Reflecting on the incredible performances at the Australian Open this year, we found ourselves reflecting on the measure of a true champion?
#ao #tennis #champion #inspiration #rolemodel #icon
Read MoreOver the weekend I had an interesting conversation with our youngest at his request… about shares. He is ten.
It’s never too early to start talking about finance and money with your kids. In fact, you should absolutely make it a priority and actively make finance and money a topic of discussion around the dinner table.
Overall, people are making substantially more financial decisions over their lifetime, living longer, and gaining access to a range of new financial products; credit cards, loans, investments and super. These trends, combined with low financial literacy levels around the world and, particularly, among vulnerable groups including women and children, indicate that elevating financial literacy needs to become a priority.
Financial literacy can result in improved outcomes when making financial decisions, saving, investment and being prepared for costly emergencies. Confidence with money also means that you’re less likely to experience money worries and you’re more likely to be successful overall.
For most people, their mortgage and property investments are their most substantial budgeting item so it’s super important to make sure that you have your lending structured effectively, to serve you well in the short and long term. We’ll provide you with the options you need to make the right decision and educate you along the way.
Ironically we never really spoke about money growing up in our house(s) and so we are making it a real priority for our kids and we’re happy to talk to yours too! We’re here any time, no matter how big or small the questions might be.
If you’re nerds like us and interested in the research, here’s the link to the full article Financial Literacy Research
#Finance #Money #FinancialLiteracy #Education #FinancialEducation #Saving #Investment #lending #mortgage #mortgagebroker #parenting #success
RBA rate movements and fixed rates are highly topical at the moment due to the low rates being offered across all the banks. I won’t quote rates specifically as there are too to many variations available. But as a guide / range for discussion only, Principal and Interest (P&I) home loan fixed rates range between 2.09% for 1-3 years and 1.99% for 4 years at the moment. Note this is a general guide only and rates differ between all banks.
Some key points:
The RBA has dropped the cash rate to 0.10%, however the majority of the banks have not reduced the variable rate by the corresponding 0.15%.
As many of you will know, I’m generally not a fan of anything that locks you down or inhibits your flexibility. However, fixed rates are at an all-time low and if you want to lock away a portion of your loans on a fixed rate, now might be the time to consider doing this. Note this is not a recommendation, just an observation that fixed rates are very low right now.
But as always, fixed rates are NOT right for everyone and before you decide to look at fixed rates the key points I always want people to know are these:
Fixed rates mean that you will be locked into using that bank for the term of the fixed rate period.
If you need to / want to break the loan at any time throughout the fixed rate period then fixed rate break fees will / may apply. Nb these can be very expensive and you cannot calculate these break fees until the time you want to break a fixed rate loan which means it’s very opaque.
In most cases, you cannot offset cash against a fixed rate loan either. It's not ideal to have a fixed rate loan and spare money sitting to the side, not working for you.
Economists are predicting that rates will remain stable for the next 6-12 months but we can't predict what the future will hold and at the moment banks have not dropped their variable rates. However increasing pressure and competition may see the variable base rates reducing in the coming months too. At the moment all Banks are rushing to try and lock down customers at the moment, which is likely to fuel increased competition going forward (in my view).
As always if you want to discuss your options, or do a health check on current rates, please let me know and we can arrange a finance review.
We know many of our clients will be looking to take up investment opportunities that might be created in this market, so we’ve asked buyers advocate, Craig Shearn to give us a Property Market Update. Craig is a property professional with over 35 years of industry experience in residential and commercial property. Craig's broad expertise comes with deep insights into the property market and its trends - past, present and future.
PROPERTY MARKET UPDATE - Craig Shearn
As a Buyers Advocate and Property Advisor, I have reflected on a number of recent conversations with experienced agents in areas such as the Bayside, Boroondara, the Inner-city suburbs and Stonnington and one thing is abundantly clear...yes the landscape has changed over the last six weeks and yes there has been some price adjustment but ultimately the bulk of properties, are still selling, for in most cases reasonable prices and the evidence of “panic“ seen in the week commencing March 16th, has now subsided.
Effectively, in mid-March when open for inspections and public Auctions were shut down, a number of Auctions were either brought forward, withdrawn or as was more common, changed to Expressions of Interest campaigns or Private Sales, hence Auction clearance rates being touted over the last month were completely skewed for this very reason.
