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Financial and Home Loan Brokers in Sydney

By Dave Fleming : 17 October, 2018

finance broker - photo of a young lady's out stretch arm with thumb up trying to hitch a ride

Sticking to a financial plan – such as paying off a mortgage – can be a long journey that’s punctuated by high highs and low lows. Here are some tips to get you through the tougher times.

October is generally the month that people all around Australia and the world dedicate to improving awareness around mental health.

According to Mental Health Australia, 1 in 5 Australians are affected by mental illness, yet many don’t seek help because of stigma.

The thing is, mental health and financial safety are strongly linked, with many studies showing personal finances are one of the main sources of stress.

With that in mind, below we’ve outlined six ways you can help protect your mental health from being eroded by financial concerns.

First, however, we believe it’s important to add that if you’re feeling severely down or depressed, please contact your GP or call Lifeline on 13 11 14.

1. Know the warning signs

Signs that you may not be coping as well as normal include:

– Arguing with the people closest to you about money
– Sleeping difficulties
– Feeling angry, fearful or resentful
– Sudden mood swings
– Loss of appetite
– Not wanting to hang out with family or friends as much as usual.

2. Exercise daily

Exercise releases feel-good chemicals such as endorphins and serotonin. It also gets you out and about, which minimises your feelings of loneliness.

You don’t have to run a marathon or anything either. Just a brisk 30 minute walk each day will deliver both physical and mental health benefits – and help you sleep better at night.

3. Eat well

There’s not much use doing all that exercise if you’re just going to smash a few Big Macs straight after.

Instead, try cooking some new healthy recipes with your loved one, or inviting a friend you haven’t seen for a while to come eat with you.

A healthy diet not only improves your physical health, but it’ll make you feel better too.

The best bit? Cooking uses brain power, which will help distract you from any issues that are making you down or anxious. And they’ll make you proud of your gourmet creations, of course!

4. Reach out to support networks

Make an effort to reach out to and catch up with family, friends and other members of your community.

Don’t wait for them to reach out to you – be the one who initiates contact.

It doesn’t have to cost you anything extra, either. Kill two (or three!) birds with one stone and invite them over for a walk, or a home-cooked meal.

5. Positive sense of identity and an optimistic outlook

Always look on the bright side of life.

For example, if you’ve recently become redundant, look at it as an opportunity to launch into a new job, or finally give running your own business a shot.

Also, adopt a positive attitude to seeking support. Rather than feeling down about seeking help, take pride in the fact that you’ve got the initiative to recognise when you’re not feeling up to par.

6. Improve your financial literacy

Sometimes, our finances can feel all too overwhelming, which in turn, gets us feeling down.

If you fall into that category, brushing up on your financial education can help you feel a whole lot better about things – not to mention equip you with the tools you need to improve your budget bottom line.

Our regular blog covers a wide range of topics that can help you improve your financial literacy.

Alternatively, don’t hesitate to give us a call if you’re worried about your finances, such as paying off your mortgage.

We’d be more than happy to workshop some ideas with you to help improve your situation and get you sleeping better at night.

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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

By Dave Fleming : 17 October, 2018

best mortgage broker - hand weighing cash on a scale against getting a houseShould you make application for a home loan, especially if the loan you want happens to be for more than 80% of the property’s value, with most lenders you’re going to have to show them that you already have a satisfactory amount of savings.

This reassures the lender that you have the capability to fulfill your repayment obligations once you have been confirmed for a loan.

Most lenders policies require that you have a minimum amount of 5% of the property purchase price saved as a deposit.

Although, there are lenders that will loan up to 98% and 100% of a property’s value. However, most mainstream lenders will only lend to 95%.

That is, unless you have an immediate family member who is willing to use equity in their property to guarantee the loan you want (conditions apply).

In these instances you don’t need any deposit and you can borrow up to 110% of the value of the property you want to buy. It’s called a Family Guarantee Loan.

No Deposit Home Loans and LMI

To obtain a loan with any of those lenders the borrower would need at least an 8% deposit in order to be able to capitalise the Lenders Mortgage Insurance premium that will be charged.

Any loan that exceeds 80% of a property’s value will incur a mortgage insurance fee. This is a fee that is paid by the borrower to an insurance company that insures the banks loan in case the borrower defaults on their loan.

What Constitutes Genuine Savings?

The borrowers savings in most instances will be accepted by the selected lender as an acceptable genuine 5% deposit amount if the savings account in the borrowers name shows the required savings have been in the account for 3 months or more.

