea book with your favourite designs. If you’re in the middle of a project and need help, join in on the discussion and get tips and advice from other designers, contractors and architects.
This is a great app if you are looking to do major renovations or add-ons. All you need to do is snap a few photos of each corner of the room and the app will use your phone’s camera, compass and GPS to create a floor plan with the dimensions included.
You don’t have to worry about measuring, drawing or using complicated software to create a floor plan of your home.
Snap Send Solve
If you’ve found issues on or near your property, such as public trees affecting your property, damage to the footpaths or graffiti, how would you fix the problem? The Snap Send Solve app makes it easy to notify your local council in under a minute.
Simply take a photo with this app and send it through with a description. This app will then figure out your location and send it to your local council.
It’s no secret that New Year’s resolutions don’t always last. Every year, Australians make a promise to lose that extra weight, take up a new hobby or save more money, telling themselves that this year will be different.
However, out of the 50% of Australians who make a new year’s resolution, 88 per cent don’t continue.
But with so many different technologies being introduced each year, it is becoming harder to make excuses for not sticking with your new goals.
Phone apps allow you to manage your new year’s resolutions in the palm of your hand and it is not hard to find a good app that costs less than a gold coin.
This app has a range of features to help you gain control of your money. You are able to record expenses such as your household budget, costs for special events, work expenses and regular cash expenses, such as takeaway lunches, that you may forget to include in your budget. This is a great tool which will give you a good idea of your spending habits.
You are also able to create a spending limit, view expense history, add tags to categorise expenses and also create reminders for payments due. It is often the small, re-occurring costs such as food and drinks that can end up affecting your budget and this app will make it easier for you to track it. Get the app here.
Late or missed repayments can have a detrimental effect on your credit report, so if you find that you often miss the due date for bills, you may find this app very useful.
This app gives reminders for bill due dates, and also enable you to pay straight from a bank account or credit card or you can schedule a payment for the future. You are able to connect all of your accounts to this one app so you can easily review all of them in one place. Get the app here.
Find My ATM
According to RateCity.com.au, four in 10 Australian ATM transactions are made on ATMs that belong to institutions other than their own. In 2012, Australian spent $670 million on ATM fees.
Avoid paying these excessive fees with the Find My ATM app. If you need an ATM, simply enter the bank you want, choose an ATM and you will be given directions, no matter where you are. Get the app here.
Coles & Woolworths App
Do you find that after grocery shopping, you often come home with more than what is on the list? These apps can help you to reign in your grocery expenses. Both of these apps can let you create a shopping list, search for weekly specials and even create a ‘shopping trip guide’ so you only have to go down the aisles you need to.
You can even avoid the grocery store all together by having your order delivered at a time that suits you. It’s the perfect way to avoid making unnecessary impulse buys. Click here to get the Coles & Woolworths app.
As a buyer, you are putting a lot of trust into the property inspector, but how do you know for sure that they are providing a legitimate report unless you ask the questions.
Not only will asking questions give you peace of mind about their qualifications and experience, but it will also keep them honest throughout the inspection process.
This is also a great checklist to help you compare different companies.
1. How long has the business been operating for?
The longer the business has been around for the better. You may even be able to get a referral from one of their previous customers. It would also be worth it to see if they are a part of any continuous training programs. This will show that they are committed to staying up to date with requirements. You could also look online at their website and social media sites to see if what they are saying is correct.
2. What will it cost?
This is a particularly important question if you are on a tight budget. There is nothing worse than having a number in your head and then when it comes time to pay, the price is double, even triple what you expected. If the inspector gives you a number in the beginning, you will know what work you can or can’t afford. It will also help keep the inspector on track.
3. What qualifications do they have?
Find out how long they have been doing inspections and what qualification they have. Pest inspectors usually need to be licenced to do so but building inspectors may just have their building licence. You want to ensure you are getting an accurate report on the state of the house so the more experience they can demonstrate the better.