Furthermore, the majority of those properties were subsequently sold, a few at slightly discounted prices initially but most of them with competition, and of course these were properties originally listed by vendors in February and early March. Move on six weeks and the successful use of the online Auction method has resulted in some good outcomes for vendors.
In general, prices in the municipalities mentioned have come off circa 5% to 10% but this adjustment has already happened and effectively in some cases sees values now back at levels they were only 12 months ago! Will prices come off further? Maybe but possibly very little in the coming months because of a lack of supply and a still steady demand for A-class properties in historically solid and popular suburbs. If anything, the return to local community focus because of social isolation will see in my opinion, a revival in local village strips thus underpinning and putting upwards pressure on prices. School locations aren’t moving, parklands aren’t moving so the reasons for values remaining solid and increasing in popular areas, will continue over time.
So what is selling? Properties mainly in the price range of $1million to $2.5 million, apartments, townhouses, single fronted homes, and in some cases double fronted family homes on 500 sqm to 700 square metre land allotments. Potential sellers above $2.5M, generally speaking, are not putting their homes on the market and probably won’t until later in 2020 or early 2021. In other words, why sell now unless you have a good reason to do so when you can still capitalise on record low-interest rates and in some cases a mortgage break for 6 months if required.
However, as is historically the case, when the current situation is clearer and buyers start to re-enter the market having not acted during this unprecedented time in history, there is every chance that the property market will rebound and possibly quickly, particularly in good areas and popular investment suburbs and therefore as a buyer, you may well have missed a good opportunity between now and September, October to buy at a better price point.
If you have secure employment, are well researched, have your finance approved in principle and you are taking a longer-term view, despite what you might be reading, now may well be a time to buy if you are in a position to do so.
Key points to consider if you are looking to buy now;
Be well researched, prepare a detailed brief to provide to key agents in the area you want to buy or if you would prefer to deal with someone at the coal face, consider appointing an Advocate to advise, research and negotiate for you.
Understand there is no guarantee of what the market does in the short term and the property you buy may reduced in value post-purchase but history and a raft of property data tells us property values increase over time, particularly if you sensibly take a longer-term view.
Please make sure you have your finance in place, banking rules and regulations have changed so seeking advice from a professional finance broker such as Thatcher Finance is of paramount importance to ensure you can act decisively and in some cases, with a limited supply of property, quickly.
If you are uncertain don’t buy now but ensure you know what is actually happening in your suburb of choice and don’t only listen to hearsay or broad-brush views which may be affecting the correct decision for your personal circumstance. I’m still to this day amazed how much people can listen to family or friends on their unsubstantiated view of the market and often from people who don’t actually own property.
LENDING UPDATE
This week the Reserve Bank's Phil Lowe announced that "A stronger recovery is possible if there is further substantial progress in containing the coronavirus in the near term and there is a faster return to normal economic activity." With Scott Morrison’s staged return announced yesterday, let’s hope we see a return to a more normal state soon. Although I suspect it will be a different normal for a while yet.
The lending landscape, continues to operate like a game of snakes and ladders. APRA revealed yesterday that while full serviceability assessments would continue to be required for new lending, it would temporarily ease guidance for changes to existing loan terms, including the conversion of a principal and interest (P&I) loan to interest-only (IO). This is really saying that they support the banks in offering non-standard interest only periods to customers in trouble.
For new loan applications banks are now focusing heavily on the industry that you operate in and your socio-economic demographics which has had a big impact for many people who have been heavily impacted by covid 19. Key industries such as tourisim, hospitality and entertainment (and their suppliers) are all being heavily scrutinised.
Generally speaking, all banks have changed their serviceability criteria which impacts peoples borrowing capacity. But banks are still lending and we are still getting all of our applications approved. it’s just taking more time and we are being a little more considered in our approach.
With respect to interest only loans, banks reset policy and made it much harder to simply roll over IO loans about 2 years ago. If you have IO loans expiring within the next six months, or have friends, colleagues and family that need help resetting IO loans please contact me and we’ll explain all the options.
