Month: June 2014

Taking a Mortgage Repayment Holiday

Taking a Mortgage Repayment Holiday

Have you hit trouble keeping up with your new home mortgage payments?

Even the most careful planners can face financial trouble when something unexpected occurs.

The good news is that you may be able to qualify for a repayment holiday. Here’s some advice about putting your mortgage on hold while you deal with a financial emergency.

What Is a Repayment Holiday?

A repayment holiday is a period during which you do not make mortgage payments.

The most common reason to request that payments be paused is the loss of a job. Some people ask a lender to pause their mortgage payments during maternity leave or an extended trip.

While mortgage payments may be put on hold during a repayment holiday, borrowers also have the option to pay a reduced amount during this period. . . . . This option is ideal when a person experiences a reduction in income without completely losing their source of income.

Applying For A Repayment Holiday

You’ll have to contact your mortgage lender to apply for a repayment holiday.

If you have been making extra payments to pay off your mortgage more quickly, it will be easier to take a repayment holiday, as you’ll essentially be cashing in on the extra payments that you’ve already made.

However, people who have not made extra payments on their mortgage will have to prove hardship in order to qualify for a repayment holiday.

Get expert advice for a repayment holiday feature for your home loan from mortgagechoice.com.au.

Costs Of Pausing Mortgage Payments

It is important for you to understand that you’ll be paying a price if you opt for a repayment holiday.

Interest continues to accumulate during this period. This interest will be added to the total amount that you owe on your mortgage, so you’ll end up paying interest on the interest in the end.

Taking even a short repayment holiday can increase your monthly payments over the life of the loan.

While the amount added to your monthly payment may be small, the total extra amount you’ll be paying adds up quickly.

For example:

Imagine that you take a repayment holiday for six months after paying your mortgage down for a year.

This short pause can add $50 or more to your monthly mortgage payment.

If you started with a 30-year mortgage, you could be adding over $17,000 to the total cost of your home.

The high cost of taking a repayment holiday makes it ideal for homeowners to opt for a reduction in repayments rather than a full pause of their payments.

You can minimise the financial hit associated with pausing your payments by paying as much as you can each month.

Taking a repayment holiday from your mortgage can help you get through a tough financial situation, but you should remember that there are costs associated with this option.

Contact your lender immediately if you are experiencing a financial hardship. Your lender can help you determine the best option for keeping your mortgage in good standing while you work through your situation.

This article was written courtesy of Mortgage Choice.

Minamalist – Fail

Do you like this?

According to the Architectural Press it’s a great example of Minimalist Architecture.

Now according to Google Minimalism is  “Characterized by the use of simple, massive forms”.

Well this building is massive but would have been anything but simple to construct: Curves, Strange Angles, Massive Cantilevered Rooms.

The building is called Dupli Casa and you can find more photos at: www.homedsgn.com

Personally I think it is a hideous, expensive, architectural W**K . . . What do you think?

For more Unusual House Photos, and Fails, have a look at: What the………………….?

Avoiding Splitting Responsibility

I often come across people who want to exclude certain items of the work from a house building contract to save money.

They may want to do the work themselves, use their own tradie (relative or friend) or use a different supplier to install things before or during the build.

Liability for Problems

The main issue of splitting the House contract is that you can finish up with split responsibility,  giving the Builder a  ‘Get Out of Jail Free Card’.

If there is a problem during construction, or defect that is any way related to the service you excluded from the contract then:

  • Who do you chase for remedy; Builder, Supplier, or even accept responsibility yourself?
  • The Builder, and the Supplier, will usually deny all liability blaming the other.
  • Whoever you believe is at fault you will to take it to an appeal, or arbitration,which will take time and money
  • To support your claim you will probably need an independent professional opinion which will add to the cost.
  • There is no guarantee that the finding will be totally in your favour.

Examples of Issues

Here are a few common issues:

  • Delay If your build contract goes over time one of the Builder’s strategies to avoid paying Liquidated Damages is to claims your supplier delayed the works as they were slower than his normal supplier.
  • Theft Stealing is rife on building sites. Even though the Builder lets your supplier on the site there is normally an exclusion of liability for theft.
  • Damage Scratches, dents, marks, breakages, at best the builder may provide compensation at a level related to the cost related to the value of the cheapest standard replacement. (for example a standard GRP bath not your $2000 free standing ceramic bath)
  • Failure To Work Properly This mainly occurs on issues like plumbing or electrical items. Because of a lack of communication the wrong pipe or wiring has been installed, or the locations are incorrect. Again each blames the other and you can be up for an extra cost.
  • Damage Scratches, dents, marks, breakages, at best the builder may provide compensation at a level related to the cost related to the value of the cheapest standard replacement. (for example a standard GRP bath not your $2000 free standing ceramic bath)
  • Future Building Movement I have heard of people doing their own site preparation including cut or fill. In WA I know some people want to install their own drainage work (Soak wells). If you then get any building movement you may find you have given the builder a get out to avoid bills of tens of thousand of dollars.

I hope this helps you understand the issues, and also the risks, of splitting supply and/or work from the main building contract.

Personally I have always let the Builder provide a finished house and installed any extras later.

 

 

 

 

Access to Rear

With the narrow blocks that are becoming more common you see a lot of new houses built right to the side boundary on both sides.

In some cases that can’t be avoided, but I think there is a real advantage in buying a block with enough room for a path on at least one side of the house, preferably both sides.

