Surf2Summit

Teaching children financial lessons

Dean Denaro — Fri, 19 Sep 2014 10:25:14 +0000

To help their children live financially fit lives, parents need to set the tone – and the earlier, the better.
Parents are the main influencers when it comes to instilling efficient financial habits in children1, so how can we prepare the younger members of our family to manage their money?
State Partnership Manager at ME Bank, Glen Maestri, says: ‘From an early age, children form impressions based on how their parents behave, so it’s important that we talk positively about money. Discuss with your kids how you work to earn money. Support that conversation by creating a pocket money or chore-based scheme for your children.’
GET THE WHOLE FAMILY INVOLVED
Communicate. Discuss the rules you’ve set. For example, have you set a maximum gift amount for birthdays?
Define ‘donation’. If your household has a pocket money scheme, ensure ‘grandparent donations’ either have tasks attached or an explanation that grandma is contributing from her allotted donation jar.
Reinforce the strategy. If your child is saving for a big-ticket item, rally the rest of the family to match your child’s savings.
Start intergenerational discussion. Ask grandparents to share their financial life experiences.
According to parenting resource the Raising Children Network, giving pocket money creates an opportunity to educate children on saving and spending thoughtfully, as well as the consequences of losing money or giving it away2.
Having some financial responsibility means children learn to make choices about money and the concept of waiting while they save.
LITTLE ONES
For young children, you can create a jar system of ‘saving’, ‘spending’ and ‘donating’, whereby any money received is divided between the three containers. Once they’ve reached their goal, they can spend their ‘saving’ jar.
‘It’s important to explain to young children that the savings jar is also a spending jar for the future,’ says Glen. ‘They will eventually get to spend it, but they’re accumulating money for their goal. Once they’ve spent their savings, they will need to start the process again.’
PRIMARY SCHOOLERS
It is crucial that children understand the value of money by the time they reach primary school.
‘When kids are young, they tend to think there’s an unlimited supply of cash,’ says Glen. ‘Correct that thinking when drawing money from an ATM. Explain that to get money out, you have to work first; and the amount that’s in the bank will depend on how much you have worked and saved.’
Keeping it relative is imperative, so place a primary school lens on the big picture and couple your trip to the ATM with a visit to the shops.
‘When you are shopping, link the conversation of how much a certain item of clothing costs with the amount of pocket money your child receives. Explain how many weeks of chores they would need to do to accumulate the amount of money required,’ suggests Glen.
You can reinforce the concept of saving by opening a bank account for your child. There are a number of great banking initiatives available for children and once your child’s account is open, you can help them set a savings goal.
By repeating the goal/savings process, you’re bolstering a foundation of empowerment for your children.
TEENAGERS
Encourage your teenagers to look for a weekend or holiday job. ‘When teenagers and young adults earn their own money, it gives them responsibility, opportunity and choices,’ explains Glen.
While it might be too early for teenagers to start paying towards basics, like board or household bills, having a small income of their own means they can start covering some ‘extras’. Encourage your teenager to start paying for their own mobile phone, downloads, entertainment and special items of clothing.
YOUNG ADULTS
Many young people start their first full-time job while they are still living at home.
First jobbers or apprentices should start to contribute towards general household expenses and petrol. This is an opportunity to teach your child the benefit of hard work and investment before they head out into the world on their own.
‘Consider accumulating their board in a separate account and presenting the balance back to them on their 21st birthday,’ suggests Glen. ‘It reinforces the message that the commitment and sacrifices they have made have been recognised.’
This strategy helps to prepare your young adult for the future. ‘Whether or not you re-gift their board, contributing to household expenses prepares them for the realities of life,’ says Glen. ‘When they leave home, they’re going to have to take on the full responsibility of their own household commitments.’