RATES
A recent ACCC inquiry into bank interest rates found that long-term home loan customers with the big four banks are paying interest rates an average of 0.26 of a percentage point higher than new customers. In our experience this is more like 2-3 times this amount when we are looking at new clients that have gone directly to the bank themselves. So please refer your friends and family to us as we’d love to help them if they’re looking to save money.
I occasionally have existing clients contact me and ask me whether I’m aware that their interest rates have increased. Unfortunately, banks will sometimes, not always, try and rachet rates up over time on our customers and because I don’t have access to your accounts after the loan settles, I don’t know this unless you tell me. So if you think this may have happened, it’s a simple fix. Please get in touch and we’ll follow this up with the bank on your behalf to make sure that your loans are still competitive. Remember we work for you and not the banks.
In a matter of weeks the major banks have started to make changes to their lending policies and lending criteria around income assessment, the industries in which people work, where people live and their level of exposure. Some banks have also lowered their LVR (loan to value ratio) and property valuations are starting to come in a little lower to reflect the changed propery market conditions.
Mortgage brokers are frequently receiving new guidelines from the banks in a very fluid lending climate and pre-approved loans are also being reviewed in some cases.
Self Employed & Business Owners
For self employed people and business owners, all banks are now requiring increased information including quarterly BAS statements to confirm revenue and supporting bank statements must not be any older than 14 days when the loan is being approved. Valuations are also being reviewed depending on how current they are. The industries receiving the most scrutiny at the moment are travel, tourism, hospitality and retail and any businesses connected to these industries.
Commercial Lenders
Banks are becoming increasingly nervous when it comes to commercial lending and are using this period as an opportunity to increase rates. Customers are being asked to supply an increased level of supporting documentation which must be up to date and commercial property valuations have decreased in the last four weeks. We expect that commercial property values will be under pressure in the coming months.
Investment Lenders
Investment loans are harder to secure in the current environment as banks are looking to reduce their exposure to this market which means the availability of credit has decreased. For investment loan applications, rental income may be discounted and some banks have already reduced customers ability to draw equity out. Banks are also applying more stringent lending crieria which will reduce many borrowers' lending capacity. However on the upside, as we always say, "change creates opportunity”. If you’re able to draw equity from your current portolio, you may be able to position yourself to take advantage of the reduced property market conditions in the months ahead.
Where to from here?
Our advice would be to review your lending as soon as possible. Firstly it will give you a degree of confidence and comfort in the uncertain months ahead especially if you’re unsure about whether you’ll be able to remain employed and so to some degree it may help protect you if economic conditions worsen. However if your employment is uncertain, please proceed with caution.
How can a mortgage broker help?
Many of us have been devoting more of our time to developing new working from home arrangements and home schooling, which leaves little time for anything else. If you’ve ever considered using a mortgage broker, now’s the time. We’re more up to date on the current lending market, we know where you'll find the most competitive rates (and we’ll negotiate on your behalf) and get the process started quickly. Timing is critical at the moment, so the sooner you can start the review process, the better.
This may not be the Easter weekend we were hoping for but it's a perfect time to think outside the square, start new traditions and enjoy our family time.
Here are some ideas to get you started:
- Egg someone's house (we're talking about an easter egg drop n run!) which is guaranteed to result in smiles all round.
- Try making your own hot cross buns with this Gourmet Traveller recipe
- Host a Masterchef cook off with each family member making a course for Sunday lunch
- Paint a Rainbow for your window or get creative with street chalk art - https://ab.co/2Rt0UGS
- Decorate your table with ideas from Home to Love
- Try eating your eggs a little differently this year (our favourite is the tiramisu easter egg)!
- Enjoy watching "Hop" starring Russell Brand this Easter -
and
Fit in some exercise to counteract the chocolate consumption!
From our family to yours, we hope you have a wonderful Easter weekend.
There are various loan deferral programs being offered by the banks for clients in need at the moment...
For customers who have had a significant drop in business or salary income, they are eligible to defer home and or business principal repayments for 3-6 months. E.g. taking a payment holiday.
Banks are taking requests for these deferral requests on a ‘case by case’ basis at the moment so this is not a fast process unfortunately. Given the unprecedented number of applications that the banks are dealing with, they are frankly overwhelmed with calls and emails. To address this, many banks have set up online portals to register these requests which can be better than remaining on hold for long periods of time.