Alternatively, the savings account had constantly been receiving funds over 3 months or more and now had the required deposit amount.

There are many classifications of savings however these mentioned below may or may not qualify for a home loan deposit:

  • Cash gifting program
  • an inheritance
  • casino/other gambling winnings
  • Cash coming from selling a non-investment asset
  • Incentives and government financing
  • Personal loan

Are No Deposit Home Loans Just a Myth?

That said, if the money can be shown to have been in the borrowers saving account for at least 3 months, most lenders will accept that as genuine savings.

Are there other options for acquiring a loan if I don’t have genuine savings?

The good thing is that there are still loan companies that are willing to provide you with a loan despite having no genuine savings.

These include:

  • Family guarantor loans – a family guarantor loan is where an immediate family member allows the equity in their home to be used as security to guarantee the loan. Conditions do apply. However, most lenders will allow borrowers to borrow up to 110% of the purchase price of the property they want.
  • Some lenders may also accept non-cash genuine savings – some of these include equity in another property, term deposits and shares. In certain cases, the sale of a vehicle owned by the borrower can also stand as genuine savings provided that the borrower shows proof that the vehicle was owned for at least 3 months.

There are some lenders that will allow you to take out a personal loan to obtain the required deposit.

Keep in mind though you will need to show healthy taxable earnings to be able to do that strategy.

Any liabilities you have or create will reduce your borrowing capacity for a new home loan.

  •  A stable rental history could see a loan provider forgive you to having to come up with 5% genuine savings. There are a few lenders who will waive the 5% deposit rule if documentation can be produced from a licensed property management agent showing that all rent has been paid on time and in full for the preceding 6 to 12 months.
    This will highlight your ability to make repayments on time and on an ongoing basis. Nonetheless, you will still need to drum up a deposit from somewhere.

What is the Most Effective Way to get Qualified?

If you’re keen on buying a home and you’re not sure if you will be able to qualify then contact us or a reliable experienced mortgage broker near you and they will be able to assess what you need to do.

Sometimes, all it takes is to understand the situation of the borrower and find a suitable lender with the right policies that can match the borrowers needs.

Brokers are the best bet because they develop their understanding and successful strategies through experience and constant communication with a network of lenders policies and procedures.

Each lender has specific policies and each borrower has specific needs – this is something that the best mortgage brokers understand and matching the borrower with the right lender is what they do very well, especially when it comes to no deposit home loans.

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By Dave Fleming : 17 October, 2018

You’ve probably heard of The Barefoot Investor before. Pre-sales for his upcoming book have already surpassed the final instalment of the Harry Potter series in Australia. But here’s why you don’t have to tread down the tricky path of wealth building barefoot and all by yourself.

mortgage broker sydney - pair of feet elevated off the ground wearing gym shoesIt’s important to begin by saying this is by no means a criticism of what Scott Pape – the Barefoot Investor – teaches in his books.

After all, he has sold more than one million copies. You don’t achieve that without offering your readers valuable financial insights in the process.

He’s also got a lot more people interested in their finances, which is never a bad thing.

But that doesn’t mean you need to take the barefoot and alone approach towards paying off your mortgage and/or building a property portfolio.

What the Barefoot Investor preaches

Scott wrote his first book back in 2004. That was the same year a Victorian bushfire burnt his home to the ground and forced him to walk out with nothing more than a shirt on his back.

It’s a pretty powerful background story. Especially when you consider that over the next two years he re-built everything he lost.

Of one of his most successful books, ‘The only money guide you’ll ever need’, Scott says he can help save you $78,173 on your mortgage and wipe away 7 years of payments.

This sounds great and all. And the content and the practices Scott preaches are quite good.

But it’s like reading a book about how to get fit or how to be healthy.

Knowledge is all but useless if you have a habit of never implementing it or holding yourself accountable.

That’s where we can help

Say you sign up at a gym. Your trainer will make it their number one priority to hold you accountable and make sure you stay on track.

They’ll start you off with a tailored plan suited to your individual needs and goals. One that’s easy-to-understand and achievable enough to keep you motivated.

As you improve, you lift more, your technique improves, and your assets (aka your guns) grow larger. Most importantly, each step of the way you’re being supported and guided by a professional.

Having a broker by your side is no different

We not only help you develop a strategy that’s suitable for your individual needs – we feed you regular knowledge and market updates in the process.

We also pride ourselves on staying in close touch with you to make sure you’re keeping on track with your goals.

So if you’d like to find out more about how we can help, then come drop by (and we promise not to judge you if you rock up not wearing any shoes).

