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Financial and Home Loan Brokers in Sydney

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

You might be comfortable paying off your mortgage now, but what if things change? Here are some tips on how to avoid a mortgage stress fracture.

https://www.mastermortgagebrokersydney.com.au - note spelling out how to avoid mortgage stress - stress is spelled in dramatic red lettersPaying off a mortgage is one of the biggest financial challenges you and your family will ever tackle.

And it isn’t easy – mortgage repayments take up about one-quarter of a family’s income on average, according to the Australian Bureau of Statistics’ 2016 Census.

While most families manage, what happens if your circumstances change?

An unexpected redundancy, relationship breakdown, illness or accident can dramatically impact your ability to make your payments and put you in mortgage stress.

But first, what is mortgage stress?

While there isn’t a technical definition for the term, mortgage stress is generally considered to occur when a person or family is spending 30% or more of their income on home loan repayments.

There are also a range of other criteria which would suggest you’re experience mortgage stress.

If you’re paying only the interest on your home loan, borrowing money from family, or having difficulty paying your bills, then you might be experiencing mortgage stress.

I don’t have a problem now, why worry?

It’s unwise to assume your circumstances will never change. An accident or illness can befall a person at any time, and the impact on your finances can be devastating.

An increase in interest rates can also have a significant impact on your mortgage repayments. A simple 0.25% rate hike can increase repayments on the average Australian loan ($375,000) by about $50 a month.

Over the course of a year – and with a potential of further rate hikes – this can really chew into your disposable income.

Ok, so how can I avoid it?

The smart borrower won’t wait for their circumstances to change, they’ll start planning now to make sure they can weather a storm if it hits.

Steps you can take to reduce your risk include:

Step 1: Use a mortgage calculator to see what your repayments would will look like if there was a rate increase. Would you be able to keep up?

Step 2: Review your current income and expenses, and make a new family budget. Use it to track where your money is going and where savings can be made, so you can either pay off your mortgage sooner or get by if things go awry.

Step 3: If you’re worried about your mortgage, or concerned about the impact of a future rate hike, come pay us a visit.

We can talk to you about your situation and help you make a plan to ensure a small problem doesn’t become a big one.

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

In a perfect world you select a property to buy, complete with white picket fence, and the settlement goes through on the agreed date without a hitch. But as we all know, we don’t live in a perfect world.

loan broker - hands shaking across a business deskWhen you buy or sell a property you go through a ‘settlement period’, which is the time designated for the buyer to complete payment of the contract before becoming the owner of the home.

Up until the settlement goes through the home is the property of the existing owner.

And with a large home deposit at stake, you’ll want to ensure you choose the right period length.

How much time should I give myself?

Generally, settlement periods are 30, 42, 60 or 90 days.

In NSW a 42 day settlement period is the most common, but in most other places around the country it’s 60 days.

Just because it’s common, however, doesn’t mean it’s the best fit for your situation (or the seller’s).

You see, both the buyer and the seller must agree on the settlement period.

However, you may have competing motivations, so this can be tricky.

Whatever the case, just make sure you allow yourself enough time for conveyancing, bank financing approval, organising the move, undertaking requested repairs for the buyer, and negotiating settlements for your other property interests.

Also, keep in mind that if you buy the property at an auction, there will already be a settlement date indicated in the contract.

If you can’t meet that date, chat to the selling agent before signing on the dotted line to see if another date is agreeable.

You might push for a longer settlement period if:

– If you’re the seller and you’re still looking for a property to purchase
– If you’re a buyer and you haven’t yet sold your own home
– You’re selling and the buyer has requested you repair something
– If you have an upcoming event that you want to deal with first (wedding, big overseas trip, etc)
– Someone is going guarantor on the loan or you’re purchasing through a family trust
– You’re buying off the plan, as the scheme has to be registered with the titles office
– You need to save more money as a buffer (especially if you’re upgrading or will be renovating).

You might push for a shorter settlement period when:

– You’re a seller who has already found another home
– You’re a buyer who has already sold your current home and needs to move quickly
– A holiday period or big event is coming up and you’re keen to move in beforehand
– You’d like to undertake work on the property sooner rather than later
– You need cash flow.

It’s important to get right

One-in-five property settlements in Australia are delayed by about one week so it’s important to give yourself a comfortable buffer.

While each party can request a settlement extension if a delay occurs, that doesn’t mean the other party has to agree.

This is where it gets a little tricky. Each state and territory has different laws, and every contract differs.

Queensland’s laws are probably the most stringent. For example, either the buyer or the seller can terminate the contract, sue for damages, and keep/lose their deposit if the other party is not ready to buy on time.

Other states have a little bit more leeway.

In NSW and Tasmania an extra 14 days can be given, in WA and SA buyers are given three days’ grace before penalty interest applies, and in Victoria a seller can immediately start charging a tardy buyer penalty interest.

Final word

So that’s negotiating a settlement period in a nutshell.

The best news? That’s about as much negotiating as you’ll need to do. Because when it comes to negotiating a loan with a lender, we’ve got you covered.

If you’d like to find out more about our services, get in touch, we’d love to help you out.

