Why steel framing?

Timber framing has been the traditional choice for house frames in Australia however there is now a trend in selecting steel as an alternative material. This trend is given by factors such as

Its lightweight construction and the assurance of continuity of supply. Advanced joining systems and low cost screw and nail fasteners have made construction easier, cheaper and more reliable for builders.

Due to the fact that steel frames are manufactured millimetre perfect, they remain straight, true and flat with no warping, twisting or buckling.

As well as a strong durable framework the steel frame offers protection in termite prone areas, however consideration must be given to other areas of the house to determine whether termite protection treatments are required.

Why the certificate of title is key

Once you have decided on a block of land that is suitable for your new home it is important to obtain a copy of the title to determine whether there are any issues which may affect your decision to purchase.

The most important item is to confirm that the block you are looking at is the same as the block described in the contract to buy. This can be done by comparing the CT and Folio number on the land title with the CT and Folio number on the purchase contract.

Once you have confirmed that the contract you are signing is actually for the block you intend to purchase you must also confirm that the person who is selling the land is actually the registered owner of the land on the certificate of title.

In the case of a property developer this may not actually be held in his/her own names in which case your conveyancer will investigate to confirm that the seller holds the appropriate authority.

The next item to note on the title is whether there are any restrictions on the title that are likely to affect where you can build your house or other amenities. Items on the title may include such things as rights of way, encumbrances or common or community property. You may also ask the seller of the land or the real estate agent to show you the boundaries of the block and if there is any doubt, a licensed surveyor may be required to clarify the boundaries.

There may also be restrictions on the title that have the effect of dictating the materials you use, the style and colour of the exterior of your house and/or the timeframe for building. These controls are more likely where the land is in a new development and the development is trying to maintain a common theme in area.

If you are unsure of any of the items in the Certificate of Title you should engage a qualified Development Consultant or Conveyancer to ensure there are no nasty surprises after you have settled on the land.

Why should i develop a property?

Although there may be risks associated with developing your property there are also great opportunities to experience capital gains far greater than what the market on its own can offer.

There has never been a better time for property owners to secure their financial future and set themselves up for retirement. Due to the shortage of housing in suburban areas the government is actively encouraging homeowners and investors to develop their properties ensuring that there is sufficient supply of housing to the meet housing needs of future generations.

It is important when considering whether to develop your property that you are informed as to the pros and cons as well as the costs and benefits so when you begin your development you do so with your eyes open.

With the help of experienced professionals to guide you through the process it is possible to leverage off their experience to ensure that all possible scenarios are considered to ensure that you maximise your profits whilst minimising your costs.

Only you can secure your financial future to ensure that when the time comes to retire you can do so comfortably and with confidence knowing that you are financially secure.

Why mortgage insurance doesn't protect you

Many people falsely believe that Mortgage Insurance is to put in place to protect the borrower. However the opposite is true. The purpose of this insurance is solely to protect the lender.

You may or may not know that banks have 2 main criteria when assessing your borrowing capacity

Service ability- Your ability to repay the loan
Loan to Valuation Ratio (LVR) - how much you are contributing to the purchase.

The maximum loan amount that banks would prefer to lend to you is 80% of the purchase price. This is because if you fail to make the repayments they know that they can just sell the property at 80% of the market price and get all of their money back in a hurry.

Where you would like to borrow over 80% the bank considers this risky so they take out Mortgage Insurance to cover the difference between the 80% they would prefer to the lend you and the amount they actually will lend you. In the instance where they lend you 95% of the purchase price then the bank will take out insurance to cover the difference i.e. 15%.

Where you fail to keep up with your repayments and the bank sell the property and only gets 80% of the value of the property the Mortgage insurer will then pay the 15% to the bank to cover its losses.

The thing to note about mortgage insurance is that although the banks losses are covered by the mortgage insurance this doesnt mean that you as the lender get off scott free. In this instance you will still be liable to the bank to repay the 15% shortfall even though the banks losses have been covered.

The other thing to note it that although the mortgage insurance is solely in place to protect the bank guess who has to pay for it? Yep... you the customer. In some cases the mortgage insurance may be tens of thousands of dollars and this offers you absolutely no benefit whatsoever.

The real reason why mortgage brokers offer insurance

If you have visited your Mortgage Broker lately you will have noticed that they are likely to offer to assist you with your insurance when setting up your loan.

Now the cynics amongst you may just say that they are just trying to make a quick buck however?with the introduction of the Consumer Credit Protection Act (NCCP) brokers are now under an obligation to assess the borrowers ability to service the loan without undue hardship. This includes thinking about what will happen if their client get sick or loses their job and is unable to repay their loan.

To ensure that this requirement is met all brokers must now ensure that their clients have adequate insurance protection to cover them if the unforseen happens.

A good broker will offer insurance to protect the client or at least tell a borrower they should have their situation reviewed.