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About: Aussem

Aussem Mortgage Solutions is a Credit Representative (No 473191) of Red Rock Brokers Group Pty Ltd

Recent Posts by Aussem

Cost-Saving Strategies For Employee Benefits

Cost-Saving Strategies For Employee Benefits

Second only to payroll, a company’s benefits package is the most expensive item on the budget. Any cost-saving measures that can be applied to benefits can, therefore, have a significant impact on your bottom-line.

However, approaching the benefits package with only cost-savings in mind can be a disadvantage for your organisation. Benefits are one of the primary means that businesses use to attract top talent. A cost-saving strategy that may be saving you money on the face of it may mean you lose out on the skilled, experienced and qualified employees. At the same time, sacrificing that all-important bottom-line for the ability to attract and retain the best is not always plausible.

It’s all about achieving that perfect balance between offering an attractive benefits package while keeping the budget trimmed.

To find out how to achieve this balance, we asked the benefits experts – our employees – what a company can do to save money on their benefits package and found the following:

1. Re-consider Medical Insurance Plan Designs And The Cover They Offer

There is a wide variety of medical coverage option available that you can offer your employees that will attract and retain the best employees. Simply opting for the most expensive plan is however not necessary and can be costly.

Restructuring the different plan options available can ensure that your employees are not over-insured while offering them competitive benefits. Opting for health insurance through a local PEO (Professional Employer Organisation provides employers with access to a larger pool of plan designs from the top carriers to choose from. This is especially beneficial for small businesses or groups who would normally be subject to a community rating.

2.  Reconsider Employer Contributions

Employers offering medical insurance to their employees are required by law to pay a minimum contribution to their premiums. This is usually 50% of employee-only cover relevant to the lowest cost plan on offer.

Many employers choose to contribute more than this minimum to attract and retain talent. However, percentage-based contributions can become costly. The G&A Benefits Team suggest structuring benefits according to a set dollar amount rather than applying the equal contribution percentage strategy to every plan that is offered to employees. This way, the company will save money on contributions for employees who choose to enrol on the more expensive plans available to them. As long as the dollar amount meets the required minimum for employer contributions percentage, this is a fair and effective benefits cost-saving measure. Every employee receives instead of the same contribution to their medical plan no matter the plan they choose.

Business analysts at Credit Capital say, “no matter what plans your employees choose, the cost-to-company remains the same when you choose a set dollar contribution strategy instead of a percentage. This not only lowers medical contributions costs for the company but also makes the cost associated with the benefit far more predictable.”

3. Educate Employees About The Benefits Offering

It isn’t only employers who find benefits complicated and confusing. According to our Collective Health Poll, over 60% of respondents said that they find the benefits options confusing and that they don’t understand them.

Also, employees often feel pressured or rushed into deciding within the enrollment period which leads to them simply selecting an option that they are familiar and comfortable with. Offering multiple meetings to discuss different plan options that are available in detail throughout the year will keep employees informed and thinking about alternative plan options.

Taking the time to educate your employees on the different benefit options that are available to them will prevent them from choosing the wrong option and then complaining about it at a later date. It will also save your company money in the long run.

4. Tax Reductions

Salary sacrifice strategies, where employees are willing to forego a portion of their salary instead of non-cash benefits can provide huge cost-savings for an employer. These types of benefits often include gym memberships, travel cards, car schemes, childcare and so on.

 

This also has tax benefits for employers and employees. The lower their salary, the less you need to contribute towards taxes and national insurance on their behalf. You should, however, be aware that the government has introduced a tax on some benefits such as company cars and mobile phone packages. Make sure you choose salary sacrifice schemes that are tax-free to save costs for your company.

 

Increase your cash flow. Get your business going!

We’ll save you days of confusion and stress!

Aussem Mortgage Solutions offers you faster and easier funding from $5,000- $300,000.

TALK TO US- 0432 297 651

 

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5 Ways To Get Out Of Debt

5 Ways To Get Out Of Debt

It can be far too easy to find yourself in debt. Unfortunately, the same can’t be said for getting yourself out of it. It really doesn’t matter what your debt comes from, there is nothing “good” about debt and you have to pay it back either way.

Unfortunately, for many, they can find themselves paying off debt for the majority of their lives. Living with debt can place a lot of unnecessary stress on yourself not only due to the mental but also because of the financial burden.

Recent statistics reveal that there are 14,482,877 credit cards in Australia as of March 2020.

Some believe that you don’t have to simply accept living with debt and it doesn’t have to take you an entire lifetime to pay off.

Having a good action plan when it comes to getting out of debt and following it to a tee can help give you the right track to follow to successfully navigate yourself out of it. There are certain strategies that you will be able to leverage to speed things up. Below are 5 steps to getting yourself out of debt.

 1. Know The Numbers

As your debt continues to pile up, a lot of people look to avoid it entirely. After all, “out of sight, out of mind.” Thus, rather than confronting their debt head-on, they allow it to continue to spiral out of control. If you are looking to get yourself out of debt, the first thing you must do is make a list of everything you owe. Write down the following:

  • Who you owe
  • How much interest you owe
  • The total interest rate
  • The total payment amounts

Having a comprehensive list of everything you owe might make things real and scary, it can really help. By having everything written down, you will have all of the information you need to develop a strategy to pay everything off in its entirety.

 2. Track Your Finances

There are two main factors at play when it comes to paying off your debt.

  • First, you want to try to leverage the discretionary income you do have into paying off your debts before buying anything else.