4. What is included in the report?
By asking this question before they start, you can use it as a checklist when looking through the finished report. This also gives you the chance to add in any other areas you would like to have checked. Asking for a sample report is a great way to see how detailed the inspector is and will give you an idea of what to expect.
5. What is the waiting time for receiving the report?
This will give you a timeframe to work with and will also give the inspector a deadline so you will not be waiting for weeks. Some inspectors can give a verbal report on the day of the inspection. This can be helpful for you as the inspection will be fresh in their mind and they can relay specific details, so it’s worth it to see if they can give you a call after the inspection.
A property inspection could affect the asking price of the property, so it is important that the inspection is done thoroughly. These questions are just a guide, so if there are more questions specific to the property you are looking at, make sure to ask them.
The ability to save money plays a big part in applying for a home loan, not only to provide sufficient funds for the deposit but to demonstrate that you can meet the repayments down the track.
Even if someone is giving you a gift to help with the costs upfront for the purchase, genuine savings has a purpose of proving that you are responsible with your money and have sufficient left over after your living expenses to manage the mortgage repayments.
What are genuine savings?
Lenders have a specific definition of how they evidence genuine savings. It has to add to a percentage of the purchase price (usually 5%) that has been saved over a certain time period. Three months savings statements will be required to demonstrate this amount building up and being held in an account in your name. It is usually a requirement when you are borrowing over 80% of the property value. However, different lenders may have different lending criteria, so before applying for a home loan, make sure you check with your lender on what is required.
Some examples of genuine savings include:
- Funds that are regularly saved in a savings account
- Term Deposit
- Equity in an existing property
Although genuine savings are a requirement for lenders, it is also a great learning tool for you as it will help you learn how to budget for the mortgage repayments down the track.
What are non-genuine savings?
Non-genuine savings are contributions that were not saved by you. Some examples include:
- First Home Owners Grant
- Proceeds from a sale of an asset like a car or boat
- Borrowed funds (personal loan)
In order to be more competitive in the industry, many lenders are offering non genuine savings home loan products. These types of home loans are usually suitable for borrowers who are ready to purchase, have a non-genuine deposit saved (eg. gift from parents) and don’t want to wait the three months to accumulate their own savings.
Although these products can be beneficial for those who don’t have genuine savings, there are certain restrictions. Lenders may consider you a ‘higher risk’ borrower and may put provisions in place such as a risk fee or a higher interest rate, which could end up costing you more for the life of the loan.
A mortgage is a long term investment, so before opting for a non-genuine savings loan, make sure you consider if it is the right option for you long term. You may find it is worth waiting the extra three months if it saves you thousands over the next 30 years.
Social media is becoming more prominent in many industries, including the property market. But are 140 characters enough to sell a home?
More home owners are starting to use social media sites such as Facebook, Twitter, Pinterest and Instagram, as well as blogging, to attract home buyers and sell their home.
There are several benefits to advertising property on social media. Firstly, it can create a more personal attachment for potential buyers. For example, potential buyers will most likely be able to relate to the home owner’s photos and personal opinions better than a real estate agent’s standard property description. Also, potential home buyers can ask the vendor their own questions.
Another benefit of advertising on social media is that you can reach a larger pool of potential buyers. Take a look at your group of followers on all of your social media profiles and then imagine how many more buyers would see your post if it was shared. It doesn’t take long for information to be shared between a large number of users – and it won’t cost you any extra money. Hash tags play a huge part in social media, so to help people find your property, use descriptive hash tags.
Tips for using social media
Avoid becoming a spammer
Although you want to appeal to as many buyers as possible, keep in mind that you may become a nuisance for your friends and family if you post about your property too much.
High quality is essential
If you are not using photographs that are clear and good quality or not taking the time to write informative, thought-provoking content, then you could be shooting yourself in the foot. Even though social media may be considered a more relaxed form of communication, potential buyers will still expect that your advertisements give a detailed and realistic overview of the property. Take a look at how other vendors and real estate agents advertise their properties on social media to see what works and what doesn’t.