Article: http://getsmart.australiansuper.com/article/teaching-children-financial-lessons/
BY FELICITY BONELLO | 15 SEPTEMBER 2014

Sponsorships

Dean Denaro — Fri, 19 Sep 2014 02:36:44 +0000

At Surf2Summit Mortgage Centre, we love to sponsor local events, local businesses, sporting activities and people.
Some of our wonderful sponsorships:
Andrew MacNamara
Sapphire Aquatic Centre – Little Swim Star Awards
Pambula Motorfest
Apple for the teacher – 2EC/Power FM promotion

How do architects charge?

Dean Denaro — Mon, 15 Sep 2014 03:16:38 +0000

How do Architects Charge?

Architects are university trained professionals who can handle all phases of a building project from conception to completion. Residential home builders often shy away from hiring architects because they have heard stories about their high fees. This is often a misconception based on the fees high-profile architects charge for large and complex projects. In reality, architects often have flexible fee structures that can allow you to take advantage of their expertise without going over your budget.

©Q3 Architecture

What is an Architect’s Job?

A “full service” contract with an architect will include their participation in all phases of a building project, including:

Concept: The concept includes initial design work and consultation.
Development: When a design is agreed upon, the architect will prepare drawings for costing and development approval.
An architect can then prepare documentation, drawings and specifications to council for your Development Application (DA).
When DA is approved, the architect can prepare documents for building approval.
After building approval is granted, the architect can supply documents to your builder.
Finally, the architect can work with your builder on your behalf.

Architects also enter into “partial service” agreements with clients to help them with one or more phases of the building process. Often, an architect will only be involved in a project until after a DA has been approved.

How do Architects Charge?

Because clients have different needs and an architect’s responsibilities often change over the course of a project, they have a variety of fee structures to adapt to circumstances. The three basic ways architects charge are:

Percentage fees are based on a percentage of the overall cost of a project. If the cost is not already known, they will calculate their fee based on a client’s budget. Architects commonly quote using this method because it is an easy way to calculate fees.
Fixed fees are often calculated for projects when the architect is given a detailed brief to work from.
Hourly rates are charged for many projects. Architects often given stage-by-stage estimates based on percentage calculations and/or previous experience.

Architects often have clauses in their percentage or fixed fee contracts that permit them to add hourly charges for work that falls outside the scope of the contract price. For example, if a client wants them to change a design, they will charge them an hourly rate for the changes.

There are advantages and disadvantages to all these fee structures. A percentage fee can vary from 8 to 18 percent, based partially on the architect’s previous experience, but does not necessarily reflect the amount of work they are going to carry out on your behalf. The services you receive for a fixed fee contract may be based on the price rather than the quality of the work. An hourly rate can result in cost blow-outs if a client asks the architect for frequent changes or services.

Like all trades and professions, architects charge competitive prices. Get quotes from several architects and compare their services and quotes. Also check their registration. If an architect is not registered with the Board of Architects in your state, they are not legally allowed to offer their services as those of an architect and are not bound by the Code of Professional Conduct and will not hold professional indemnity insurance.

Full article: http://www.homeimprovementpages.com.au/article_v2/how_do_architects_charge

First homebuyer numbers continue to fall

Dean Denaro — Sun, 14 Sep 2014 10:47:59 +0000

First homebuyer numbers continue to fall

First time homebuyers

The Real Estate Institute of Australia (REIA) says the Australian Bureau of Statistics (ABS) July 2014 housing finance data shows first homebuyer activity is at a record low.

Peter Bushby, president of the REIA, says the softening is becoming entrenched.

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, fell to 12.2 per cent compared to 13.2 per cent in June.

“This is the lowest since the series commenced in July 1991.”

Bushby says the rest of the ABS numbers show relatively flat performance for the month.

“In trend terms, the number of commitments for new dwellings purchases increased by 1.3 per cent while construction of new dwellings decreased three per cent and the purchase of established dwellings decreased by 0.1 per cent.”

Investors again showed they are a driving force in property across the nation, Bushby says.