 

  • Second, you want to avoid taking on additional debt if at all possible. While it is certainly easier said than done, anything you can put towards paying off your debt can do wonders.

 

Finance Analysts at Max Funding say,” by having a crystal clear understanding and overview of your finances, you will be able to figure out where you can start to cut down on your debt without negatively impacting other areas of your life. If you don’t currently budget, you can utilise budgeting software which can help you track everything accurately and make the entire process less time consuming and less of a burden.”

 3. Come Up With A Plan

As soon as you have written out all of your debts and once you have come up with a budget, you will be able to sort through which loans should be paid back first.Whether you want to pay off the home loan or auto loan first, there are two distinct strategies that you can consider:

 Debt Avalanche

This is the strategy of paying off all of the debt that you have that accrues the most interest. This is the strategy that is going to end up saving you the most money over the course of time.

Debt Snowball

This pay off strategy is when you focus on paying off your lowest balance first and continue to work your way up the ladder to your highest. This approach is much more likely to be mentally/psychologically rewarding as you will be able to completely cross off loans and debts earlier than you would with the avalanche method.

No matter which you end up choosing, as soon as you pay off a loan, you will want to utilise the money you would have spent on that loan for another debt on your list. You may even decide to mix the two strategies together and tackle some of the smaller debts first prior to paying off your debt that is accruing the highest interest rates.

4. Always Celebrate Your Wins

The entire process of getting out of debt can be long, tedious, and not fun at all. Because of this, keeping yourself motivated towards the end-goal isn’t the easiest task. As a result, you want to look to create smaller and attainable goals that you will be able to celebrate. By creating these smaller and attainable short term goals, you should be able to continue to give yourself the motivation you need to reach your ultimate end goal of being debt-free.

5. Get Out Of Debt

There are all kinds of things that you should be doing when you are looking to get out of debt quickly. Making significant lifestyle changes is one of the best things you can do to make big gains. You should consider implementing some of the following strategies:

Cut Back On Spending

To increase the amount of money you are able to put towards paying off your debt, you will need to spend less or make more money. You can do this by switching up your lifestyle and really finding small cuts you can make here and there.

Always Look For Deals

While you could cut back on your spending by simply spending less, you could also attempt to spend more wisely. Check to see what you are spending the most money on in terms of your necessities and try to score savings on those items that you are already buying. You can use coupons, shop during sales, or even buy in bulk to score deals.

Get Another Income

You can always try to add to your income. Either by finding another job, getting a second job, or even by doing a side hustle. By making more money, you will have a much easier time finding the extra money you can use to pay off your debt.

Refinance Your Debts

 If you have good credit now than you did before the loans, you will mostly be able to refinance to save big.

 Balance Transfers

If you qualify, you can find credit cards with a promotional rate of 0% for balance transfers. These cards can earn you extra time to pay off your debt without having to worry about high-interest rates.

By using the right strategies, you should be able to get out of debt quickly and get started on a better financial track. Use some of the tips above and you should be able to get started on your journey to finally being debt-free.

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Written By: Claire Dawson

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7 Reasons Why You Should Hire A Mortgage Broker

7 Reasons Why You Should Hire A Mortgage Broker

Applying for a home loan takes a lot of time and effort. However, with expert guidance and advice from a mortgage broker, you will be in a better position to find not only a lender but also a suitable loan without making expensive mistakes.

Wondering how a broker can help you? Here are seven ways.

1.    A broker clarifies details about the loan you want

How much can you save using an offset account? Will the lender accept your full doc loan? Which interest rates would suit your financial goals – variable, split rate, or fixed?

If you don’t know the answers to these questions, a broker will help you. Experts from Aussem Mortgage Solutions point out that “a broker has the knowledge and expertise to answer all questions you might have. This person will also be able to give you all the information that you probably don’t even know you need.”

2.    A broker gives you objective feedback

You should always have a clear idea of your financial status. You should know just how much you can afford for a loan and when you might exceed your budget.

A mortgage broker reviews your expenses, weekly payments, and income. Based on the review, you’ll get an honest feedback of your finances and what options you have as regards home loans.

3.    A broker simplifies the comparison process

The expert team at Credit Capital state that “comparing different home loans takes a great deal of time and effort. Hiring an experienced broker allows you to use your time on other, more important things.

Since a broker reviews your financial status, she or he has a clear idea which home loans fit your budget. On your behalf, the broker compares discounts, best deals, and various other things. Only the final comparison chart will be presented to you. This streamlines the process for you.

4.    A broker does the paperwork for you

This is probably the biggest reason why you should hire a mortgage broker. You don’t have to worry about handling the paperwork, application, settlement process, or legal work.

The broker takes care of these things on your behalf. All you need to do is focus on finding a house that you like.

5.    A broker helps any type of borrower, even non-traditional borrowers

If you have never taken a loan before, you might find the entire loan process complicated. Moreover, your credit score may be less than perfect. Your loan profile may not be like those of traditional borrowers.

The experts from Metro Bookkeeping say, “a mortgage broker helps you find loans that you will qualify for. The broker will also help you connect with lenders whose home loans do not have high interest rates. In this way, you will come across numerous specialist lenders and banks that have flexible lending policies.

6.    A broker helps you prepare for pre-approval

Ideally, every borrower wants the lender to pre-approve a loan. This allows you to know how much a lender will let you borrow. So, you can search for related properties within the price range that a lender states.

Since a broker handles all the paperwork, she or he can handle all the job on your behalf.

