Insurance and protecting your family home

Why do I need life and income protection insurance?

One of the questions Mortgage Brokers ask clients is whether they are insured – not just car insurance or house insurance (which everyone should have by the way) but life insurance and income protection insurance.  Brokers are obliged to get clients thinking about how they would pay for their mortgage in a worst case scenario.

No one likes to think about it, but what would happen if something happened to you? Either an accident or an illness that meant that you were unable to work or worse permanently incapacitated or even deceased? In this situation, how would you ensure that your family could continue to meet loan repayments and stay living in the family home?

It is important to note that a qualified insurance professional will be able to tailor your insurance to meet your individual circumstances. As with all things in life, if you want the best outcome you need to seek the best advice.

Here are some of the types of insurance available which can assist in providing security for you and your family:

 

1) Income Protection Insurance

Also known as salary continuance, Income Protection Insurance provides a means by which some of your income can continue to be paid to you in the event of illness or injury for a period of time to allow for recuperation. It is especially valuable for individuals whose business or income relies heavily on their own skills and ability to perform duties. Most policies will cover up to 75% of Gross (before tax) income and will be limited to a timeframe of around 2 years. The precise terms will vary from policy to policy and on how much the premiums are.

 

2) Total and Permanent Disability Insurance

In the event that you are seriously injured or sick and cannot perform your income producing activities for an extended period of time, Total and Permanent Disability Insurance may provide a means through which you can continue to support yourself and your family.   The precise terms of a policy, including what constitutes Permanent Disability will vary across different insurance providers. It is best to consult an expert in this field who will be able to provide the alternative that is best for you and your circumstances.

 

3) Life Insurance

It’s not a topic we like to give much thought too, however what would happen if you were to pass away. If you die with financial obligations such as a mortgage or other loans, then those left grieving may also be responsible for the ongoing repayments. Life insurance can be taken out to ensure that if you were to pass away that your loved ones would receive payment to enable them to continue to pay the mortgage, school fees or life’s other costs.Costs of these policies will vary and are generally defined by the waiting period to receive benefits and the benefit that will be applied. A qualified insurance professional will guide you through the options.

4) Home Loan Insurance

Providers like the ALI Group provide Insurance specifically related to your home loan. This cover means that they will pay your home loan in the event that you are unable to due to some unforeseen event (usually sickness or death). This type of cover may be in conjunction with other insurances but more specifically relates to your mortgage commitment.  This insurance is available through your Mortgage Broker

 

Now I’m feeling a bit worried…

It’s often uncomfortable to think about worst case scenarios and to sweep the thought ‘under the carpet’. Addressing your insurance needs shouldn’t make you worry though, it should actually provide you and your family with peace of mind. With the right policies in place, there are ways to ensure that life’s unexpected events need not be catastrophic to your personal finances and future lifestyle.

It is best to speak with a good Financial Planner about your insurance requirements as sometimes what you have through Super may not be sufficient. If you would like to speak with an expert, please get in touch and we can point you in the right direction.

 

You can contact Doug at (e) douglas.piening@choicehomeloans.com.au or (m)  0408 671 524.

Douglas Piening is a Mortgage and Finance Broker with Choice Home Loans and is passionate about providing clients with lending advice they can trust. Whether it’s re-financing an existing property, buying a new or next home, or investing, he brings a wealth of knowledge and expertise to assisting clients with their lending needs. 

Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.

This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.

Want to knock down and build multiple dwellings?

As the population in our major cities continues to grow and with the centralisation of the workforce there is an increasing trend toward greater density of population and smaller households. What does this mean? It means where there used to be warehouses there are now blocks of apartments and where there used to be a single family home, now there are quite often two or more dwellings on the site.

If you are thinking of knocking down an old house and re-building multiple dwellings, there are a number of considerations that should be taken into account.

 

Where do I start?

It is important to get a few good people in your corner.

  • A property surveyor or town planning consultant should be able to guide you through the initial stages and help you navigate approvals and town planning
  • A good Mortgage Broker will be able to provide guidance on the best options to finance your project.
  • A reputable builder who has experience with this type of construction will help you avoid some pitfalls.
  • A Real Estate Agent with expertise in the local market will know what price your property can achieve

There will no doubt be some challenges (there nearly always is!) but it can be a worthwhile and profitable exercise if undertaken properly.