If you're experiencing financial hardship and need a break from your loan repayments, please find the links for the major banks below:
We're sorry we're unable to help you with these deferral requests directly. The directive from the banks is that they want to understand customers individual hardship circumstances before they will approve a repayment deferral.
If you need to defer repayments please remember, this is usually only deferring the principal, and bank interest will still accrue as per normal. E.g. banks are not waiving interest on loans, just deferring repayments at this stage.
Business loan deferrals are separate again, so please call us for advice in this area.
If you need to discuss your circumstances and want to know your options, please feel free to contact us anytime - 1300 76 40 30.
Australia’s big four banks have announced a range of measures to support customers through the corona virus pandemic, as outlined in this article here: https://bit.ly/2wB1z1V
If you need to defer repayments because you’ve been impacted by the fast-moving economic downturn, please contact your banks directly to see how they can help. At the moment this is assessed on a case by case basis, whereas we think it should be offered to all customers across the board, so it’s implemented with greater speed and efficiency. With a number of people finding it challenging to make contact with the banks, and it also being hard for the banks themselves to deal with the volume of enquires.
We would also caution you to be careful about new bank offers particularly around fixed rates. Banks are quick to market themselves as good corporate citizens, but are also quick to capitalise on the market opportunity this crisis has provided them.
There are some 'Pros and Cons' to consider.
There have been two x 0.25% rate cuts in the last month, but most banks have only passed on one of these rate cuts. Instead the banks are offering to ‘lock customers’ into lower fixed rate loans for 1-3 years. Banks are offering these cheaper fixed rates, because they haven’t passed on the variable rate drop. So, in effect they are robbing Peter to pay Paul.
What’s wrong with this you ask?
Four major considerations really.
1 Banks love fixed rates because it locks customers in and restricts their choice. Fixed rates coincidentally are highly profitable for the banks.
2 Fixed rates don’t suit everyone, and therefore banks get to keep the last rate drop which goes to their bottom line and variable rate customers are paying for this when we should be getting the reduced rate benefit as announced by the RBA.
3. If you fix your loan in, the banks know it’s highly likely you may need to break this fixed rate loan early. The banks charge a non rebatable break fee, which can be in the thousands of dollars and you can’t calculate this until you need to break it. E.g. a hidden cost
4 You can’t offset surplus monies (like you would with a variable rate loan that has an offset account attached) against a fixed rate loan so it might cost you more in the long term.
Our advice is to think very carefully about your situation before switching to a fixed rate loan. In times such as these, flexibility and having access to surplus cash is critical.
If you feel like you could benefit from a lending review because you’re paying too much, lack flexibility, access to equity or are looking to create opportunities in a down market, please get in touch. We’re open for business. Call us for a phone appointment and make good use of your extra time at the moment.
#finance #news #lending #coronavirus #lending #money #newnormal #homeloan #mortgage #businessloan #commercialloan #businessowner #business #mortgagebroker #mortgagebrokeraustralia
We’ve been saying for a long time (and now the RBA is finally agreeing with us), it doesn’t look like interest rates will be increasing any time soon.
So now we move into a new phase, where the banks are pre-emptively offering really low fixed rate products (around 3.65 to 3.99% depending on the loan term) which appears to be a good deaL… but are they really?
What happens when you come off the fixed loan period?
Low fixed rates are, generally speaking, an incentive to get customers to switch banks or loan products which at face value is fine however many people forget to consider a critical metric – the comparison rate. This is the average real rate that you’ll be paying after you come off the fixed rate (including fees), honeymoon period, etc, which is normally much higher than what you should be paying on a well discounted variable rate.
As former bank execs we know what you may not - which is that one of the banks most profitable 'products' is fixed rates whilst an added benefit is that it creates a sales opportunity to gain market share and lock customers down rendering them (largely) unable to switch banks. The bank sales pitch for low rate fixed typically focus on helping customers / families to budget, keep costs down, and control their costs in an every changing world, etc.