7.    A broker guides and supports you until your loan gets confirmed

As stated above, the entire process of applying for a home loan takes a significant amount of time and effort. However, if you have an expert by your side, the process becomes a lot easier.

A mortgage broker is an expert who knows the industry inside and out. So, a broker can guide you every step of the way and answer all your questions.

People say that an open mind helps you learn from the mistakes you make in life. However, getting a home loan doesn’t fall into this category.

You don’t want to make a mistake with a home loan because hundreds and thousands of dollars are at stake. A mortgage broker can prevent you from making a wrong move. A broker is the best person who can provide detailed information about the loan and explain the process so that you can buy your dream house soon.

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Small Business Loans: Tips

The 6 Most Important Tips You Need to Know

 

Are you looking to secure finance to help you grow your business?

Many business owners have a hard time getting approved for a business loan. But with a little education and support, you can get the funding you need without the headaches.

There are things you can do to increase your chances of obtaining a loan, some of which you might not even have thought of.

Basically, you must prove lenders that you are capable of making the repayments as scheduled.

If you’re currently seeking financing opportunities for your small business, you might have already considered applying for a loan. However, what could you do to increase your odds to secure a small business loan?

Here are 6 useful tips to provide you with better chances of obtaining a business loan.

#1 – Make sure you prepare everything in advance

You won’t be ready to apply for a business loan the very moment after you make this decision.

Securing a business loan requires thorough preparation to improve your chances of success. Make sure you do everything in your power to set your company on the right track from the very beginning.

Swami Mukti of Mukti Freedom Yoga practised yoga in India for 10 years before moving back to Australia to teach. “I studied under the direct guidance of a renowned guru and while at the Bihār School of Yoga, I was able to author a book on Swara Yoga. I’ve been very fortunate to have this foundation in the practice and it has been crucial to the creation of my studio. Making sure your foundation is strong will help you secure the loan when the time is right.

Aside from your industry expertise, there are two main things that lenders look at when it comes to loan applications: business profit and your personal finances. Start working towards:

  • improving your credit score
  • repaying your debts
  • and organising your accounting records long before you apply for a business loan

 

Prepare yourself to showcase your plans for growth and to explain your financial history. The more you open yourself to lenders, the better chances that your business appears professional and solid.

#2 – Acknowledge your risk

The true reason why small businesses have a hard time at obtaining a loan is that lending money to them is riskier than lending it to large and reputable corporations. Here are a few of the factors that contribute to this risk increase:

Low profit

New business

Poor credit score

Not enough collateral

Messy accounting records

According to the retail experts at Embrace, “new products are always a risk, but if you can prove that the potential of your business trumps the risks, then you can position yourself as an asset instead of a liability. This is only possible if you have a thorough understanding of the risk your business presents to lenders. It’s the only way you can build a solid defense once you’re negotiating your loan.

By showing a good awareness of your level of risk, you’ll decrease the chances that lenders point out the weak spots of your business.

#3 – Save money before considering a loan

Getting a loan and not being able to make repayments is a situation you should avoid at all costs.

One of the best small business loan tips is to save money for loan payments. Consider opening a business savings account and start saving, in order to be able to manage your first repayments. Putting together a repayment plan will show how you will use the loan and earn money to repay it.

Pearl Toh, the creator of Peal’s Creations, spent years building profitability and saving money before setting up shop. “I started selling jewelry through markets and shops on consignment. It was only after I’ve built up enough capital through my profits that I was able to set up my own website and shop online.

Many lenders want to know where repayments will come from before approving a small business for a loan. Non-cash collateral can be a good way to prove you can repay the loan.

Beware, though, you might lose some of your personal assets such as your car or even your home, should you fail to make repayments. Saving for repayments ahead of time protects you from using your personal assets as collateral.

#4 – Understand the different types of loans to choose the right one for your business

Always assess all of your available small business loan options.

The more you can learn about the different types of business loans, the more chances you have to get the right one for you. The best way to get a business loan is sometimes a matter of pursuing the right type of loan.

Long-term loans are larger sums you must pay back over very long periods of time with lower interest rates than short-term and term loans.

Have you measured the pros and cons of each loan type? Chat to an expert from Aussem to make better financial decisions.

Here are some additional factors to take into account:

  • Business lines of credit are loans you won’t have to repay unless you use the money.
  • Equipment financing is a loan aimed at purchasing new or used equipment.
  • Alternative financing solutions include sources of funding that don’t come from the bank.
  • Crowdfunding, cash advances and peer-to-peer loans are among the best examples of such financing solutions.
  • Car loans can be quick and come with varying repayment options.

 

#5 – Build relationships

Getting a startup business loan as a new business can be extremely difficult. You are a risk to lenders, as you can’t prove that your business will be profitable.

Building relationships with lenders long before considering a loan may increase your chances to obtain this loan. Take advantage of everything banks may be willing to offer you, including credit cards and business bank accounts. The more you work with the bank, the more their employees will trust you.

#6 – Don’t rush into accepting the first offer that comes your way

There are multiple types of business loans. Check out the offers of multiple lenders to find the right one for you. Compare the terms and conditions of all these options to choose the best one.

Keep track of lenders who have granted loans to businesses like yours. Always do your research in relationship to your own industry, size and profile of the business. Apply to three or four lenders that best suit you.

Ready to secure the small business loan you need? Speak to the experts from Aussem and get the fast, experienced help you need.

 

Author Bio: Fiona White

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Applying for a Car Loan? Here’s What You Need To Know

Applying for a Car Loan? Here’s What You Need To Know

Are you looking for finance to secure your dream car?