Appeal to your type of buyer
If you have a particular type of buyer in mind (eg. a family) then your blogs and posts will need to appeal to them. If you are appealing to families, make sure you add photos of nearby parks or schools to show prospective buyers it is a great place to raise children. If your property is near a university and you are appealing to students, take photos of nearby cafes, shops, beaches and, of course, the university.
Don’t forget the professional.
It is still important to employ the help of a professional to ensure the advertisements are administered correctly. Your real estate agent can make sure the property is not misrepresented and can also help you answer any enquiries from potential buyers.
Social media can be a powerful tool for advertising your home. It can connect you to a whole new pool of interested buyers just through the power of sharing. However, it can also be damaging when the proper precautions aren’t taken.
The New Year sparks a new beginning for many. You may have new goals to achieve and challenges to overcome.
If you are considering investing in property next year, you need to make sure you are ready for the commitment.
There are several signs which may indicate you are ready to jump into the property market. These include:
You’re financially stable
There is often periods of time when things are unstable. This could include changing jobs rapidly, having a baby and going back to one income for a period or large expenses hitting like having to replace a car before you were planning etc. At other times it is smooth sailing, with a stable career, good income and a solid savings pattern. All these things are a good sign for you and your lender that you might be in a position to purchase property.
When you apply for a home loan, your repayment history will also be an important factor so if you have been paying bills and other financial commitments on time without any problems, it will improve your financial credibility.
It is important to remember that even if you are planning to use the rental income from the new investment property to help meet the repayments on the mortgage, you need to plan for the potential for some vacancy periods where you will have to cover the mortgage repayments without it.
You have clear goals
Do you know where you want to be in the next 10, 20 and 30 years both personally and financially? For example, knowing whether you want consistent rental income or long term capital growth will affect the type of property you look for. Also, if you have a goal to retire at a certain age and live off the rental income, it may affect the type of home loan you’ll need. For example, if you are looking to pay off the home loan quickly, you may opt for a principle and interest repayments over a shorter loan term, with features such as unlimited extra repayments, an offset account and free redraw.
You have an expert team
There are several experts that can help you purchase and manage your property. Although you may not need all of them, it is still worth considering each one. Your team might consist of:
• Mortgage lender
• Financial Planner
• Property Manager
Before you purchase an investment property, take time to research each one of these to see if it would be beneficial for you to have them on board.
You have been doing your research
Investing in property is not a decision you should make on a whim. Although property investing can help put you in a better financial position, it can go terribly wrong if you don’t do your research.
If property investing has been on your mind for the past few months or years and you have been researching home loans, properties and locations, this will help you make an informed decision about when and where to buy. There are plenty of tools online to help you compare different properties and locations. An example is our free property report that provides details of actual property sales, rent returns and demographics for your suburb.
Being in debt can be a good thing if it is able to put you in a better financial position.
There is the risk though that even with “good debt” that you can over commit and bury yourself in debt. This may mean that you may need to limit the number of financial commitments you take on. Too many financial commitments cannot only have a negative effect on your finances, but it can start to impact other aspects of your life.
So how do you know if you have too many financial commitments?
You don’t know how much you owe
Being able to state how much you owe for each commitment is a good start to keeping them under control. Spending further on a credit card without knowing how close you are to the limit is a sure sign you not in total control.
You should also be regularly tracking your bills to ensure you have enough money for the repayments. Checking the bill thoroughly is also important. Companies can make mistakes, so if they accidentally charge you extra and you don’t check your bill properly, it will be you that is out of pocket. Ignoring bills and paying them late can indicate that you are overcommitted and worse still it could impact your credit record if it goes on for too long. Recent changes to credit reporting to be introduced soon mean that when you apply for credit the lender will be able to view the repayment history on all your commitments.