The downside to locking in a fixed rate loan
If you lock in a fixed rate you’re generally paying a premium to do so; signing up for a loan with a higher comparison rate. The comparison rate which is the rate you pay after the fixed interest period, is far less competitive than it should be. If you want to break your loan early (for any reason), then most banks charge a break fee that can be in the thousands of dollars and is very difficult to calculate. Whereas if you leave your loan on variable rates, this allows you to keep your options open and be in a position where you can seek the most competitive rates, anytime you like.
Whether fixed or variable rates are right for you depends on your life circumstances and financial situation. If you’d like all of the options explained to you from someone who is impartial to a bank, contact us on
1300 76 40 30.
#homeloan #mortgage #fixedrate #rba #finance #mortgagebroker #realestate #property #experts #advice #strategy #lending #bankinginsider #thatcherfinance
Yesterday the ABC ran a story on CBA and mortgage broker commissions:
CBA BACKTRACKED ON MORTGAGE BROKER PLAN FOR FEAR OF LOSING MARKET SHARE, ROYAL COMMISSION TOLD
This is why the banks have a low trust score….
CBA’s CEO yesterday sold the story that if they were the first bank (of the big 4) to reduce brokers commissions they were worried about losing market share. What they didn’t say is that they’re working with the other big banks to deliberately reduce broker commissions, knowing that they are eliminating competition that will leave customers once again at the mercy of the major banks to negotiate their own loans.
CUSTOMERS WILL BE WORSE OFF
Morgan Stanley research recently found that Westpac would report the largest profit increase if trail was removed (2.2 per cent), followed by Commonwealth Bank and ANZ (1.9 per cent) and NAB (1.3 per cent).
Brokers do come at a cost to banks however they’re significantly less than the cost of operating branches and come with the added benefit of loan applications being submitted by mortgage broking professionals that have higher levels of banking experience and year on year training and adhere to a higher level of compliance in many cases.
Morgan Stanley also found that broker upfront commission payments make up approximately 4.6 per cent of CBA’s overall costs, Westpac’s at 4 per cent, ANZ’s at 3.1 per cent and NAB’s at
2.5 per cent. A tiny amount given that 55%! of all mortgages are now generated by brokers.
Any suggestions that reduced broker commissions will be returned to customers is laughable. The banks' agenda is as simple as it is obvious, say sorry for all the past sins, seek to reduce
competition without brokers, and then double mortgage margins over the next five years resulting in a massive windfall to the major banks and their CEOs.
The fact is that all our clients get better advice, lower cost loan packages, and save thousands in the process without costing them one dollar. Because today we are paid a fully disclosed commission by all banks, which is the same amount so there is no conflict to recommend one bank over another, and we've never had one customer object. Yet this isn't the story the bank CEOs are selling the royal commission and the media.
If the banks are successful in reducing trailing commissions this could reduce the number of brokers in the industry and or wipe it out entirely leaving customers without any independent advice or choice of products.
Trusting the banks that they will reduce margins and improve service to customers because customer aren't using brokers and are going direct to them is like being time warped back into 1975 and hearing a CEO from a cigarette company telling kids that smoking is good for you and we all know how that ended...
Loan repayments are THE single biggest expense for most families yet ironically most people feel like it's too hard to fix. The truth is, it isn’t! That’s where we come in.
Your home loan repayments are no different to your utilities bill… if you don’t review your mortgage or investment loan every 12-24 months or so, it’s likely that there are better product options in the market that better suit your current lifestyle.
Your loyalty to your lender could be costing you thousands of dollars each year. Refinancing could achieve a lower interest rate which can make for significant savings over the long term. For example, if you have an average $500,000 size home loan on an average variable rate of 4.30% p.a, you’re paying $2,466 a month on your home loan. If you refinanced that average home loan to a rate of 3.70% p.a, your monthly repayments would drop down to $2,294. That’s a saving of $172 per month. Over the course of 30 years, you’d save $46,500.
Here’s why we recommend reviewing your loans every 12-24 months:
COMPETITIVE INTEREST RATES
You could achieve a lower interest rate than what you’re currently paying which over the course of a number of years, could make up the deposit on an investment property or fund a renovation.
ACCESS AND USE EQUITY
Refinancing can give you access to equity that you can use to invest in other assets such as a new home, investment property, etc. One of the key advantages to this is that you can purchase an item with the same interest rate as your home loan, rather than the higher interest rates charged on personal loans, car finance or credit cards.