The first thing to note is that car loans are personal loans lent for the specific purpose of purchasing a car.

Every lender has their eligibility criteria that they attach to the loan they offer so that means that there are a number of factors that can impact your ability to gain a loan.

In relation to car loans, these can include taking into consideration the state of the vehicle (new or used), the purchase price, the age of the car, whether you are purchasing the car from the private seller or dealership, and much more.

With this in mind, you should conduct your research and find a loan provider and a loan that suits your needs and situation.

Like many other loans, vehicle loans are priced based on risk. You will likely have to pay a higher interest rate if lenders perceive you to be a high-risk applicant. Conversely, borrowers perceived to be lower risk are likely to be charged a lower interest rate.

There are mistakes to be avoided when applying for a mortgage, as well as when buying your first home. And car loans are no different.

So, are you ready to take up a loan?

Begin to check your credit file information and credit score before applying for a car loan. In doing so, ensure everything is error-free and up-to-date. Importantly, reviewing this information ensure you understand your standing before entering negotiations for a car loan.

When it comes to signing your contract, ensure you read the agreement carefully and in its entirety. Double-check everything and, most importantly, read the fine print.

Secured Car Loans

For secure car loans, the borrower needs to offer an asset as the security for the loan. In the case of car loans, security is the car itself.

In cases where borrowers fail to repay their loans, lenders have the right to repossess the security (the car), sell it, and recover their money. In the event the resale value of the vehicle is not enough to pay off the car in full, borrowers are still obligated to repay the remaining amount.

In the case of secure car loans, it is common practice for lenders to require you to take out a comprehensive car insurance covers on the car used as security.

According to the team at Domain Roofing, choosing the right loan type is key. They explain “we use vehicles in our line of work every day. So while a car is necessary, we would need to make sure the loan fit our needs. It’s important not to rush into loans to get a deal, if it can come back to bite you down the line.”

Unsecured Car Loan

For unsecured loans, borrowers do not have to offer security to lenders. This type of loan is typically provided for purchases of older used cars as they tend to have a low resale value.

For this kind of loan, you have to convince the lender of your good financial standing, that you are creditworthy, and therefore, able to repay the loan. Given the unsecured nature of the loan and the lender taking on a higher risk, they will usually charge a higher interest rate.

In the event you fail to repay the loan, the lender has the right to take legal action against you to recover their money.

Other Types Of Car Financing

Specialist Financing

You can get car financing from non-traditional lenders as well. Such lenders include specialist financiers who offer car loans, hire purchase agreements, car leases, business financiers, and equipment financiers.

Just like any other loan, before you sign the agreement, ensure you read the contract carefully and thoroughly.

The finance experts explains, “The most important thing to note when applying for an equipment loan, car loan or similar is the collateral being used to secure your loan. If you are a small business this can have a huge impact on your success should you be unable to pay.”

In addition to this, you need to understand the fees payable, the interest rate charged, the repayment terms and conditions, and any additional terms and conditions may be applicable.

For instance, check with the lender whether a balloon payment is due at the end of your loan term. Balloon payments are lump sum payments due at the end of a loan term that makes regular repayment cheaper.

Dealer Financing

When purchasing your car from a dealer, many will offer to arrange the financing for you.

Undoubtedly, getting everything in one place is convenient.

The small business owners at Driveway Doctors rely on their vehicle for their business, so the right financing is crucial. They had this to say, “Our car is essential in getting us from job to job, so we wanted to get the best deal on our finance for something we use so regularly. As tempting as opting for the simplest package might be, it definitely pays to spend time researching all your options.”

It is essential to note, in this case, that the dealer will receive a commission from the finance company. Consequently, most auto dealers will try to sell you add-ons that you do not need to increase the sale price.

Additionally, it is necessary to check the interest rates and compare with other auto dealers and loan providers.

Ask the dealer whether there is a possibility to negotiate the terms of financing, making sure the possible financing option is available on the car model and brand you intend to purchase.

Is A Variable Or Fixed Car Loan right for you?

The vast majority of car loans lenders charge a fixed interest rate. However, some lenders charge a variable interest rate.

Repayments on fixed car loans do not change throughout the loan term even when the interest rate fluctuates. As such, fixed interest rates are easier to budget monthly. The only downside is that some lenders will charge a fee for early repayments and extra repayments.

This is important to consider if you believe you will be able to pay off your loan early.

Local entrepreneurs from Any Rubbish are aware of this and had this to say, “You would assume that paying off a loan early would be a good thing, but that is not always the case. Extra fees charged for early payments can put an added financial strain on your business, simply by trying to be proactive in your payments. It’s important to ask your lender if they have this policy, so you can decide how you would like to pay off your loan”

Repayments on a variable loan changes from time to time as influenced by interest rates. Variable car loans do allow borrowers to make extra repayments and or repay your loan early without incurring penalties. However, such loans are harder to budget for every month.

Fees

– Establishment Fees

Most lenders will charge borrowers a one-off establishment or application fee once you accept the loan. The fee covers the cost of arranging for and administering the loan.

–      Ongoing Fees

Some lenders charge a regular and ongoing administration and or service fee to cover the cost of loan administration and maintenance. Such fees are charged on a yearly, quarterly, or monthly basis.

–      Early Exit Fees

Some lenders charge borrowers early exit fees for repaying all of the loan or part of it before the end of the loan term. If you plan to repay your most or all of your loan early, check if the lender charges an early exit fee and how much it is. Ensure the benefit of making early repayment do not cancel out with the fees.