Can only afford minimum repayments
Minimum repayments are designed to cover the interest accrued plus only a small percentage of the actual amount you owe. If you find that you can only afford the minimum amount, you may have too many commitments. In order to pay off the debt quickly and avoid being stuck with the repayments for years, increasing the repayment beyond the minimum is a great start.
Cannot get new credit
Your financial commitments affect your credit score, so the more debt you have, the harder it may be to obtain new credit. When you apply for a new loan, the credit provider will need to see that you can afford the extra repayments. If you have been declined a credit provider, make sure you enquire as to why your application was unacceptable. This will give you valuable insight into what caused the issue so that you can remedy it or avoid applying for credit until it is past.
You borrow money to repay bills
This is a definite sign that you are in over your head. If you are unable to afford your living expenses with your income, you will need to cut down on your financial commitments. Borrowing money to pay bills can become a vicious cycle that will only bury you deeper into debt. Consolidating debts by increasing your home loan to pay them out or by rolling them into a credit card or loan with a low interest rate will only work to save you money if you actually work to pay them off quickly.
Expiring interest free facilities
Interest free deals can be a good idea if you have the funds to pay it off in full as soon as it expires. Most come with very high interest rates at expiry so what seemed like a good idea 12 or 18 months ago could end up costing you a lot in interest. You don’t know what the future holds and what will be happening in the future that may mean that you don’t have the funds to pay it off. Also be careful when signing up. Check the monthly service fees that are charged as they could equate to interest that is just called something else. Put the funds away to pay it off so that when it expires you can pay it in full.
You cannot save money
Savings can act as a buffer if the unexpected happens, like if you lose your job or a major unexpected expense comes along. Consistently saving a proportion of your income will help provide peace of mind. A lack of savings can happen for a number of reasons but if there is nothing left over after each pay then it may indicate that you are over committed and you have a problem. Look at your expenditure and what you can trim in order to start saving.
Your finances are affecting other aspects of your life
Continually worrying about your finances can have a negative effect on your lifestyle. Worrying about how you are going to pay the bills may start to affect your performance at work, your mood at home and even your sleeping patterns.
If you do have too many financial commitments, it is important to do something about it to avoid becoming overwhelmed with debt.
- List all of your ongoing expenses and start the process of elimination. Start by looking at contracts that are easier to cancel such as gym memberships, paid TV and phone plans. Unlike other commitments such as personal, car and home loans, these contracts can usually be cancelled quickly, immediately releasing some financial pressure.
- Prioritise your bills. Start by choosing the debt with the highest interest rate and start putting any extra money towards paying it off.
- Get professional help. There are financial experts, such as accountants and financial advisers, who deal with debt every day and can help create a personalised plan for you.
Do you know what’s on the menu for Christmas this year?
If you are looking to add wow factor this festive season, take a look at Heidi’s top 10 recipe ideas for inspirations. From starters to mains and of course all the sweet treats, we’ve found them all.
1. Berry Christmas Pavlova
You know you're in Australia when pavlova is on the menu. The mixture of sweet meringue and tangy berries is a perfect Christmas day dessert. Get the recipe here.
2. Strawberry Christmas Tree Brownies
They may look fancy, but they are quick and simple to make, with a sweet strawberry surprise in the middle. Get the recipe here.
3. Christmas Package cheese snack
All wrapped up in a neat little package - You can never have too many cheese and crackers on Christmas day. Get the recipe here.
4. Velvet Christmas Cupcakes
Share this delicious treat in a jar with your family and friends. Get the recipe here.
5. Fruit Christmas Tree
This is a great idea to add a healthy option to the table. All you need is a styrofoam cone, some toothpicks and your favourite pieces of fruit. Get the recipe here.
6. Sushi Tree
For something a little different, roll up your favourite sushi and stack them in the shape of a Christmas tree for a festive touch. Get the recipe here.
7. Christmas Royals
These little Christmas pudding look-a-likes and they are the perfect sweet snack for parties and only take 10 minutes to make. Get the recipe here.