 

Size does matter

The size and dimension of a block will be a major determinant on what type of multi dwelling structure (if any) can be built on the block. Setbacks (how far back from the street a dwelling must be) as well as Easements (property clear ways) and Covenants (restrictions on use) must all be well understood. Council Planners will have guidelines on exactly what can and cannot be done on a particular block.

The location of driveways, height restrictions and limits on size per dwelling will all have a major impact on the viability of the project.

 

Do the economics stack up?

Some back of the envelope number crunching will be able to tell you whether or not what you are looking at is viable. Know your costs and build in a buffer. Do your research into what Townhouses and Units are selling for and it is essential to know what your land is worth.  A Real Estate Agent will be able to help you estimate the selling price for the property once it is built or you can engage the services of a Property Valuation service.  Winston Lo from Hot Spot Property agrees “There can be a great deal of value created with the right kind of build and the right location, but it can be a costly mistake if you don’t get it right.”

 

Quality considerations

Depending on whether you want to live in or sell a particular dwelling will influence the decisions you make in relation to the property fit out. If you have a passion for pink, then by all means fit out your pad in the shades that you desire, however if you are selling, then maybe neutral tones are a bit wiser.  Same theory applies for your choice of fittings, blinds, flooring and the like – generally steer away from the more divisive styles and stick with more popular ones, even if they aren’t necessarily to your own taste!

 

Standard build or custom designer?

Your budget and quality considerations will influence whether or not you engage an architect to plan and design the property of your dreams or select from designs that are already in existence. Builders such as Metricon and Porter Davis have options for builders which offer standardized designs and supporting service, however with minimal modifications at a relatively low cost compared to alternatives that are custom designed.  If you are targeting a higher end sale, then a more custom designed property with all the bells and whistles may be more what you’re after.

 

Is the Taxman going to be interested in this?

If you have previously lived in the property before knocking it down, part of your project may be exempt from Capital Gains Tax.  Narelle Pasavento from Prosper Advisory advises clients on these matters “There are a range of income tax, capital gains tax and GST issues that need to be considered when thinking about building/developing. In many circumstances some profits can be subject to income tax.   It is important to speak to an Accountant early as everyone’s circumstances are different.”

 

Getting approvals

Every council will have rules and regulations around what can and can’t be done with your knockdown and multiple dwelling. This includes building permits, demolition permits, dual occupancy permits and sub-division permits.  A building surveyor or planning consultant will be able to guide you through the process, or your builder if you have engaged one will be able to assist.

 

Will I be able to get Finance?

Unless you are in the fortunate position of not needing it, you will need to go through the process of obtaining finance for your build. Some lenders specialize in lending for these kinds of projects and your Mortgage Broker will be able to help you find the best lender and the best rate for your project.  The valuation for the project is key to determining the funding available and will depend on the value of the land, the cost of the build and the quality of the fittings used.

 

 

Interested in a knock down and build?

If you want to talk through options you can get in touch for a free, no obligation chat.  

You can contact Doug at (e) douglas.piening@choicehomeloans.com.au or (m)  0408 671 524.

 

Douglas Piening is a Mortgage and Finance Broker with Choice Home Loans and is passionate about providing clients with lending advice they can trust. Whether it’s re-financing an existing property, buying a new or next home, or investing, he brings a wealth of knowledge and expertise to assisting clients with their lending needs. 

Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.

This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.

Why would you use a Mortgage Broker?

Research has revealed that 53% of Australian’s now use a mortgage broker for their lending needs, up from 35% ten years ago. So why are Australian’s increasingly using the services of a broker?

 

1) A choice of lenders

With an extensive panel of lenders (including the major banks), mortgage brokers are able to compare hundreds of loans to find a loan that gives you the best fit for what you need. If you go direct to a bank, they will only show you their lending products. Better choice across the whole market = a better loan and interest rate tailored to your needs. Here is the panel of lenders that we have at Choice Home Loans.