As you can see, there are a number of different options when it comes to taking out a car loan. Although this can seem overwhelming, once you start doing your research on these options and understand how to calculate your borrowing power you will be much more confident that you are receiving the best possible loan option.

Now, it’s time to get started on your financing process and watch yourself get even closer to that dream car you’ve had your eye on.

Need help with financing? Speak to the experts at Aussem Mortgage Solutions and get the experienced help you need!

 Author Bio:

Phil Randall
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7 Common Mistakes First-Home Buyers Should Avoid

Are you looking to buy your first home?

It isn’t easy to find an affordable home for first-home buyers.

Whether it’s an old apartment or a new one or a house in the outer suburbs, many first-home buyers tend to make a few common mistakes when they are caught up in the excitement of buying their first home.

Here is a list of some of the most common mistakes made by first-time homebuyers you should avoid when buying your first home.

Ready to learn more about getting started in property investment? Check out the beginner’s guide here.

Mistake #1 – House Hunting without pre-approval

It’s not enough to just qualify for a home loan.

It is important to visit the lenders and ask them about the maximum amount they can lend before you go out and start looking at properties.

Knowing your upper limit will help you focus only on houses you can afford and allow you to avoid the disappointment of finding that perfect home and learning that you can’t afford it.

Mistake #2 – Not Understanding Mortgage Options

It’s true that getting a home loan is easier today as compared to earlier times as most people had to save for many years in order to have enough for the down payment.

While it is easier today, you also need to keep in mind that it might be more expensive and also riskier.

When you take a no deposit home loan, you also have to pay for mortgage insurance. You need to check with different lenders and discuss in detail all the options available to you before coming to a decision.

In some cases, it might be better to make a deposit while saving on the ongoing cost of mortgage insurance.

According to Sydney PPC marketer and homeowner Michael May, it pays to do your homework. He explains “with so much information available online it’s tempting to close your eyes and pick the simplest option. But what looks good upfront can actually end up being worse for you in the long run. I recommend chatting with a professional team like Aussem who can layout your options in a simple and clear manner. You’ll be thankful you did when it’s all said and done.”

Mistake #3 – Borrowing Too Much Money

One of the most common mistakes made by first-time buyers is that they end up borrowing too much money.

If you borrow to your financial limit, it might stretch your finances and you might not be able to make any improvements to the property. In fact, you might end up not enjoying the life in your first home due to financial issues.

Also, you might have to sell your house before building any substantial equity in case you have to face any unforeseen financial problems.

Mistake #4 – Relying on Others

Many first home buyers make the mistake of relying extensively on the local real estate agencies. Instead, it’s recommended to do independent research and have a pre-proactive approach when it comes to house hunting. It’s easy to find auction results online and in the local paper.

Take a note of the auction results and narrow your search to the suburbs and streets where you would want to buy a house and in this manner, it will be easy for you to find the selling price of properties in that area.

It will allow you to make a realistic counteroffer to the vendor’s agent (always working on behalf of their clients) when they quote a price. In case you decide to buy your first home at auction, you will save quite a bit of money.

Mistake #5 – Buying a Property without Pre-purchase Inspection

When it comes to the best real estate deals, you’ll find that these happen to be older homes that need minor renovations and cosmetic repairs.

On the other hand, the worst real estate deals also tend to be older homes that require expensive major repairs. These expensive repair jobs are typically not visible on the surface.

According to plumbing experts, “avoiding a pre-purchase inspection report will save you some money but don’t forget that getting an inspection report from one of the many independent building inspectors also has the potential to save a lot of money once you move into the home. It is also recommended to get a pest inspection done to be on the safe side.”

Mistake #6 – Not Accounting for Other Costs

Don’t forget that you will have to pay for other things in addition to the cost of the house.

This is a commonly overlooked aspect of first home ownership according to the roofing team at CM Roofing Services. They explain “some of these additional costs include the cost of moving, stamp duty, transfer fees, council rates, inspection reports as well as home insurance and – what we see often – home upgrades. It might turn out to be a fatal mistake when you simply don’t take into account or underestimate these costs.”

It’s important to be sure about the costs of moving into a new home in order to prepare a budget. You will sleep well when you don’t have any unexpected financial issues on moving into your first home.

Mistake #7 – Making an Emotional Decision

For most first-home buyers, it’s an emotional experience and sometimes, people let emotions get the better of them.

You should think like a professional home renovators who only take into account their ROI when it comes to buying a house. When a professional renovator doesn’t find an offer attractive due to low ROI, they simply walk away and this is what you should do.

Feeling ready to avoid these common mistakes? Check out the 6 BIGGEST mortgage mistakes to avoid and stay on top of your finances.

Final Thoughts

If you avoid the above-mentioned common mistakes, it might take some time to find your first-home but the effort will be worth it.

It will allow you to build your future on a foundation that is as firm as the foundation of a well-built home.

While finding your first home can be a challenge, by avoiding these 7 common mistakes, you’ll streamline the process and wake up in your dream home before you know it.

Looking for help on your journey to home ownership?

Speak to the friendly team at Aussem today and get the help you need.

Author Bio

Fiona White is an Australian freelance writer and Sydney-based university student. As an Accounting student, she has a passion for learning about global changes in business culture and specialises in entrepreneurship and innovation-related topics. When Fiona isn’t at her desk, you’ll find her exploring National Parks.

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Six Biggest Mortgage Mistakes to Avoid in 2019

Are you looking to secure a mortgage on your dream home or investment property in 2019?