NEW LOAN FEATURES
Loans go through product developments just like any other product or new technology so there may be new features that can help you reduce your interest repayments such as additional repayments, portability and, offset accounts.
PAY LESS FEES
When you refinance with a broker you may benefit from waived application or establishment fees, ongoing fees, valuation fees and monthly fees.
SIMPLIFY AND OR CONSOLIDATE DEBT
There may be benefits to consolidating your debt by rolling your existing debts into a single, more manageable loan with a competitive interest rate. This can result in reduced fees and interest repayments. Our aim is to save you money wherever we can during the loan process.
LOAN TO SUIT YOUR LIFESTYLE
Depending on your life stage, your requirements can vary widely when it comes to lending. Our aim is to achieve a level of flexibility to give you the freedom to do what you want to do in life.
For life transforming advice, call us today on 1300 76 40 30.
For some Australians the answer to how they're going to fund school fees is through scholarships! Whilst this IS a great idea for a small percentage of the population, the rest of us need to plan how we’re going to fund our children’s education.
When we’re talking to our clients about how their finances are structured and their life goals – new home, new investment property, renovation, private education and a great lifestyle, the conversation inevitably turns to the affordability of school fees.
The cost of private school fees range between $150,000 to $350,000 per child based on the school that you decide to send your children to and how long then will attend. Some students will start in prep whereas many parents will aim to start their children in Year 5 or 7. Either way, it is a significant life expense and although we know the day is coming, many people do not plan adequately for it nor have a solution for how to finance it.
Previously the head of the education sector for NAB and Westpac, Barry Thatcher who is now a director at Thatcher Finance, has it on good authority that the majority of schools increase their school fees on average by 5% per annum. Therefore its essential to have a good funding structure in place when the costs of education are only set to increase.
Barry explains that, “Saving your money in a savings account or term deposit simply won’t cut it. it’s not enough to cover rising school fees, increasing at almost twice the term deposit rate”.
Just the same, when you do receive that whopping invoice from the private school of your choice (trust us, we know all about it!), it makes good sense to understand the finance options available to you, whilst leveraging the lowest interest rates possible.
As parents it’s always a balancing act, between paying for school fees and still affording the extracurricular activities and holidays that go a long way to making happy memories with our kids (especially during those years where they’re still happy to spend quality time with us!). For advice on the better way to structure your finances and review your existing home and investment loans which may well save you money, please contact us. Our services are complimentary to you and we will help you structure your finances so that you can manage the school fees and maintain your ideal lifestyle too.
No one ever talks about the challenges of securing the finance for your new home, renovation or property investment. With the value of land continually on the rise, we mostly hear the good news stories… I bought a house and doubled or tripled my money over a number of years….
No-one talks about the problems they had applying for a loan, the number of banks they had to approach before their loan application was approved, how the whole process was painful or that the loan they accepted was more expensive than what they really wanted to accept but were backed into a corner with timing. If this has been you in the past, you’re not alone.
The truth is that it’s not just you, and that dealing with banks is just getting harder and harder. Bank TV advertisements depicting helpful, knowledgeable, and concerned Branch managers acting in your best interests can be a far cry from the reality.
There has been a huge amount of mortgage growth in recent years, and banks are looking to restrict your access to finance. To control and limit this growth, the banks have used regulator announcements as an opportunity to increase interest rates (margins) ‘out of cycle with the RBA’ on most home and investment loans. They’ve also made their assessment criteria more rigorous, making it much harder for people to get into the market. Regardless of whether you are a home buyer or wanting to buy an investment property for the first or second time the process of securing finance is becoming more challenging.
The fundamental difference between working with Thatcher Finance and using a bank is that we work for you and not the banks. Our aim is to explain all of your options and educate you on what’s achievable so that you can make an informed decision about which bank and loan is right for you, versus the banks which only offer their own products to you. They can’t offer you market wide choice and often lack the depth of experience to really educate you about your finance options.
Thatcher Finance will prepare a comprehensive finance application as opposed to the banks who make their decision based on the information that you provide. Even if this information is inadequate, this is what their decisions are based on. For some people this results in their application being declined with little or no feedback provided.
