If you have kids, planning to have kids or its still a while away, have a plan that is kidsafe.

Education is something that’s close to the hearts of many parents. Most people are keen to make sure that children get the best possible education to prepare them for the future.

The reality is that the costs of education are constantly rising and it could easily be one of your family’s biggest expenses. This means that planning and budgeting are more important than ever.

If you’re starting to think about your child’s education and how you’re going to fund it, you may want to consider putting a regular savings plan in place. This means saving a sum of money on a regular basis and putting it into an account that earns interest. You’ll also be able to take advantage of compound interest, so you earn interest on any interest already earned.

For example, if you saved $10,000 at 5% interest per year, you’d think you would earn $2,500 in simple interest after five years, $500 for each year. This would give you a total of $12,500 after five years.

However if you invested $10,000 at 5%, and interest is paid monthly, you would actually earn $2,834 in compound interest after five years, giving you a total of $12,834. This is because every month the interest is added to your account and you'll earn interest on the interest.

Keep putting money aside and after a few years, you should have a significant amount put aside for a loved one’s education.

How do parents these days help their kids get onto the property market?

We love property in Australia. About 70% of us live in our own homes and only about half of all home owners are still paying off a mortgage.

Increasing house prices are good news for property owners and investors, but can present real challenges for first home buyers and those wanting to buy their first investment property. Speculation that property prices will continue to go up faster than wages means property can be a great way to build wealth but at the same time it becomes harder for younger people to get onto the property ladder. It’s a vicious cycle.

Every parent wants the best for their kids. While children may be living at home for longer these days, the family home can provide more than just a roof over their heads. Research from The Australian Housing and Urban Research Institute project suggests that the family home acts more or less like a savings account for many Australians.

By parents paying down the home loan, and particularly as the value of the home increases, an owner’s equity in the home builds. Parents can then release this equity by borrowing against their home and using the money to help their children.

If the parents can afford it, gifting a deposit can be a great start. A good deposit will reduce the amount the child needs to borrow and reduce the amount of interest paid over the life of their home loan.

If parents dont have a big pot of gold set aside for a rainy day, they can still help their children. Parents can use the equity in their home as a guarantor and help the child may qualify for a home loan.

If parents are able to make more of a commitment, they may want to sign as a joint borrower on the home loan. This option isn’t for everyone because although technically they own only half of the property, they still have full financial responsibility if the child doesn't pay their part.

If anyone you know are looking for the most effective way to assist their children, we recommend that they speak with their accountant or consult with a financial planner. We can assist with the funding side to make sure the solutions selected aligns with their goals and objectives.

Source: AMP

A conveyancer is a solicitor, but just deals with property, right? Wrong. The two are different, and it is important to have the right one on your team, in order to avoid paying too much while still getting the advice you need.

Buying property is one of the biggest decisions most of us will make in our lifetime – it’s something you want to get right.

Every Australian state and territory has different laws, forms, regulations and taxes associated with purchasing property, so having either a solicitor or a conveyancer will help the whole process run smoothly.

“A property purchase is one of the biggest financial commitments a person can make. It is therefore important to have professional advice about what you are buying,” says O’Connor Harris & Company Partner Ruth Harris.

“Solicitors and conveyancers are familiar with all the procedures and, while it may seem to be just paperwork, when you are not familiar with all the procedures it can be very time consuming.”

For a straightforward property purchase, a conveyancer can do the job. Their main responsibilities include giving advice and information about the sale of property, preparing documentation and conducting any settlement processes.

Although there is a licensing process for conveyancers, they do not have to be legal professionals. As a result, they are cheaper to hire. However, they can only provide information relating to property, so if you have additional legal questions, you might have to search elsewhere.

“Conveyancers must cease to act for a person as soon as the matter moves beyond conveyancing,” Harris explains. “When this happens, the conveyancer must refer you to a solicitor for advice.”

While conveyancers are limited to advising on your property purchase, solicitors can provide you with a wide range of legal advice in addition to your conveyancing needs, and may be necessary if your property transaction isn’t straightforward.

“If there are other matters that affect the transaction like family law, asset protection, asset structuring, tax law or estate planning, you will not be able to receive advice from a conveyancer,” Harris says. “If things get complicated with a conveyance you will need to get a solicitor’s advice.”

Solicitors are more expensive, but the investment may be worthwhile if you anticipate any legal issues – having this established relationship with a solicitor means you won’t have to scramble for one later.

We can refer you to a conveyancer or solicitor with the experience and expertise you need.

Late payments and loan defaults leave marks on a credit history that can complicate any effort to refinance or secure a loan in the future. Default can also lead to a home being repossessed and sold by the lender, so it’s very important to act quickly to avoid it.

While late bill payments and a loan in arrears can impact your credit report and lead to difficulty securing finance in the future, the worst case scenario is repossession of a property.

In the past, lenders may have taken months to start the proceedings that lead to repossession. However, according to the Financial Rights Legal Centre (FRLC), this is not the case anymore.

“Lenders work to a timetable to begin court proceedings and this can be very difficult to stop once this process has started,” the FRLC explains in its Mortgage Stress Fact Sheet.

Once a mortgagee has defaulted on a loan by failing to make repayments as agreed, they can be sent a Default Notice, which gives them 30 days to catch up on the repayments that are in arrears, as well as continuing to make any repayments that are due in the 30-day period.

“This notice will include an acceleration clause,” the FRLC explains. “This means that if the arrears are still outstanding after the 30 days has lapsed, the entire loan becomes payable.”