While mortgages are one of the most significant purchases you’ll make in your life, there are many ways to streamline the process and save money.

Still, mortgage mistakes are often made by borrowers despite many ways that they can be avoided. Whether you’re just getting started in the property market, or looking to add to an existing property portfolio, it pays to be educated.

So if you’re looking to secure a mortgage without any added headaches (or financial mistakes) here’s what you need to know.

Start By Figuring Out What Type of Borrower You Are

Before borrowing any money for the purchase of a property, questions should always be asked first.

You must determine which borrower type you are first.

This can be done by looking at the circumstances of your life. Taking into account whether you are buying a home for the first time, investing in a new home, or even refinancing will reveal a borrower type and will lead you to question what the goal you plan to accomplish is.

In 2019, the mortgage market is currently full of mortgage products. Your chosen broker should be able to find a product to suit your needs if you know your borrower type.

The following six mistakes are ones that are often made by borrowers.

1. Sticking With A Bank And Forgetting The Mortgage

You should never force yourself to only use products from one lender, and you shouldn’t forget to review your mortgage regularly. Robinson Accounting, an accounting team who have experience managing the finance of home buyers, says that loyalty to one bank is something that people think they have to practice. Often times, these banks may only have a limited selection of products.

They explain “brokers on the other hand, have a wide variety of products that can be useful for your particular situation. Finding out just how competitive your mortgage is in the current market is something that should be done regularly.”

Lenders will often have different costs for refinancing, but it can be possible to get a lower interest rate and get that money back as time passes.

2. Going With A Mortgage Just Because of The Interest Rate It Has

Interest rates for home loans are looking pretty attractive these days. The rates are lower now than they’ve ever been, but that doesn’t mean you should instantly jump on them. There is a downside associated with simply selecting a mortgage that looks better than the others.

The circumstances for which the loan needs to be applied and the loan’s features are the most important things to think about. For a better comparison of mortgage interest rates, comparison rates should be looked at because they include fees, discounts, and other rates.

3. Not Taking The Time to Prepare

When it comes to mortgages, those who have knowledge and their paperwork in order have all of the power.

Around 16,000 brokers are part of the mortgage broking industry, and those who have a faster and easier time getting a mortgage are often the applicants that have well organised documents.

That paperwork with all of your financial details should be ready when applying for a mortgage.

The value of preparation is emphasised by entrepreneur Pearl, who runs cake making business Pearl’s Creations. She explains, “my home is also my place of work. For this reason I had to make sure the process of finding the right property and applying for a mortgage did not receive setbacks – otherwise I risked setting back my business. By asking your broker upfront how much paperwork you’ll need, you can avoid any last minute missteps.”

4. Ignoring The Structure of A Mortgage

There are some mortgages that are simply bare bones with no additions. Others come with additional content, such as credit cards, redraw facilities, and even offset accounts.

You have to choose a product that fits your needs. The broker or bank who is guiding you can help you choose between interest only and interest and principal structures.

Choosing the wrong structure is a common mistake that can affect tax deductibility in more ways than one.

5. Going With A Fixed Term Without Knowing If It’s Needed

If you have to break a fixed-term interest rate mortgage for any reason, you may be faced with costs in the thousands. Only get a fixed-term mortgage when it necessary.

For those who need to stick within a certain budget, fixing the interest rate of a mortgage will be a preferred option. For some, it is a good choice, but for others, it’s not a wise decision, because a period of five years is a long time to be stuck on a fixed term.

6. Going in Without Getting A Pre-approval Done

When borrowing money for a property purchase, it shouldn’t be assumed that a pre-approval has already been given unless the lender specifically writes it.

Although borrowing calculators and other tools can be used to create borrowing figures, banks will want to know more before they lend out their money.

Chiropractor Keith Maitland recommends factoring in your income to ensure your pre-approval process is a success. He says “your income will impact both your pre-approval chances and your ability to successfully pay your repayments, so it should be central to your mortgage process. If you have a promotion in the future it may even be worth your while to wait until your income changes if it helps your application process.”

Did we miss any valuable mortgage mistakes to avoid in 2019?

Write in the comments below about any mortgage mistakes you’ve made in the past and how to avoid them.

 

Author Bio

Fiona White is an Australian freelance writer and Sydney-based university student. As an accounting student, she has a passion for learning about global changes in business culture and specialises in entrepreneurship and innovation-related topics. When Fiona isn’t at her desk, you’ll find him exploring National Parks.

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Getting Started in Property Investment: The Beginners Guide

Getting Started in Property Investment: The Beginners Guide

Are you looking to turn a dream of property ownership into reality?

Property investment may seem like a big leap at first.

But with some careful preparation and expert advice, you can invest in property with confidence. While there will always be obstacles to overcome in the Australian housing and property market, by knowing what to expect and how to position yourself for success, you can take the steps you need today to wake up in your dream property tomorrow.

Don’t do a single thing without reading this beginner’s guide to investing in property in Australia.

1. Be Clear About Your Real Estate Goals

Being clear about your real estate investment goals is the first step to become a successful investor. Preparing yourself to invest in real estate can be a real challenge at times. You should be aware of your emotions because you cannot become successful in real estate investment with emotions running high.

The property you plan to invest in isn’t a property that you plan to live in. So you don’t need to feel a personal connection with the property. The return the property will give you is more important than the property itself.

