It is estimated that around 469,000 households will be suffering mortgage discomfort by December and the number of those in severe stress (facing a potential sale, foreclosure or forced refinance) could be as high as 267,000.

How can at-risk borrowers stay out of trouble, save money and own their property sooner?

Spokesperson for Mortgage Choice, Kristy Sheppard said, “There are simple strategies that can help borrowers avoid mortgage stress, reduce their loan term and the interest owed. It’s about them taking control of their finances by managing the mortgage instead of letting it manage them.”

“Common causes of mortgage stress are higher interest rates and rising living costs. However, over-indulgence in post-mortgage debt is also a big concern.

“Mortgage Choice’s 2010 Recent First Homeowner Survey revealed 15% had taken on within the first two years what they saw as ‘significant’ post-mortgage debt. Of those, 70% had spent between $0 and $20,000, 26% had racked up between $21,000 and $50,000, and 4% had extra debt of $51,000 or more.

“If these borrowers and others facing a similar situation want to better their mortgage situation they need to be proactive in their repayment strategy. By maintaining additional, higher and/or more regular repayments, sticking to a budget, fully utilising the loan facilities available and regularly ‘shopping around’, borrowers can potentially fast-track their way to outright ownership.”

Consider Mortgage Choice’s top tips:

• Contribute your change. Based on a loan of $300,000 at 7% over 30 years, if you round the monthly repayments of $1,996 up to $2,050, the loan will be repaid approximately one year and eight months earlier, saving you over $25,000 in interest.
• Make a dent. If you deposited your tax return of, say, $500 into the above mentioned loan, it would reduce the term by one month and the total repayments by over $2,350. Doing so annually would make a significantly larger dent.
• Make the most of loan features. If a borrower has $5,000 in a loan offset account, a $300,000 loan (at 7% interest pa) the term would be reduced by around one year and the borrower would save over $33,000. It’s worth enquiring about, but be mindful of any ongoing account keeping fee.

Many investors assume that Australia’s fondness for the beach and the ocean — and the population drift it creates — would logically translate into superior capital growth.

But in many cases it does not.

The two worst-performing markets in Queensland over the past five years, in terms of growth in house prices, have been the Sunshine Coast and the Gold Coast.

In northern NSW, Byron Bay is outperformed by the inland towns like Mullumbimby, Murwillumbah, Kyogle and Casino.

The central coast of NSW hasn’t seen any major price growth for six years.

High-profile sea-change destinations in Western Australia, such as Mandurah and Bunbury, saw their price levels collapse after the market peaked in 2007. There are several reasons for the general lack of outperformance by sea-change areas.

Read the full story on The Australian

Gosnells City Council gardens. Image:: Weddings WA

According to this month’s Australian Property Investor magazine Gosnells is an outer suburb where prices are set to explode.

API journalist Nicole Navarro has sought out suburban fringe areas that Australia’s property experts believe are ripe for strong growth.

“The mortgage belt mightn’t always be glamorous, but for investors property is more about the numbers involved rather than emotions,” Navarro says.

“To locate fringe suburbs on an upward trajectory, investors should look for locations with a train station and property markets that are delivering housing growth, new infrastructure or strong rental yields,” she adds.

“They also need to beware of ‘black spots’ – areas that suffer from a lack of infrastructure and services.”

API reveals 12 fringe locations tipped to boom across five states in its July issue. They include:

• Campbelltown, NSW
• Craigieburn, Vic
• Gosnells, WA
• Logan City, Qld
• Melton, Vic
• City of Playford, SA

The big news over the past month has undoubtedly been the reduction in the interest rates on a number of fixed home loan products, particularly those over two and three year terms.

Some of the fixed rate home loans now available may be very appealing to borrowers, especially anyone who is looking for some certainty over their mortgage repayment levels. A fixed rate may also give borrowers the opportunity to limit the impact of any further changes to interest rates by the Reserve Bank or the banks and lenders themselves.

If you are considering a fixed rate, you will need to be aware that most fixed rate products have fewer features than their variable rate counterparts and may be expensive to break.

Having said that, a recent survey conducted by Loan Market nationally shows that a good percentage of mortgage holders have the capacity in their budget to cope with further interest rate rises. While that doesn’t look likely to happen in the near term, based on the current economic data, it’s an excellent position to be in.

People considering a fixed rate home loan should firstly seek advice from a competent finance specialist.

Termites can do a lot of damage Image: Algon Exterminating Company

Termites. The mere mention of the word can cause homeowner hysteria. These pesky insects silently invade your home and can leave you with a staggering repair bill. Unfortunately we do a lot of things that can attract termites to our homes. Here are a few tips to stave off a full blown attack.

Keep wood off the ground

Piles of firewood, tree stumps, latticework and structural wood should be cleared from the property or be raised at least 15cm off the ground. Any wood that is at soil level is especially appetising for termites.

Keep subfloor ventilated

Termites love moist, damp and poorly ventilated areas. The best way to deter them is by installing adequate ventilation like high flow vents or solar powered fans in crawl spaces and sub floor areas.