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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

By Dave Fleming : 17 October, 2018

We all know that recycling is great for the environment. But debt recycling? Well, if done right, that could be great for your own little patch of planet earth.

mortgage broker - residentil recycling bins waiting to be emptiedThere are three things that many Aussie property owners wish they could do: make their debt tax deductible, pay off their mortgage sooner, and invest in other asset classes to build towards future wealth.

Well, with debt recycling it’s possible to achieve all three. But it’s a somewhat complicated strategy that’s not without risks.

But first, what exactly is debt recycling?

The idea behind debt recycling is to take the non-deductible debt from your home and recycle it into tax-deductible debt.

That is, to replace your mortgage debt with investment debt.

The earnings accrued from your investments can then be used to pay off your home loan.

If done effectively, not only can you pay off your home loan much faster, you can also generate higher levels of wealth as your home and investments grow in value over the long term.

Who might it suit?

Debt recycling is a higher-level financial strategy that is more suitable for certain individuals including those who:

– Are happy to invest for the long-term (5 years plus), as opposed to seeking immediate returns.
– Have a high marginal tax rate (greater benefits from tax-deductibility).
– Have a good appetite for risk.
– Have a secure income source that is not affected by investments.

The benefits

When executed properly, debt recycling offers a number of significant benefits, such as:

– Allowing you to start investing almost immediately, even if you have no existing source of finance with which to get started.
– You don’t require years of investment practice to begin debt recycling (although it is highly advisable to work alongside an experienced mortgage broker or financial planner).
– It can help you to cover the gap between your superannuation savings and your retirement targets.
– It can help you to pay off your mortgage earlier and relieve your debt burden.

The risks

Though it is true that you can reduce risks by gaining a firm understanding of debt recycling and other investment strategies, you will never be risk-free.

The two major risks you face are:

1. In the same way that you benefit from compounding gains over time, a market downturn can compound losses, meaning that the amount you eventually owe could be more than the value of the portfolio.

2. You could also be at risk of losing your home if you use the existing equity in your home as security for the investment loan.

Is debt recycling right for you?

It’s fair to say that debt recycling isn’t for everyone. Like most things in life, it will depend on your personal circumstances.

So if you’d like to find out more, get in touch. We’d be more than happy to run through your options with you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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By Dave Fleming : 17 October, 2018

They grow up so fast. One minute they’re nagging you for a dollhouse, the next, it’s for help buying a two bedroom unit in an up-and-coming suburb. If you always find it hard to say ‘no’ to your kids, here’s how to say ‘yes’ the right way.

mortgage brokers - man wandering in the desertYou’ve probably heard your children complain about how hard it is to crack into today’s property market.

And smashed-avocado shenanigans aside, they do have a point. It is tougher nowadays.

With the property market constantly on the up-and-up, reaching that 10% to 20% deposit can feel like a mirage for your child.

The good news is that you can help them obtain that slightly out-of-reach home loan by using the equity in your property.

How it works

Banks find it risky to lend to borrowers who have an unstable job or low deposit. But they do allow seemingly more-reliable immediate family members to guarantee a home loan.

Guarantor loans have huge benefits for your children, including:

No deposit required: If guaranteed against a parent’s property equity, your child may be entitled to borrow 100% to 110% of the purchase price of a property. That means no deposit is required. Instead, your child can focus their savings on white goods and repayments.

Discounted interest rates: Guarantor loans can come with reduced interest rates and we can help you secure a great deal.

No Lenders Mortgage Insurance (LMI): Your child will likely not need to get LMI because the equity is usually enough of a guarantee to protect the lender against losses.

Things parents should keep in mind

Sounds great, right? But it’s not entirely without its risks. Here’s what you as a parent need to keep in mind:

Safeguard your credit report: Be sure that you can honour the repayments in case things go awry and your child is unable to pay. You should be positive that they will uphold their end of the bargain, but also prepare for the unexpected.

Financial risk versus emotional benefits: Going guarantor makes you financially responsible if your child defaults on payments. The emotional benefits, however, can outweigh the risk.

Impacts on your borrowing capacity: Future credit providers will take into account the guaranteed loan. They will assess your borrowing capacity based on it, and whether or not you are an active participator in the repayments of your child’s mortgage.

How we can help

We understand that when it comes to your children, it can be near-impossible to take your emotions out of decision making. That’s where we come in.

We can help you calculate whether or not you have the equity to make this work, and assess your child’s financial capabilities to see if they’re in a position to be making repayments.

We’ll also help you understand your legal liability as a guarantor before helping you make the big decision. So give us a call today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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