Decide what your end goal is – whether it’s capital gain, cash flow, a home for your family or something else. You should create a plan to get to the goal once you have decided upon the final goal. You should have a realistic timeframe for this purpose. Make sure you review the plan on a regular basis since the property market will often change.

2. Decide On The Ideal Property Type

If you plan to invest in an investment property, you should look for something that will give you a high rental demand. You should do enough research to see what type of property that the renters are snapping up quickly and what property is languishing on the market. Do you plan to go for something that is a renovator’s delight or market-ready property or do you plan to invest in an apartment? It is a dream come through if you are able to buy a property that you can rent out immediately.

But you shouldn’t discount the properties with minor renovations. According to the renovation experts from KJ Concreting, “the amount you invest in renovating the house can be recuperated within a short period of time with higher rental returns. Look out for houses that stand out from the pack with a special feature such as a second bathroom, good outdoor space or a garage. These extra features will let the property stand out in the real estate market.”

3. Zero In On Your Location

Location is the most important factor to consider when investing in property. You will have to narrow down your search to find the best location before investing in real estate.

Which areas are performing well in the rental market right now? Are local property prices increasing at the moment? You should separate the heart and head when investing in real estate property.

Consider the distance between your chosen property and the city centre or the local business area. How far is the nearest public transport?

Are there local shops within walking distance? Check the proximity to schools.

These are important things to consider when investing in real estate.

According to the home renovation experts at Glen Gilbertson Floor Sanding, it also pays to do your homework, they note “areas that may look as though they don’t offer amenities may be hotspots for growth in the future. Enquiring about plans for the future, especially in regards to major developments, can help you snap up a bargain that will return major dividends.”

4. Get Your Finances In Order

Speak with a mortgage broker to get free advice on a mortgage loan. Make sure you check how the loan repayments would correspond with your likely rental returns. You should be 100% clean on what your upper limit is – after taking all extra costs into consideration such as conveyance, insurance, inspections, taxes, and property management. You should have a financial buffer in case there are months where your property is vacant.

The experts at Metro Bookkeeping offer an exclusive tip, explaining “getting your finances in order requires a 5 step plan. First create a budget, next save money by starting with a narrow focus and expanding as you build discipline, automate your finances so the decision is out of your hands, pay off high-interest debt first, and finally set a long term goal and start working towards it.”

You should set up the purchase so that it benefits you the most when investing in real estate in Australia. You can purchase the property in your name through the superannuation fund or a trust. But you should also understand how the purchase will affect you and your family. You should get expert advice in order to make a smart choice in this regard.

5. Succeeding In Your Investment

Learning the basics of real estate investment can be a real challenge. Although there are real estate investment opportunities available out there, some market conditions can be more favourable than others. Timing is the key to your success. You are making a big decision when you decide to invest in real estate. So you need to get expert advice for the process.

You should get in touch with an experienced financial service provider who is able to advise you on all aspects of real estate investment. In fact, it’s hard to find good accountants, financial planners, real estate agents, lawyers, conveyancers, valuers, and other professionals. But these are the professionals who can help you to make the best decisions when investing in real estate in Australia

Author Bio

Fiona White is an Australian freelance writer and Sydney-based university student. As an accounting student, she has a passion for learning about global changes in business culture and specialises in entrepreneurship and innovation-related topics. When Fiona isn’t at her desk, you’ll find him exploring National Parks.

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Top ten tips for first home buyers

Top ten tips for first home buyers

It is a long journey from saving up the first deposit to actually owning your own home, but it is certainly a rewarding one! Your first property is an important financial and emotional investment into your future, so you want to make the most of every opportunity to make your dream home a reality.

Start budgeting like a home owner

The journey starts with saving for your deposit. This takes a great deal of discipline, especially in the beginning when the dream of owning a home seems so far away. Once you own your home, you won’t have so much disposable income, so start limiting your disposable income now, and put this money aside to build your deposit. And when you establish a realistic and practical budget, you will have a better idea of what you can afford once you take on a mortgage.

Save the biggest deposit possible

The larger your deposit, the more equity you will have in your property right from the beginning. This also means you are paying less interest. Place your growing savings into a fixed term deposit or a high interest savings account so you can grow your deposit through accumulated interest.

A larger deposit will also have the bonus of making lenders look more favourably on your loan application. When they see that you are disciplined and committed to owning a home, they will know you are a good risk.

Minimize your debt

Accumulating debt through credit cards can undermine all your efforts to save up for a deposit. When you are ready to apply for a home loan, the lender will be examining your credit history, so if you do have ongoing debt, stay on schedule with payments so your credit rating is not adversely affected.  Cut down on the credit card use, and pay off your car and any personal loans so you can concentrate on saving for your first deposit.

Remember to calculate the costs of purchase

Once you feel you have saved a sufficient deposit to buy the property you want, don’t forget to double check your figures to make sure you can also afford all the related purchasing costs. Many first home buyers disregard or under-estimate expenses such as inspection reports, stamp duty, Lenders Mortgage Insurance (LMI) and legal costs. When you fail to account for these expenses, you run the risk of reducing your deposit when you are ready to buy.

Stay within your means

House hunting can be an extremely emotive business and it is easy to get carried away about a dream property and forget that you can’t actually afford it. You need to maintain strict self-discipline so you don’t become tempted to purchase a property that is priced beyond your means.

Apply for the First Home Owners Grant early

The First Home Owners Grant is a government initiative designed to assist Australians in purchasing their first home. This grant can save you thousands in fees and duties. The conditions and benefits vary from state to state so visit the First Home Owner Grant website to learn how this can help you.

