Bringing It All Into Perspective

There is a lot of conjecture out there in the market about the ability of young people today being able to afford a mortgage. After reading this you may just believe that the truth Is – it’s all in how you manage your money in the first place. Surprise! Surprise! Nothing has changed about that in hundreds of years.

Easy Money

Over the years, as the public began to be aware that investing in property was a good thing, a new industry blossomed. Mortgages!

With large tax incentives all round, a bricks and mortar asset to insure against to satisfy your lending institution and you could easily be on the way to having your first – or fifth – or tenth mortgage, often at 100% of the purchase price, sometimes more.

The institutions, whilst still canny with their money, are more than willing to loan money for all sorts of things and this is where the trap lies. Twenty-somethings are investing in loans or higher credit card debt more than ever before.

Most people will be unaware that the repayments on a $20,000 credit card will be around the $600 mark per month. If you have a personal loan for $20,000, for a motor vehicle as an example, you are looking straight down the barrel of a $500 monthly repayment.

Amazing Mortgage Fact

Now check out this last little bit of data.

Did you know that the repayments on a $100,000 mortgage, 4.5% interest over 25 years is just $555 per month? Amazing.

The two debts mentioned above are relatively small on their own. Together, however, they can have a big impact on just how much money you can borrow for a mortgage. A bank will automatically cut your borrowing power by up to $200,000 as soon as it sees debt like this.

This is where Fountain Property Group like to help flesh out the details for you. We see a lot of disappointed faces in this business. It is amazing how this form of debt can reduce your service ability.

When we are educating our clients. We ask the hard questions like …In the short term, can you see the value in catching the train for a little while? To get that extra money for your mortgage is it worth forgoing the stereo or is it worth giving up your trip to Greece? You may answer yes or no to these questions. There is no right or wrong answer. The choice, however, will determine your living arrangements for a long, long time to come.

Low Interest Rates Continue – Let’s Party

Here in Australia we are so lucky to continue to experience low interest rates. Long gone are the days of escalating rates that took people’s homes and livelihoods away from them.

Through careful observation the Reserve Bank of Australia continues to monitor and control the rates we pay on our mortgages and keeps them as low as possible.

We are not suggesting for one minute that it is a good idea to go out and blow any spare cash you have. This is not what we recommend when we say – Let’s Party!

Rather, we are thinking more along the lines of:
1. Let’s get into the market and take full advantage of this great situation
2. Pay down your current mortgage as quickly as possible and then do the first point.

Now this is something to celebrate!
Imagine if you can, being able to pay down your mortgage in under five years. If this is your plan you could not hope for a better environment to do it in than when rates are low.

Once you have your money under control (and not the other way down) you free up your cash to do something worthwhile. Think of holidays, restaurants and theme parks with the children. Perhaps do a course and learn something new or even get into an investment property.

Property Investment – The Greatest Nest Egg
If you are dreaming of building a nest egg for you and your family then now is the best time to dive in.

The persistently low interest rates make it easy for you to move into the investment scene and build an empire to sustain you and your crew.

Fountain Property Group specialise in sourcing exactly what you need and can afford. We are not bound by territories and boundaries and are able to search for that unique and perfect investment wherever the market may take us.

Whether you are dipping your toe into this amazing, fortune building environment for the first time or you are a seasoned professional, we are able to source and provide the right property at the right price.

Whilst the days of escalating interest rates are long gone, they are not forgotten and they still provide the angst to deter and even stop an investor in his or her tracks.

It is essential that due diligence is conducted for each and every property that is considered. We do all the hard work for you and take the stress out of the decision making phase.

AU Homes Reaches $1 Million Mark

Australian home prices have reached the $1 million mark, according to the Finder website.

Mortgages below $500,000 will have to spend $1 million for a 30 year loan at a variable interest rate of 5.5%. Purchasing property with a small deposit may cause people to spend more than the value increase in a 30 year span, which is why it is advised to look into how much you spend in the long term, apart from being able to afford the loan.

Sydney still leads all capital cities in median house price at $825,000 according to a recent RP Data CoreLogic report.

Read more about this on the Australian Property Investor website.

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