8. Christmas Crunch Bark
Add some crunch to the dessert menu with this easy to make crunch bark. Get the recipe here.
9. Peppermint Hot Chocolate
A minty twist to the classic favourite. Get the recipe here.
10. Christmas Trifle
This trifle is a guaranteed time-saver. It can be prepared earlier and kept in the fridge until it's time for dessert! Get the recipe here.
Renovating for profit can be a risky venture if it is not thought through carefully. You may think that all renovations will increase the property’s value by that amount, but that isn’t always true.
There are plenty of changes and additions you can make which usually add value. Some examples include adding in a second bathroom or upgrading the kitchen. But what improvements are on the “may not add value” list?
Most Australians love the idea of having a pool, especially in the warmer months. However, when it comes to maintaining and cleaning the pool, you may find that most people don’t want to put in the effort. According to a recent survey by Aussie, when looking at homes to purchase or rent, only 11.3% of Australians look for a home with a pool. This is only a small percentage of potential home buyers and renters you will be appealing to.
It is usually all those extra costs that add up when you install a pool so it is important add these all up when you are crunching the numbers. These include fencing and any other safety requirements as well as tiling, pool cover, cleaner, lighting, heating and pool maintenance products. A swimming pool will, on average, cost you in excess of $30,000 to install.
If you are selling it may take longer to find the right buyer that is prepared to pay what you spent on the pool. More often than not sellers have to reduce the selling price which means that they don’t get the full value for what they have spent.
Property investors may also steer away as swimming pools can be considered a safety risk and something extra that a tenant has to maintain to keep it in good condition. Therefore, having a swimming pool may mean that it is predominantly owner occupied buyers that will be interested further limiting the pool of potential buyers.
Although landscaping plays a big part in the first impression appeal, which is important for attracting buyers, it may not add value to the property if it is too “over the top”.
Studies show that landscaping can add up to 12.7% to the value of a home, if done properly. If you are planning to plant trees, shrubs and other plants in the garden, remember to leave room for them to grow. If they are too close together, it won’t take long for the garden to look choked and overgrown. You also need to create a landscape that suits your climate zone. If you live in an area that has warm weather all year around (e.g. Northern Territory,) there is no point in planting flowers and shrubs that can’t handle heat.
A deck or patio has the potential to increase property value as it offers an additional living space all year round and the average cost for an outdoor deck or patio is $2,000-$8,000.
Not everyone enjoys gardening and may cringe at the thought of spending their spare time weeding and pruning. It is often the simple, tidy gardens that buyers find most appealing as the house will still look attractive, but will only require minimal effort.
To ensure you don’t overcapitalise when renovating, it is best not to spend more than 5% of the purchase price on upgrades. According to realestate.com.au, a well-planned renovation can add up to 10% to the value of your home, particularly if you have the property for over five years.
Firstly, there are a number of projects that can be expensive and the buyers may not even notice the change. Although upgrades to amenities such as air conditioning and plumbing may need to be upgraded to keep the house in working order, don’t expect buyers to pay extra for it. Most buyers will consider these things to be regular parts of the house and shouldn’t have to pay extra for it.
Also, your renovation project may become trickier if you are fixing up an older house. If you are only planning on renovating one or two rooms, you will need to be careful about what rooms you choose. The kitchen and bathroom are usually the most popular choice for renovations. According to Sydney Property Finders, in order to avoid overspending on room renovations, home owners should follow the following rules of thumb:
• Kitchen: Between 4% and 6% of the property value.
• Bathroom: Between 2% and 3% of the property value
If you are upgrading an older house, renovating the kitchen or bathroom may not increase the property’s value if the rest of the house looks dated. So, before you begin renovating, take a look at the house design as a whole and see how you can have one clear design throughout the whole house.
It will be beneficial before beginning to have a certain type of buyer in mind (eg. families, couples) to help keep cohesiveness. Remember, the more neutral the house design is, the better chance you will have at appealing to a larger pool of buyers.