Research incentives and concessions

Each Australian state and territory also offer their own incentives and grants to first home buyers, including stamp duty concessions. So it pays to do your research on what financial assistance you are eligible to receive where you live.

Choose a property that suits your needs

Stay objective when you are looking at houses, and write up a list covering all the essential requirements of your ideal property. The list will generally centre on property size, location and price, although you may have other key requirements that need to be included on the list. You can also include a list of “wants” but these should be negotiable.

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Tax Guidance and Lessons for the Self Employed

Are you fully educated on your tax rights and responsibilities?

Not being up to date could mean missing out on benefits, and putting yourself in trouble too.

At times navigating tax obligations for being self-employed can be confusing.

It doesn’t have to be.

Knowing your responsibilities is the first step to making your obligations feel less of a burden, and will allow you to focus on your business more instead of a spreadsheet.

Tax was never meant to be fun, but it can be easier to understand with the right guidance and the right approach.

So if you’re a self-employed entrepreneur looking to take control of your own tax at the end of the financial year, here’s what you need to know.

 

Your Tax Responsibilities Will Depend on Your Business Structure

 

How you pay tax as a business will depend on how your business is structured.

●    SOLE TRADER

As a sole trader, there’s no difference between your business assets and your personal ones. Your tax liabilities are therefore the same. Any income earned is subject to the same tax brackets as if you were a regular employee, including the tax-free threshold.

For this reason, it’s a good idea to make a habit of putting some funds away for your tax payments which will increase due to income gained through your business activities.

Remember to keep your business and personal expenses separate though as this causes less confusion.

●    COMPANY

The other main business structure the Australian Taxation Office (ATO) recognises is that of a company. This is important to recognise as a company is taxed separately to that of a sole trader.

Deductions are allowable for companies, but this form of business structure has many levels.

As a result, taxation for companies is more complex, with many happily relying on approved tax agents to help them navigate the obstacles that come with corporate tax rules.

Ultimately, it pays to know where you fit in. Choosing a business structure is like choosing a property, there are many pros and cons so it pays to think ahead. In terms of your taxation responsibilities, it is important to understand your obligations to ensure you don’t find yourself in trouble come tax time.

Understanding Deductions

Understanding your full deduction rights can help you save money come the end of the financial year.

According to the team at Northern Rivers Demolition, sole traders may be missing out on potential deductions, saying “just like an employee, as a sole trader can claim a range of deductions for expenses incurred whilst running your business. As long as these deductions are a true reflection of expenses incurred for the running of your enterprise, the amount of tax you pay can be reduced.”

One point to keep in mind is that any money drawn from the company cannot be seen as a deduction.

The ATO explains this, saying “amounts taken from the business are not wages for tax purposes, even if you think of them as wages”.

Personal Service Income (PIS) and the “gig economy” is here to stay. PSI is defined as the income from a contract where you’ve earned as a result of skills, knowledge, or expertise.

Freelance writers, copywriters, consultants or specialist trainers can be considered PSI income earners for taxation purposes.

The ATO ruling is now quite specific, stating, “If you’re paid mostly for your personal efforts, skills or expertise, you might be receiving personal services income (PSI) and you may have to treat deductions in relation to this income differently”.

Understanding the GST

Both sole traders and companies are required to pay GST on earnings over $75,000 per year.

Generally, GST is paid quarterly, so it makes sense to plan for the inevitable. Making regular payments into a bank account is the simplest way to ensure you do not fall behind.

It is worthy of mentioning the obligation for those with alternative employment. One example of a new industry in question is the increasing presence of Uber or other ride-sharing drivers.

The GST laws for a regular business earning over $75,000 do not apply to these types of business. So if this is you, it would be beneficial to get some advice from a professional tax advisor.

Reporting

Get into a habit of tracking your expenses and income. Keeping records and receipts is as important as the understanding of what you can and cannot claim.

Don’t forget to split your personal and business expenses. How you do this is up to you, but the days of shoeboxes filled with random pieces of fading paper are over.

According to the finance experts at Empowered Finance, electronic record keeping is central to staying out of trouble at tax time, explaining “storing your financial data electronically protects your business by centralising tax records and necessary figures. Even better, these solutions are more cost-effective than traditional paperwork storage so you end up saving money too.”

If you are old school, a decent ledger book will suffice, however, it is recommended that you make a move to a program designed specifically to help you. If you’re not software savvy, there is plenty of help online available a few clicks away.

 

Staying Informed

According to personal finance experts Maxiron Capital, “while staying informed may be the last thing on your list of tax do’s and don’ts, keeping aware of the latest tax changes and rules in your industry it just as important as any other tool. New and proposed changes to legislature and policy can affect the independent contractor and any self-employed person’s financial future.”

As we move through changing economies, this type of important taxation information allows you to make plans for your business.

While very few business owners set out to land on the wrong side of the taxation laws, ignorance is no excuse so it’s worth your while to stay on top of the changes in your industry.

Where Can I Find Help?

There are many avenues for help for the self-employed business owners of Australia

While initial tax obligations may seem daunting, with the right education and experience you can make sure you stay on the right side of the law and maximise your returns come tax time.

If you require help in regards to your finance as a self employed business owner, reach out and speak to the professionals today.

Author Bio:

Fiona White is an Australian freelance writer and Sydney-based university student. As an Accounting student, she has a passion for learning about global changes in business culture and specialises in entrepreneurship and innovation-related topics. When Fiona isn’t at his desk, you’ll find her exploring National Parks.

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