Keep moisture away from foundations

Moisture and humidity attract termites so it’s essential to keep dampness away from your foundation. Replace ineffective drainage, damaged and leaking pipes and make sure your gutters and drainpipes are unblocked and working.

Use mulch sparingly

Mulch can make your gardens look fantastic but using it excessively can trap a lot of moisture. A layer of about 5 – 7cm provides adequate coverage for most gardens. Be sure to keep mulch away from any wood framing, stairs or siding.

Regular pest inspection

The best way to protect your home from termite attack is by carrying out regular pest inspections. Get a reputable pest controller to check the conditions of the sub floor, roof void, interior timbers and slab for the presence of termites at least every three to six months.

Some home owners are complacent when it comes to the threat of termites because of misconceptions about building materials. Just remember, brick and steel framed homes are just as susceptible to termite attack as wooden framed houses so be vigilant and keep your eyes peeled for any signs of attack.

Have you had termite problems in the past? What was the outcome? Leave a comment below.

Photo credit:: Algon Pest

Fretting mortar is a common problem for brick and stone homes, especially in homes built up until the late seventies. Essentially it’s where the mortar between brickwork begins to ‘fret’ or fall away. If you spot it early there’s a good chance you can escape any major structural damage and a potentially large repair bill.

What causes it?

Fretting mortar is caused when cement joints become damp or where a badly mixed batch of mortar was used during construction. This can happen in a number of ways including:

• exposure to the elements,
• reticulation or pool water spraying on the brickwork,
• incorrect mixing of mortar at the time of the build.

How to spot it

Fretting mortar is pretty easy to spot. When you’re inspecting your external brickwork have a look at the cement joints. If you see any crumbling or powdery mortar it’s a good indication that your brickwork is fretting. In its advanced stages the mortar will be almost completely missing. At that point the rows of bricks may begin to collapse onto the bricks below. Be prepared for an expensive repair job if it gets to that stage.

How to fix it

There’s only one way to fix the problem and that’s to replace the mortar (also called re-pointing). Re-pointing is the best way to ensure the structural integrity of your home and to make sure fretting mortar isn’t an ongoing problem. Re-pointing is done by cutting or vacuuming out the fretted joints and replacing them with a correctly mixed mortar. It’s usually a simple, straight forward job that can be completed by a competent bricky.

While there may be just one way to fix fretting mortar there are a few ways you can stop it from becoming an issue in the first place.

-  Perform regular checks and maintenance of brickwork.

-  Apply a sealer. If you know an area of brickwork will be exposed to the elements or damp conditions, apply a sealer from the outset. Brick sealers provide a waterproofing layer which inhibits erosion and damage.

Next time you’re outside have a look at your external brickwork and check for signs of fretting mortar. A simple once over now could save you some money in the long run.

It has come to the attention of the Institute that there is some confusion regarding Clause 5 of the Joint Form of General Conditions for the Sale of Land 2009.

The Clause allows for “One Final Inspection” for the purchaser before Settlement. Should some issues be identified that need rectification, there is no provision for a further inspection to ensure that the issues have been rectified.

This being said, the Institute fully supports co-operation between the Seller and Buyers agents, who should try to negotiate a suitable time for further inspection. Please remember that it is a large investment for most clients and to make the experience of settlement as pleasurable for them as possible… and next time you could be negotiating with the same Conveyancer on the opposite side of the deal!

The Institute promotes all Conveyancers working together for the best outcome of all clients, and working together to achieve an effective, efficient and harmonious Settlement.

Buying and selling is usually a stressful time for all concerned. It’s been our experience over many years that the smoothest deals are when everyone involved in a property transaction look for ways to co-operate.

Buying a home is a big financial decision. Going into the process blind can lead to some very unfortunate outcomes so your best bet is to arm yourself with knowledge and be prepared for anything.

Here are a few things to consider before buying a home.

Don’t over-extend yourself financially

As a homebuyer, one of the worst situations to find yourself in is being financially stretched. Before you commit to anything it’s important to realise that variables such as interest rates or fees may rise at any time. Sit down, make a budget and work out a few contingencies.

Organise a pre-settlement inspection

When you’re buying a home, you should consider building inspections mandatory. You may want to try to speed up the process (especially if you’re feeling pressure from family or your agent) but skipping them could land you in a lot of hot water.

Research the area

You may be in love with your future home, but will you still love it if the neighbours are ‘characters’? A lot of home buyers don’t check out the neighbourhood they’re moving into and they pay for it later. A couple of good tips are to:

• visit the property at different times of the day – your house may be a short-cut route for peak hour commuters for example
• take a walk down the street to get a feel for your neighbours
• find out how close public transport, schools and shops are

It’s also a great idea to check with the local council to see if there are any future developments being planned for the area.