Here’s some reasons why:

  • There will be extra costs for special wall and roof details, constructing foundations, and building walls on the boundary.
  • You might have ongoing property maintenance issues if you fall out with your neighbour.
  • If you need to do some gardening you can avoid taking top soil, plants and other dirty things through the garage, or even the house, if the garage doesn’t have a back door.
  • Many properties have drainage or sewerage easements with a Manhole (or in these politically correct time an access pit). If the council/water authority needs access you may need to take time off work rather than just leave a gate open for the day.
  • If you have a dog in the back yard then looking through a gate helps to stop them getting bored while you are out at work.
  • If you want a detached property why have it looking like a terrace?

Perhaps there are some advantages of building to the boundary. If you have found any let me know.

For more things to think about when buying a block see:

Guide to Buying a Block

Fixings on Plasterboard Walls

When you move into a new house there are lots of things that need to be fixed to walls.

For things like small pictures you can use picture hooks . . . . but what about heaviers things like; mirrors, tool racks, and shelves.

You will find that a lot of DIY manuals recommend screwing into the timber wall studs. The trouble is the studs aren’t always in the right location or easy to locate.

One solution I have found useful are Wallmate Anchors like this one.

Last time I moved I bought a box of 100, and used them all in the first six months.

I find them quite easy to use as follows:

  • Make a small hole in the intended location.(The instructions say you don’t need to make a hole but I find this less accurate)
  • Position the small spike in the end into the hole and screw in using a cross head screw driver until the anchor is flush with the wall.
  • Screw your fixing into the anchor

NB. I have not been paid for this post.

See Settling In for more Posts

 

On-Site Stormwater Detention – Storage

Background

Many urban developments, and subdivisions, require stormwater flows from your block to be limited to a maximum flow rate. (See: ‘Onsite Stormwater Dention‘ for the reason why)

Although councils will require the calculations to be done by a qualified hydraulic engineer here is some explanation of the process so you can understand what is required.

Permissible Site Discharge

The ‘Permissible Site Discharge'(PSD), which is a maximum flow rate, will normally be set by your Council based on the block area.

The flow rate is usually controlled by making all the flow pass through a Orifice (a small diameter hole) before it can be discharged.

Designing Storages

Reducing the flow involves the following steps:

  1. Calculating the Peak Discharge from your block. The Local ‘Intensity of Rainfall‘ x Total Impemeable Area (The area of roof and hard paved surface)
  2. Calculating the size of a storage required, the Site Storage Requirement (SSR) to take the rainfall that cannot be discharged until the storm has passed. Your council may require this to be calculated in a particular way and/or using a particular computer program.
  3. Designing the storage to fit on your block.

NB The storage volume is different from rainwater collection volume as the detention storage volume is expected to be empty unless it is raining hard.

Onsite Storage Options

The three options that are available are:

  • Below Ground Tanks. Most expensive option but does have the advantage of being able to located under driveway or garden if you are short of space. May need a pump to empty tank if public stormwater drains are shallow. (Some councils require tank to be emptied by gravity which can make them difficult on some blocks.)

  • Above Ground Tanks These are less expensive than underground tanks but can take up a lot of area so can be a problem for small blocks. Some councils will allow the detention volume to be provided within the same tank as rainwater storage.
  • Basins Basins are the least expensive method of providing storage but require much larger areas than above ground tanks. They are normally a low lying area of the garden which can be flooded for a short period of time. Because of issues such as drowning risk there are often council regulations limiting the depth of storage.

 

See Drainage for more posts

 

 

Tasty Door

Well this door takes the biscuit!

And you can actually eat it.

It was set up by the British company Tate and Lyle as part of a promotion in which they built an edible ‘Hotel’.

Thanks to the British web www.digitalspy.co.uk for this photo.

 

For more Unusual House Photos, and Fails, have a look at: What the………………….?

 

Breaking the 500 Post ‘Barrier’

Welcome to this, the 501st Post on the anewhouse Web Site.

The blog has certainly come a long way over the past 3 and a half years.

The site is currently getting around 8,500 visits a month with over 20,000 pages viewed each month.

Of those page visits the top 5 most popular topics (apart from the home page) are:

  1. Construction Stages
  2. Room Height
  3. Soil Classification
  4. Building on Clay Soils
  5. Waffle Pod Slabs

What do you think is the most useful topic?

Cost Plus Contracts – Avoid

What Is A Cost Plus Contract

Basically it is a contract where you agree to pay all the builders ‘Direct Costs’ plus a ‘Fee for Administration and Profit’.

Rather than a quotation the builder provides an estimate with the actual cost being determined at the completion.

These type of contract are only supposed to be used when it is difficult for a builder to accurately price a job, or the client wants to keep making changes during the construction.

Most building professionals find managing ‘Cost Plus Contracts’ extremely difficult. They are not for the amateur!

The Problems

If the builder hasn’t the expertise to provide an accurate quotation will he have the expertise to manage the contract in a timely and economical manner?

There is no pressure on the builder to work in an efficient way, or select cost effective materials. The more money they spend the bigger their fee.

Who is going to evaluate and, check the builders costs?

Without constant monitoring you will be paying for all the Builders mistakes!

You might have a budget but with the contract requiring you to pay whatever it costs, plus the fee, its easy to blow the budget . . . By a long way.

If a Builder Suggests A Cost Plus Contract

Unless you can:

  • Really trust the builder, and
  • Pay for a full time project manager,and
  • Afford major cost overruns.

STOP and re-think your strategy.

This could be to either seek out builders who are able to give you a quotation, or get your designer to break the work down into more basic packages that can be individually quoted.

See Contracts for more posts

 

 

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