“The value of investment housing commitments again increased by 1.2 per cent in July, following over three years of consecutive monthly increases.”

Bushby believes the fall in first homebuyers should be more worrying for policymakers.

“This figure for first homebuyers is very concerning and governments need to look at the issues impacting on this important group.

“There’s a chronic under-supply of housing, and added to this, many state and territories have abolished homebuyer grants for established dwellings which has further undermined the confidence this group needs to enter the market.”

Posted on Wednesday, September 10 2014 at 1:48 PM

Article supplied by: http://www.apimagazine.com.au/api-online/news/2014/09/first-homebuyer-numbers-continue-to-fall

6 ways to get rid of your mortgage faster

Dean Denaro — Mon, 01 Sep 2014 03:36:02 +0000

Six ways to get rid of your mortgage faster

A mortgage can seem like a life sentence, but it doesn’t have to be.

Here are six painless steps towards taking years off your home loan, and making financial freedom possible much sooner than you had anticipated.

1. Make a budget

Eliminating your mortgage quickly requires discipline, foresight and a plan. Making a budget and sticking to it is your best chance at managing your expenses and maximising income, allowing you to increase you repayments and reach your goal faster.

Don’t let your savings stagnate; put any cash saved into a high interest savings account and earn interest while you save.

2. Make fortnightly payments

This is effective because it means that you pay back additional money over the course of the year, even though you probably won’t actually realise it. When budgeting, most people think of a month as being four weeks when in reality it’s more like 4.3. By paying fortnightly you’ll make the equivalent of 13 monthly payments per year, taking up to seven years off a 30 year loan term. It also means that your repayments will most likely be aligned with your income.

SURF2SUMMIT MORTGAGE CENTRE can compare home loans and get you the most competitive rate and the loan that is right for you.

3. Make lump sum repayments

Tax returns, work bonuses, and inheritance money are all example of lump sum windfalls that can be put directly towards you mortgage, reducing principle and diminishing interest. Check the terms and conditions of your loan; some loans won’t allow this so make sure you’ll need to specify this when choosing the loan.

After years of making additional repayments, there may come a time when you need to access those additional funds and if your loan allows for this it is called a ‘redraw’. For example, if your minimum home loan payment each month is $1000 for 12 months, but you pay $1500 each month, a loan with a redraw facility will enable you to redraw the $6000 at a later date. Be aware that this feature might incur a fee.

4. Pay more than the bank asks for

Regularly paying even slightly more than the minimum will significantly reduce the duration of your mortgage. Online mortgage calculators are a useful tool if you want to see just how much difference small increases can make to shortening the term of your home loan.

5. Setup a Mortgage Offset Account

This involves setting up a transaction account that is linked to your home loan. The money in the account is used to offset the loan, and interest is only charged on the difference. For example, if your home loan is $400,000 and you have $100,000 in savings, you only pay mortgage interest on $300,000. This can dramatically cut down on the amount of interest you pay and take years off your loan term, while also providing taxation benefits.

6. Perform a mortgage health check

A home loan needs to be serviced regularly in the same way that a car does, but it doesn’t need to be expensive or time consuming. Circumstances, interest rates and options change, and it’s always worth considering refinancing your loan, and possibly saving thousands.

Refinancing your home comes with costs so it’s important that you assess your financial situation and calculate the total cost of your loan before making any decisions for the long term.

Whether you have a mortgage, or are just about to sign, it doesn’t have to feel like you are signing your life away. With some smart financial planning there are ways to get rid of your mortgage faster. Compare home loans with Surf2Summit and assess which loan is best for you. Remember, you pay the most interest on your loan during the first few years when the principle is at its highest, so the sooner you start getting ahead, the better.

Full article supplied by:

By Hannah Collins, Yahoo!7 Moneyhound

Money Myths

Dean Denaro — Mon, 01 Sep 2014 03:28:15 +0000

Money myths you should stop believing

There’s never a shortage of myths in circulation; “chewing gum stays in your stomach for years”, “cracking knuckles leads to arthritis”, and “sex burns lots of calories” just to name a few.