So here’s are our recommendations for putting your best foot forward. And don’t worry if this seems all too hard, because we are here to help you, if you need it;
Get organised!
Have your tax file numbers, proof of income, banks statements and expense and or credit card statements in order.
Know your expenses
All your expenses are taken into account when applying for a loan, people are sometimes shocked and even a little embarrassed when they really understand how much they are spending. Don’t worry… you can use the process of applying for a loan to get your house in order which may include reducing and consolidating expensive credit cards or loans.
Know your borrowing capacity
Never assume or risk that a loan will be approved by the bank. Instead find out well in advance of buying an asset if you can get the financed needed. Sounds simple, but this is a very common mistake people make which puts them at risk of losing their deposit.
Have Equity in your corner
If you have other assets such as property or a business, make sure that you have a current valuation so you know what your real position is before committing to a new acquisition.
At Thatcher Finance we provide advice to you based on your personal situation and future plans. We explain the best way to structure your finances so that you have flexibility and have a plan in place to grow your property portfolio whether you are a first time home buyer or experienced investor. We are not aligned with any bank and our services are free to you.
Thatcher Finance is offering a Complimentary Property Valuation until October 30, 2017 for clients wanting to review their finances. Call us on 1300 76 40 30 today.
Our economy isn't shooting the lights out, so why would the Reserve Bank want to increase rates in the next two years? If anything, it's likely to be steady as she goes, with an outside chance of another rate drop. We attended a Big Four-Bank economics update two weeks ago, which advised the same sentiment. However, despite this advice the banking market are increasing fixed mortgage rates. Why?
One of the Banks most profitable 'products' is fixed rates, and they love to sell the story that they know best and that we should trust them. As a customer if you fix rates you are generally paying a premium to do so. If you ever need to break your fixed rate loan early, most banks charge an unfriendly break fee, sometimes in the thousands of dollars. If you leave your loan on variable rates, this allows you to keep your options open and in a position where you can seek the most competitive rates, anytime you like.
Banks and financiers are currently trying to increase all borrowing rates with various 'out of cycle' rate increases. Why? Because ultimately Banks report to their shareholders and so to achieve continual revenue growth in a market where the general system growth isn't increasing, they need to increase margins from their existing products and customer base. In a constant cycle where Banks feel compelled to announce record profits each year, a false economy has been created and as a customer you may be paying for it.
Whether fixed or variable rates are right for you depends on your life circumstances and financial situation. If you’d like all of the options explained to you, contact us for an appointment on 1300 76 40 30.
Most of our clients understand that sometimes the process of securing finance can be painful and time consuming, which is why they appreciate working with us! As our clients quickly discover, when acquiring new properties, the benefits of working with a finance broker far outweigh approaching the banks directly and here's why:
We know our clients and we're your advocate
We work closely with our clients so we develop a deep knowledge about their lifestyle and business plans, acting on your behalf. We see ourselves as your partner and take a holistic view so we offer better, bespoke solutions.
Expert Advice
With more than 50 years collective industry experience across our three principals, you’re able to access independent advice across a range of banking and finance products that you might not otherwise consider. There are many steps in the loan process and we’ll provide advice at each step along the way.
Strategy
We never look at a finance application in isolation. We’ll make sure that you have a strategy in place for the short, medium and long term, which will allow you the flexibility to grow your assets and wealth over time.
We'll do the legwork
We act on your behalf, effectively tendering out your finance requirements to achieve better outcomes than you might otherwise be able to achieve by going directly to a bank. The more competitive tension there is for your application, the better outcome we’re going to achieve for you.
Saves time and energy
Anyone that has researched finance options or applied for finance will tell you that it can be a tiresome and frustrating process, potentially costing you time and money. We’ll manage the loan process for you making sure that you secure competitive rates and that the process takes place in a timely manner.
We are always here to help
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Fixed rates are good for banks, but maybe not for customers
Great article from Duncan Hughes at the AFR which discusses why banks want to lock customers into with fixed rates. However, what the AFR’s story stops short of saying are the following key points all consumers should know. I will also disclose up front that I'm generally not a fan of fixed rates.
There are often better variable rates available with the right knowledge and negotiation.