Thirty days after the Default Notice, the lender can take vacant possession of a property that is not occupied, or seek a court order for possession of a property that is occupied.

The key to avoiding this substantial trouble is, of course, to keep making repayments. From time to time, circumstances such as unexpected job loss or illness will impact a mortgagee's ability to make payments and, when this happens, the key is to act quickly, as there are more options before a Default Notice is served than there are after.

“Don’t be scared,” advises the FRLC. “Lenders make repayment arrangements all the time.”

Many lenders will negotiate short-term variations to repayment schedules as long as there is a plan to get back on track, and there are circumstances in which lenders are obligated to agree to such arrangements. It is important, however, not to agree to payment terms that cannot be met.

“Make sure you think through your plan as to when you will resume making payments. Do not promise something you are not certain you can achieve or is not realistic,” warns the FRLC. “If you don’t know when things will improve, ask for an initial arrangement to be reviewed at the end of the agreed repayment arrangement.”

One of the advantages of recognising a looming problem before you get behind in repayments is that a finance broker may be able to assist you to pinpoint the source of the problem, as well as identify savings that may be available by refinancing to a lower-rate or lower-fee loan. Once there are clear signs of financial distress, this will become much more difficult.

If you are struggling to make your mortgage repayments, Talk to us.

So you've been thinking..... for a while.... of updating your home with a new bathroom, kitchen, rear deck or extending to cater for a growing family. The key is drawing the line in the sand as to how far you will go with your renovations. I have carried out two large renovations over the last 5-years and have learnt many lessons, here are a few:

- Visit multiple home improvement stores and display centers and save photos of what you like.

- Find reliable trades people and ask them to show you photos on their phone of their previous work.

- Make progress payments instead of lump sums before they start and record every payment.

- Keep some money under your pillow for those unexpected discoveries.

- Find your local Bunning's and build relationships with everyone there.

- Be prepared to carry out a few odd jobs yourself.

There are several ways you can fund a renovation depending on how far you want to go. If you are making structural changes to the property or building a Granny Flat, you will need to advise your local council and gain the necessary approvals as well as legally advise your lender as they are the mortgagee of the property.

Funding Option #1- Using your personal savings:

- By far the easiest way to fund your renovation as you are in full control and there is an emotional attachment to these funds. This will encourage you to spend more wisely.

Funding Option #2 - Using your work bonus or tax return refund:

- If your not using these funds to reduce your mortgage, then they can be potentially used to make updates around your home.

Funding Option #3 - Using your credit card:

- Depending on the size of the renovation, you could get away with using your credit card with major suppliers, but you will need to be disciplined with making regular repayments as soon as possible to reduce interest charges.

Funding Option #4 - Releasing equity in your Home:

- If you don't want to tap into your savings, want to avoid making those high interest repayments with your credit card and you have equity in your home, this could be the preferred way to source the required funds. At the same time, it is a perfect opportunity to review your mortgage to see if you can find a better deal.

Example of how this could work:

- You have a mortgage of $370,000 remaining on your property and your property is valued $950,000; and

- You need $100,000 for your renovation; and

- As long as your income can service the new debt (mortgage) of $470,000 and you have a clean credit file, we will find you a lender who can accommodate your equity release.

Funding Option #5 - Construction loan:

- If your renovation plans are structural (i.e 2nd level addition, demolishing a portion of the house etc) and there is a mortgage over the property, you are legally obligated to advise your lender and obtain a construction loan.

- A construction loan has several benefits to the home-owner:

* The builder will need to provide everything to you in writing and produce a formal building contract; and

* The lender will ensure that the builder is certified and holds specific insurance policies; and

* The lender will control the progress payments. If the builder slackens off or they are behind, they wont get paid; and

* During the construction stages, you have the option to make interest only repayments; and

* Once construction has been completed, you can convert the loan into a standard everyday loan.

Feel free to discuss your scenarios with us and good-luck with your plans. I hope it stays well below budget :)

You probably wouldn’t think twice about taking out insurance to protect your car or home, but what about protecting your financial commitments?

Many Australians with mortgages do not have adequate cover in place to service their loan in the event they lost their job, suffered a serious illness, injury or death.

It’s important that you take the time to consider how you would meet your loan repayments should the unthinkable happen.

Could your parents assist with repaying your mortgage debt of $2000-$3000 per month?

Will your friends jump into assist with mortgage and other bill repayments? Can they afford it?

How long can you live off your savings and maintain your current lifestyle?

ALI Group's Loan Protection Plan is a simple, easy to understand and affordable solution that provides peace of mind by helping protect you and your family, your assets and your lifestyle.

You may have heard about Lenders Mortgage Insurance (LMI). This protects the lender when you borrow more than 80-85% of the property value. LMI covers the lender in the unfortunate event a borrower is not able to maintain mortgage repayments and defaults on their loan. LMI provides assurance to the lender that the loan will be repaid to them. This would not protect your assets. Though the lender is covered, you would still be at risk of losing your property.

If you would like to discuss Loan Protection Insurance further or get a rough estimate on a policy, please get in touch.

Real life story - Robyn

Globally, cervical cancer is the second most common women's cancer. Each year in Australia approximately 700 new cases of cervical cancer are diagnosed with this disease.

Robyn was unfortunately one of the 700 Australians to be diagnosed with the disease. Fortunately however, Robyn and her husband had decided to take loan protection when they took out a home loan through their mortgage broker. When they considered their situation, they realised that if anything were to happen to one of them they wouldn’t be able to pay their mortgage. The cover enabled them to focus on Robyn’s recovery without having to worry about losing their home.

Click to watch.