And you probably believed them because you heard it from your friend who heard it from their sister’s boyfriend’s cousin. Right?
Unfortunately, money myths have also found their way into your consciousness. To help you separate fact from fiction, here are four myths about investing money that get thrown around far too often.

Myth: Only the rich can afford to invest

Many mistakenly believe that you need to be wealthy to invest, not realising that the rich often achieve their wealth through investment. Everyone has to start somewhere. Investors come in all shapes and sizes, and they’re not limited to one social class. People earning an average income can invest too. According to Ray Morgan, over 1.31 million Australians now have an investment property loan.

Myth: Property will only go up in value

The real estate market is not always predictable. Though we like to think that bricks and mortar are a solid investment that will continue to grow, it’s not the case. There is always an element of risk involved with property investment, so you should approach it with a degree of caution. Do thorough research on the local area and economy beforehand, and be prepared to experience peaks and troughs that affect the real estate market. Property should be seen as a long-term commitment.

Myth: Buying a property will reduce your taxable income

An investment property will only reduce your taxable income if it actually costs you money to own and maintain it. Every year 1.2 million people Australians take advantage of negative gearing, which means they deduct losses on investments, such as mortgage interest and property maintenance, from their overall income. But if your investment is positively geared, meaning it earns more in rental income than it costs you to own the property, then you will have to pay tax on the profits.

Myth: The worst house on the best street is always a winner

Just because you’ve bought a ‘renovator’s dream’ on a great street doesn’t mean you’re going to see a solid return on your investment. Buying and renovating for profit isn’t easy, and underestimating the cost of renovation has caught out many a would-be developer. Overcapitalising is another common mistake. If you buy a house for $500,000 and invest another $100,000 to renovate the property, will the finished value be $600,000 or greater? It pays to find out. If not, you could be pouring money into a financial black hole with no chance of seeing a return.

Financial myths are everywhere, so it’s hard to know what to believe. Just because you’ve heard the same advice from multiple people doesn’t mean its true. The secret is to approach with a degree of caution, and question it if you think it may be false.

Article supplied by: By Melissa Cortes, Yahoo7 Moneyhound

10 property tips from reality tv

Dean Denaro — Mon, 18 Aug 2014 10:51:39 +0000

10 PROPERY TIPS FROM REALITY TELEVISION: The classics

While television series come and go – and come back again in The Block’s case – some property truths are forever. Property Observer takes a look at the tips that have stood the test of time.

1 COMPROMISE, COMPROMISE, COMPROMISE

Programs like Relocation Relocation showed that buying a property is all about making a series of small trade-offs. Location, location, location? More like location, room size, fit-out, maintenance… When you’re investing in property, remember the fundamentals but be open to compromise.

2 EXPERTS ARE WORTH IT

Comparing the work of interior designer Shaynna Blaze to that of the newbies on House Rules shows just how much the experts really know. Sometimes, shelling out for someone who’s seen it all really is worth it.

3 HOMES ARE FOR TRADING

There is a distinct difference between the way experts and buyers look at houses. The buyer looks at a house as though they will live there forever, while the expert sees the house as a temporary step on the property ladder.

4 DON’T DIY

Although it might look like the mammoth renovations on The Block were undertaken by a motley team of ordinary Australians, they were assisted by professional architects, foremen, designers and tradespeople.

Check out an episode of Grand Designs: the more the owner takes on, the more stressful and difficult the project seems to become. Don’t be fooled into thinking that DIY renovations will necessarily cheaper.

5 A HOUSE IS NOT A HOME

Particularly on Grand Designs, where houses invariably become “projects” or even better, are described as “buildings”. This underlines the gravitas of the house and sounds very cool too.

6 KEEP IT SIMPLE

The participants on many shows, particularly Selling Houses Australia, seem to have tastes that favour excess.