 

2) To save time

With today’s increasingly busy lifestyles you probably don’t have hours to devote to ‘shopping around’ to find the best loan and to go back and forth to a bank. Mortgage brokers are customer service focussed and most will come to you at a time and place that suits you – whether that is at home or work, during or after hours.

 

3) It’s free and could save you money

There is no cost to you for the services of a broker. Brokers get paid commission on loans from lenders, but regardless of whether you go direct to the bank or through a broker, the interest rate and fees to you will be the same. Very often, given brokers knowledge of the lending market and the access they have to special lending deals – using a broker can get you a better interest rate than going direct. Last year our clients who refinanced saved on average $3,800 a year in interest, a huge saving from finding a better rate in the market.

 

4) They are finance experts 

Mortgage brokers are experts in financing options, with an in depth understanding of the overwhelming array of loan options available. Many loans seem to offer a great deal, but they could have penalties, fees and charges you may not be aware of, or they may not offer the flexibility you require in the future. Mortgage brokers ensure that you find the best loan for your specific requirements, now and into the future.

 

5) They are with you for the loan and beyond 

Unlike constantly changing bank staff, Mortgage Brokers are often with you for the life of your loan and beyond. Mortgage Brokers usually own their own businesses and are committed to their clients for the long term, keeping in touch to make sure your loans are still right for you and that circumstances haven’t changed. How often does the bank call to tell you that interest rates have changed and you can get a better deal? Probably not often! But don’t be surprised if this is something your broker does.

 

There are significant advantages to using a mortgage broker. Whether you have an existing loan which needs a health check to see if it’s still the right fit and the best interest rate, or you are in the market for a first or next home, or it’s time to stretch yourself and get an investment loan – it’s a great idea to get in touch with your mortgage broker.

 

Douglas Piening is a Mortgage and Finance Broker with Choice Home Loans and is passionate about providing clients with lending advice they can trust. Whether it’s re-financing an existing property, buying a new or next home, or investing, he brings a wealth of knowledge and expertise to assisting clients with their lending needs. 

For specialist lending advice, you can contact Doug at (e) douglas.piening@choicehomeloans.com.au or (m)  0408 671 524.

Want to hear what clients have said about working with Doug? Take a look at these reviews from LinkedIn and Facebook.

 

This information is of a general nature only and does not constitute professional advice. You should always seek professional advice in relation to your particular circumstances.

 

Direct to the bank? Or through a Broker?

Research has revealed that 53% of Australian’s now engage a mortgage broker, up from 35% ten years ago.

So why is it that Australian’s are increasingly turning to the services of a broker over going direct to lenders?

 

To save Time

With today’s increasingly busy lifestyles people don’t have hours and hours to devote to shopping around to find the best loan. With an extensive panel of lenders, brokers are able to compare hundreds of loans to find a loan that suits your needs, saving you from having to do all that groundwork yourself.

 

Industry expertise

Mortgage brokers are the experts in financing options, with an in depth understanding of the overwhelming array of loan options available. Many loans seem to offer a great deal, but they could have penalties, fees and charges you may not be aware of, or they may not offer the flexibility you require in the future. Mortgage brokers are there to ensure that you find the best loan for your specific requirements, now and into the future.

 

A smoother process

A broker will help you source the most appropriate type of mortgage, manage the paperwork and keep you updated during the whole mortgage process. They navigate you through the whole mortgage process and beyond, providing you with one single centralised contact point along the way. They will meet with you at a time and a place that is convenient to you, wherever and whenever that may be. 

 

There is no cost

Whether you go directly to a lender, or through a broker, there is no additional cost to you for the services of a broker. Lenders pay brokers commission for the loans they write, but the rate to you will be the same whether your loan is through a broker, or direct.

 

Accreditation

MFAA approved mortgage brokers are bound by strict standards of professionalism, ethics and education. They are required to undergo continuous professional development and adhere to a professional code of conduct. Dealing with an approved, registered broker brings peace of mind.

All in all, it is easy to see why so many Australian’s are opting to use a mortgage broker.

Next time you are in the market to refinance your existing loans, for a new home loan, investment loan or a ‘home health check’, please don’t hesitate to get in touch for a no obligation discussion.