Think about resale value

Chances are you won’t be spending the rest of your life in your new house, so considering the resale potential of a property is a good idea. You should:

• Find out what other properties in the area have sold for
• Steer clear of outdated features – you may love the ‘retro’ feel of the house but can you be sure other buyers will?
• Location is always a big factor in terms of resale. Talk to your agent about the suburb’s future potential

Buying a home is a big deal. Like everything in life, the process will go smoother will a little bit of planning and forethought.

Winter maple leaves

Those long, dark, rainy days are almost here. Here’s a list of 7 easy things to do to get your house ready for the winter weather ahead.

1. Clear gutters and drainpipes

Clear your gutters and drainpipes of leaves and rubbish. If these are blocked they could cause water damage to your brickwork and interiors. Consider buying a leaf guard to prevent any debris from getting settled.

2. Prune overhanging trees and shrubs

Overhanging branches can bring down power lines or cause significant damage to your roof in a storm. Organise for a professional tree lopper to take care of any branches that could cause problems over the course of winter.

3. Fix any broken roof tiles

Water can enter your roof space if you have broken, cracked or missing roof tiles. Do a quick check and organise to repair or replace any tiles that need fixing.

4. Check your smoke detectors

Smoke alarms should be checked and cleaned at least once a year. Test that your alarm is in working order (generally this is done by pressing the “test” button), vacuum any dust from the smoke alarm vents and replace the batteries if you haven’t done so in the last year.

5. Check your heater

Clear dust from your heater and make sure it’s sitting at least one metre away from any flammable objects like furniture, curtains and toys.

6. Put together an Emergency Kit

There’s nothing worse than fumbling around in the dark for supplies during a blackout. Put together a simple kit that contains all the basics and keep it in a spot that is easy to get to.

Include things like:

• Candles and matches.
• A torch.
• First aid supplies.
• Emergency contact numbers.

7. Check over your insurance policy

Have a quick read through your insurance policy and make sure your policy coverage is sufficient. If you’re not sure what you’re covered for, get in touch with your insurance company today.

Is your home ready for winter? Do you have any winterising tips we can add to our list?

Photo credit: Miumiumi on Picasa Web Albums

Swimming pools must be fenced correctly

Swimming pools and outdoor spas can be great selling points for your home. If they’re well maintained, they can add value and attract the eye of potential buyers.

A few years ago a law came into effect that changed who was responsible for ensuring barriers complied to code at the time of settlement. If you have a pool that was installed pre-1992, and you’re thinking of selling your home, there are a few things you need to know before putting it on the market.

Old pools and the law

In 1991 all State and Territory Governments in Australia passed laws making it compulsory for effective barriers to be installed around outdoor swimming pools and spas to protect young children. These barriers can be made of a purpose built fence, wall, gate, window or door set and must be regularly maintained. To make sure the barriers are kept up to standard, local councils visit all pools in the country at least once every four years.

What are the safety standards?

If you use fences and gates as your pool barrier they need to be:

• at least 1200mm high
• free from climbable objects within a 1200mm span from the top of the fence
• consistently spaced with gaps of 100mm or less.

If you use a door as your pool barrier it needs to be:

• self-closing and self-latching
• latched at least 1500mm from the ground and 1400mm above any climbable part of the door.

It’s recommended that doors opens away from the pool.

What needs a barrier?

If your outdoor pool or spa is meant for swimming, wading, bathing or similar activities and has a depth of over 300mm, it needs to have a barrier. Some above-ground pools are also included in the legislation. If you’re unsure if your pool or spa is covered in this legislation contact your local council for clarification.

The seller is now responsible

In the past it was the responsibility of the new home owner to make sure pool fencing  was up to scratch. The new owner had three months after the sale of the property to comply with the pool and spa enclosure requirements. This is no longer the case. As of December 17, 2006 if the house you are selling has a pool or spa that was installed before June 30, 1992 it is your responsibility to make sure it is up to code before settlement.

What are the penalties?

If your pool and spa barrier is faulty or hasn’t been maintained you could be in for some harsh penalties.

• You may be fined a $100 on-the-spot penalty by your local council as a first warning
• If you’ve already received a first warning and you choose to ignore it, you may be fined a further $200
• If you’ve already received two defect notices and you don’t fix anything you could face legal proceedings, a $5000 penalty and an additional daily penalty of $250 until the barrier is up to code.

You’ll be in for further costs if you’re selling the property. If the pool and spa barrier is not up to code at the time of the acceptance of an offer you’ll be in breach of regulations that could cause problems with settlement. You might be charged penalties and the delay could cause the offer to fall through.

3 things to remember

1. All outdoor pools and spas need to be fenced off with sturdy barriers that comply to local laws.
2. It’s the responsibility of the home owner to make sure all pool and spa fences are up to scratch before putting the property on the market.
3. As the property owner, you need to contact your local council to have any barriers checked. You should request written confirmation of compliance to reassure potential buyers that there are no issues.

Pools and spas are fantastic lifestyle features and they can really help to sell a home. If you’re considering putting your house on the market, knowing your legal responsibilities in terms of pool and spa safety and how this affects the conditions of sale, ensures a straightforward settlement without any nasty surprises.