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HOW DOES NEGATIVE GEARING WORK Your Content Goes Here “Gearing,” by definition, simply means to borrow money to buy an asset. For instance, when you take out a loan to buy a property, that’s gearing. Basically, there are three types of gearing: Negative gearing, where the interest you’re paying on the loan you took out is greater than the income you’re getting from the property you purchased. In other words, you’re operating at a loss. Neutral gearing, where the interest you’re paying is the same as the income you’re getting. Positive gearing, where the property you just purchased [...]

THE DISADVANTAGES OF INVESTING IN CASH Your Content Goes Here Low interest rates are generally good for mortgage holders – it means people are more likely to pay on time and take out more loans. But if you’ve made cash investments, such as in term deposits and savings accounts, low interest rates actually work to your disadvantage. Now, investing in cash is a good way to diversify your portfolio, and as a result give you some much-needed peace of mind. But at the same time, it pays to check the numbers and see whether cash investments will actually [...]

WHAT TO EXPECT AFTER YOUR LOAN REQUEST IS APPROVED Your Content Goes Here After your home loan is advanced, your first repayment will be due exactly one month after. If you worked with Freedom Lend and they opened an offset account for you, the repayments will be drawn from this account unless you say otherwise. In any case, always be sure your repayment account has enough funds to cover the next repayment. You may also inform your employer to deposit your salary directly into this new account to simplify the process. Now what if you wanted to change [...]

WHAT IS CAPITAL GAINS TAX, AND WHERE DOES IT APPLY? Your Content Goes Here Capital Gains Tax is basically the tax you pay when you make a capital gain, or when you sell an asset after its value increases over time. If you’re just getting into the property industry and have been hearing the acronym “CGT” a lot, it simply means Capital Gains Tax. The term ‘asset’ can mean shares of stock, vacant land, business premises, holiday homes, and (very commonly in the property industry) rental property. Whenever an asset is disposed (sold), the fees that go with [...]

HOW TO REFINANCE YOUR HOME LOAN | FOLLOW THESE STEPS: Your Content Goes Here Refinancing a mortgage could be a great option for you if you plan to change jobs, borrow money for home improvement, or want a lower interest rate. Here are steps you can follow when switching to a new lender. 1. Know the Expected Total Cost of Your Refinance Refinancing could potentially save you thousands of dollars. Make sure to calculate all the fees involved to see if you could save more money through refinancing or changing mortgage lenders. Ask yourself, “Are there [...]

HOW TO CHANGE HOME LOAN BANKS IN 3 SIMPLE STEPS Your Content Goes Here You might think switching banks is too difficult, but it does not have to be that way. In this article, find out how to change your bank and take advantage of the best possible home loan by following these three easy steps. 1. Write down your requirements. Think of what services and products you want from a new lender. Below are some of the things you could consider: • Great customer service team • More flexibility in terms of payment schemes and [...]

5 PRO TIPS TO PAY OFF YOUR HOME LOAN Your Content Goes Here Tip #1: Pick the right loan for your needs. Do you want the option to repay the whole loan earlier than expected? If so, then a variable-rate loan may be the better choice, as they tend to be more flexible than fixed-rate loans. Loans with fixed rates tend to have stiffer payment options and penalties. Tip #2: Make your repayments more frequently. It’s generally a good idea to pay every two weeks instead of every month, as it shortens both the payment [...]

WHAT YOU'RE REALLY PAYING FOR WHEN BUYING A PROPERTY Your Content Goes Here When you want to buy a property, you have two approaches to choose from: (1) You can set a budget for the initial deposit and start saving up towards that, or (2) you can find out how much you’ll need to buy the property, and get your relatives to help you out as guarantors. Ideally, shoot to cover a 20% deposit… plus the following extras. Extra #1: Stamp Duty Stamp duty refers to the tax levied on the paperwork involved in the purchase, [...]

How your Credit Card can affect your Home Loan Application Your Content Goes Here Your credit card will affect your loan application. Unfortunately, most borrowers assume it will not affect their borrowing capacity because they pay off their credit card debt every month. This article will explain how your credit card will lower your borrowing power, as well as what you can do about it. Common misconceptions of borrowers: “It’s okay to have many credit cards. It means I’m a low-risk borrower.” “Paying my card balance monthly will help improve my borrowing power.” “I don’t use my credit [...]

DOES MY PROPERTY QUALITY FOR TAX DEPRECIATION 2016 Your Content Goes Here Can I Deduct Depreciation on my Investment Property? Tax depreciation helps property investors save significantly on taxes. However, not all property investors take full advantage of the tax savings available to them. To help you make a wise decision, here are some important points about tax depreciation. Types of Tax Depreciation Capital works deduction and ‘plant and equipment’ depreciation are the two types of tax depreciations that are offered to property investors. Capital works deduction includes building structural improvements, like embankments, retaining walls, [...]