Interior designers and tradies invariably strip the houses right back so they look simple, clean and uncluttered.

7 THE BUDGET IS NEVER THE BUDGET

On all of these shows, the participants always spend over their budget, whether they are buying, building or renovating. Funny how emotion does that, isn’t it?

8 THE DEADLINE IS NEVER THE DEADLINE

On the giant projects seen on Grand Designs, nothing ever runs to schedule. On the first episode of the new series of the British version of the program, the “build” took more than four years longer than expected.

9 MOST PEOPLE ARE UNREALISTIC

The sellers always want too much. The buyers always underestimate the price. The experts try and inject a realistic point of view.

10 YOU’VE GOT TO SPEND MONEY TO MAKE MONEY

This is the great lesson from Selling Houses Australia, where Andrew Winter convinces the stranded home owner to spend tens of thousands of dollars to renovate before they sell. But be careful not to overcapitalise and spend more than you can realistically make.

Article:

eBook author: Jessie Richardson 4

Snapshot of the housing market

Dean Denaro — Sun, 17 Aug 2014 11:25:57 +0000

SNAPSHOT OF THE HOUSING MARKET
• The HCI for homeowners generally, and FHBs in particular, fell in the six months to March 2014.
• This was driven by an increase in the number of homeowners who experienced mortgage stress over the past 12 months, as well as those expecting stress in the coming year.
• One-third of prospective FHBs are still struggling to save a deposit.
• For prospective FHBs though, 71% think the dream of home ownership remains realistic, up from 67% six months earlier.
Cost of living remains the key driver of mortgage stress for homeowners (49% versus 25% for FHBs) while concerns around underemployment is the main driver of mortgage stress for FHBs (63% compared to 32% for homeowners).
Key research findings
This is the eighth edition of the Genworth Homebuyer Confidence Index (HCI), a measure of Australian homeowners’ and non-property owners’ sentiment towards the mortgage market.
In March 2014, the key findings include:
• National homebuyer confidence down since September 2013: The Genworth HCI decreased by 1.7%, from 92.4 in September 2013 to 90.8 in March 2014.
• Some homeowners struggle to meet repayments: Around 28% of homeowners have struggled to meet their mortgage repayments in some months in the past year, and 30% expect a similar struggle over the next 12 months.
• …but are actually far from being in the red: Despite mortgage stress being felt by some, homeowners appear to have quite a buffer built into their finances. The proportion of homeowners using over half of their income to service debt has fallen from 28% in September 2013 to 25% in March 2014. The survey suggests this was because homeowners have reduced their discretionary repayments (i.e. their overpayments) and lower interest rates have also been reducing the minimum payments required meaning that homeowners actually have more after-debt disposable income than before.
• Still a good time to buy, just slightly less so: Despite more than half of the investors thinking now is a good time to buy a home, only 42% of all respondents agree with that sentiment in March 2014, down from 46% in September 2013.
• First homebuyer confidence drops: The FHB Confidence Index slipped to 82.3 in March 2014 from 85.0 in September 2013, but 59% still believe it is a good time to buy property.
• Accessibility tougher for prospective FHBs: Around two-thirds of all homeowners (65%) believe that today’s prospective FHBs will have a harder time getting into the market than the previous generation did, while just under a quarter (23%) thought that it was probably just as hard.
The dream of homeownership burns brightly: Despite one- third of prospective FHBs struggling to save a deposit, 71% think the dream of homeownership remains realistic, up from 67% six months earlier.

Full article: http://www.genworth.com.au/streetsaheadedition8/streetsahead-edition8.pdf

March 2014

Market Watch – Houses Sept ’14

Dean Denaro — Sun, 17 Aug 2014 11:17:33 +0000

Local Market Watch – databank September 2014. House Prices stats

Australian Property Investor, September 2014

summercamp — Wed, 02 Oct 2013 06:25:56 +0000

98487 Mixdown