Fixed rate loans are one of the banks most profitable products because the rate is generally higher than the variable rate.
Two to five years is a long time in anyone's life and a lot can change. New house, new job, change in relationships, etc. Many customers believe that they’re saving money when they lock in a fixed rate. However, they may be hit with very hefty break fees and penalties (in the thousands), when they need to break their loan during the fixed rate period as a result of one of these life changes.
Avoiding risk and possible interest rate increases is the sales pitch, but really the main aim of fixed rates is to lock customers in so that they can’t switch!
Nearly all customers we see that have had fixed rates wish they hadn't because they’ve either paid a premium for the fixed rate, or they have incurred a break cost to get out of the fixed rate contract.
I recently attended a Bank economics session that predicted rates would continue to fall by possibly another 0.50% in the short term. Immediately afterwards they recommended customers attending should consider locking in rates now. Umm...?
The simple fact is that rarely do fixed rates present better value than what can be negotiated with variable rates, because any fixed rate you're offered has margin built in to hedge the banks future risk. The irony here is that customers wanting to avoid risk by using a fixed rate, may actually be placing themselves into a more risky position and open to higher costs later on.
Check out the AFR article here: http://bit.ly/29HuqpU
At Thatcher Finance we are specialist finance advisors and mortgage brokers for professionals, investors and businesses owners. Our sole focus is to educate our clients first and then work to get the optimum finance package for residential, investment or business lending.
So if you need good advice and an expert in your corner, don't wait any longer, it's most probably costing you money.
Call us to today to arrange an appointment now on 1300 76 40 30. It could be the best meeting you've had this year!
We recently presented at a conference for Pharmacy Professionals and like many business owners, they wanted to know what they could do to improve and grow their business.
We take the view that you need to look at your business holistically which means considering innovation, staff, risk, finances, and performance indicators.
Our top five tips for running a successful business and ultimately growing personal wealth are as follows:
1. Innovation: Challenge the status quo. There are always new products and ways of approaching business and your own personal financial situation. You may just find that new technology, finance and insurance arrangements are all areas where you can improve your business performance and mitigate risk.
2. Establish your top three indicators: Work out the top three pieces of information that you need to know off the top of your head that indicates how your business is going. This may be sales figures, cash flow and staff costs for example. If there’s a dramatic change to any of these, you can address it quickly.
3. Keep your staff happy and motivated: It’s so important to have fun at work and it’s great for productivity too. Happy and motivated staff adds to the top and bottom line of your business and can help to solve little problems before they become big problems.
4. Protect your business: As a business owner you’re also exposed to certain risks. A catastrophic event, a legal matter or health issue can put everything you’ve worked for, in jeopardy. Make sure that you’re adequately protected which will give you peace of mind and allow you to concentrate on running a successful business!
5. Review your finances. Debt can be a shackle to some and others a useful tool to increase wealth. Don’t wait for your bank to suggest how to use it as a proactive tool. You need to regularly review your debt and avoid entanglements so that you can make the most of business and personal opportunities.
Call us today to review and compare your finance and insurance arrangements on 1300 76 40 30.
Is fixing rates good or bad? The RBA has just cut interest rates and many of the banks chief economists are forecasting future cuts to the cash rate. So why do banks want to lock their clients into fixed rate loans?
Don't be locked in to fixed interest rate loans without seeking expert advice. This seemingly simple decision could potentially cost you thousands. As a brokerage with experienced staff and extensive industry knowledge gained from working at some of Australia’s leading banks, we offer our clients insightful advice and a range of effective options.
The banks are competing for new customers at the moment and offering good incentives to win your business. Don't procrastinate any longer! Book an appointment with us ASAP to review and compare your finance arrangements on 1300 76 40 30.
Thatcher Finance is a specialist Finance broker firm, offering unrivalled advice on home and property investment loans, giving you market leading outcomes. As preferred brokers with Australia’s leading providers we’re able to negotiate highly competitive lending rates and solutions compared to you going directly to a bank.
Best of all we work for you, are agnostic towards products, and our services come at not cost to you.
Our aim is to transform the finances of our clients and save them money compared to what they’re currently paying or offers that they’ve received from the banks. We’ve been able to do this for EVERY one of our clients, so we’re super happy with that!
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