It's Friday the 13th! So we have listed the top 13 things that could potentially damage your home loan application.
Take a look at what could be unlucky:
1. Large credit card limits: Credit cards can greatly affect your serviceability and the more credit cards you have and the larger the limit, the more damage it can do. Even if you have $0 owing on the cards, the lender will still assess your application using the credit card limits. Therefore, if you have a large credit card debt, the best thing you can do is pay off as much owing as you can, reduce the limit and if you have cards that you are not using, cancel them.
2. Large personal debt: The more financial commitments and personal debt you have, the greater impact it will have on your application. Personal loans are known for having high interest rates, so it is in your best interest to try and reduce any debt as much as possible. Other ongoing commitments such as phone contracts and gym memberships could also impact the cash available to make home loan repayments.
3. Changing jobs: Starting a new job in a different position or a different industry could create problems. You may find that some lenders will be cautious when using your income if you are on a probationary period. If you are looking to purchase a property in the near future, it is best to stay in your current job until your loan has been finalised.
4. Going part time or becoming a contractor: If you decide to work less hours, the lender may have to reassess you on that income. If you decide to become a contractor, you may be assessed as being self-employed and need two years tax returns to show how much you earn after expenses. So even if you are earning more money by being a contractor, it may not have the effect you want when it comes to a home loan.
5. Unpaid maternity leave: You may not realise that lenders will be unable to use any part of your salary if you are not going to be paid for a few months during maternity leave. If you are planning maternity leave, you need to show that you are going to be receiving income for the whole time that you are away, not just part of the time.
6. Interest free deals: Even if you are planning to pay off the purchase before the expiry date, lenders will still treat this just like any other debt. Once you have paid it out, be sure to close the facility as while ever it is still open, it is still a debt in the eyes of lenders.
7. Shopping around for loan options: Although it is important compare lenders, if you submit applications to several different lenders at once, these will appear on your credit report. Lenders don’t know if this enquiry resulted in you taking the loan, changing your mind or being declined. Lots of credit enquiries will result in the lender being more cautious.
8. Going overseas: Going overseas during the purchase and settlement period could be problematic. During this time you may need to deal with lenders, real estate agents and solicitors and if the purchase is delayed, you could be faced with some expensive penalty interest expenses if no one is able to contact you to resolve the issue.
9. No savings: If you are a first home buyer, you will need to show that you can save for a deposit. If you already have a property, you can use the proceeds from sale or equity for a deposit, but if you are able to show that you can genuinely save money, it will improve your chances of getting a competitive home loan.
10. Bad repayment history: In March 2014, changes to the Privacy Act will mean that lenders can see the past 24 months of your repayment history. So, if you have been late or missed repayments on any of your debts in the past, it will affect you home loan application. However, it is never too late to make a change. If you can start being diligent with your repayments from now on, it will show the lender that you are making an effort to change your habits.
11. Not disclosing all information: It is important that you disclose all relevant information in the beginning. If you don’t, it is more than likely that the lender will uncover credit cards, other debts or issues during the process and it may put you in a bad position due to non-disclosure. Understandably, there may be certain things you have forgotten about, so before speaking with your lender, make a list of all of your financial information and commitments to ensure you don’t forget anything.
12. Choosing a ‘risky’ property: There are certain types of properties lenders consider riskier than others which could result in your application being declined or certain provisions being put in place, such as higher interest rates. Make sure you speak with your lender about your property to ensure it is suitable.
13. Not getting pre-approved for a home loan: Many home buyers have made the mistake of making an offer on a property without getting their finances pre-approved. They then find out they cannot afford the property or it takes too long to get finance approved and by then their dream home has been snapped up by someone else who had their finances in order and could exchange contracts quicker. Therefore, if you are planning to go house hunting, make sure you have organised a pre-approval beforehand so you know what your limits are.