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

Lending regulations have tightened up considerably in the last few months. So much so, it’s time to examine the 11 issues that could put the kibosh on your home loan dreams and aspirations, and some solutions on how to fix them.

stamp text payday loan

Godsend or big mistake?
The fact is, despite their rising popularity and fast convenience Payday or cash loans are definitely a huge no, no if you are looking to apply for a home loan, because any prospective lenders will get the impression that you are financially stretched and are going to be a lousy risk

Slowly but surely the Nanny state grows
With record low interest rates the demand for home loans have not been this high since before the Global Financial Crisis. However, authorities are now stepping up the pressure on lenders to reign in their previous unconstrained lending practices.

This is being done under what is known as the National Consumer Credit Protection (NCCP) act, or Responsible Lending Practices. When first initiated in 2011 there wasn’t too much fanfare about the new rules and in the main, other than a few mild policy changes, it was pretty much business as usual.

That said, in the last few months things have changed dramatically and the Australian Prudential Regulatory Authority (APRA) have been bringing pressure to bear on the banks to start enforcing the new rules to the letter.

Also, along with the current Royal Commission Inquiry into banking practices, the banks themselves are trying to put on a ‘Goody, Goody Two Shoes Face’ to try and convince the Inquiry and associated authorities that their bad behaviour is a thing of the past and they have now turned over a new leaf.

They now want to know what size underwear you use
Young business woman planing, writing and reviewing her finances at city park.Anybody who has made an application for a mortgage over the past few months can tell you that things have become a lot more difficult to obtain any kind of loan now that the banks have gotten serious about the new affordability lending. They are now starting to forensically focus on borrower’s income and expenses in much finer detail. Some lenders are insisting that applicants provide them with their latest bank account and credit card statements so they can ascertain how much goes in and how much goes out on a regular basis.

In other words, they will now know how much your hair cut and dry cleaning bills are.

Many would be borrowers will have to be a whole lot more savvy nowadays if they have any chance to meet these strict new requirements before making any mortgage or personal loan applications.

Financial house cleaning is now in order
In fact, most seasoned mortgage brokers will tell you that you should put your financial house in order at least 3 months in advance of submitting any kind of application. On the other hand though, depending on your chosen lender it may necessitate you do this at least 12 months in advance.

Whether you’re looking to purchase your first home, upgrade to another, downsize, refinance or buy an investment property you’re going have to ensure that your finances are in good order if you want to give yourself any kind of hope in getting any kind of home loan application approved these days.

Here are 11 issues that could scuttle any mortgage aspirations you may have and how to rectify them.

1 RECENTLY SELF-EMPLOYED
Prior to and during the financial crisis you could get loans based on what you told the bank you earned. Yes, that’s correct; they would take your word for it. Entrepreneur, self-employed, business owner and your own boss words on road signFunnily enough they earned the nickname of ‘liar loans’. All the borrower had to do was sign a self certification document declaring what their annual earnings were. I’m sure some bank staff occasionally had a good chuckle when they saw applications from occupations like a bus driver claiming to make $180,000 a year. Nonetheless, they opened a gateway for many self-employed people to purchase their own home. However, the continuing abuse of these mortgages and the global financial crisis soon put paid to these loans.

The market conditions today, show many self employed people struggling to qualify for a home loan. All main stream lenders require that self-employed individuals have had an Australian Business Number (ABN) for at least two years, have been trading profitably for at least two years, and have at least two years financials available. A couple of lenders will accept one years tax returns, but you still must have had an ABN number for two years.

That said, most lenders will also do what’s called Low Doc loans. You still will need to have held an ABN for two years, but now the lenders will rely on your trading bank statements and/or Business Activity Statements (BAS) to calculate your income.

Beyond that there are lenders who will cater to newly self-employed people if they only have had an ABN for 1 day, 3 months, 6 months and 12 months. Of course, they view these loans as higher risk and they come with a premium when it comes to interest rates, fees and charges. Nonetheless, they aren’t the end of the world as they can be used as a means to an end. Meaning, you can have your cake now and refinance the loan to a better rate a little way down the track when you have the required documentation.

Self-certified loans previously offered a way for the self-employed to buy a home, but abuse of these mortgages – dubbed “liar loans” because they required no proof of income – brought about their demise during the financial crisis. The Financial Conduct Authority will officially ban self-cert mortgages in April when the mortgage market review rules come into place, but this has left some self-employed borrowers struggling to access finance.

Self-employed people finding it difficult to get traction in obtaining a home loan may well consider getting in touch with a well-seasoned mortgage broker

2 ANY MAJOR CHANGES IN LIFESTYLE CAN AFFECT YOUR ELIGIBILITY
Bankers like to see stability, it calms their ‘Risk Meter’ down no end (lol). Switching jobs or having another child at the time of a mortgage application can cause lenders to scrutinise your application a lot more closely. If you’re expecting another child lenders will increase your number of dependents immediately even though the baby isn’t quite in this world yet. That in turn will reduce your borrowing capacity. Lenders like to see stable residency and employments.

3 AVAILABLE CREDIT LIMITS OR NUMEROUS OUTSTANDING DEBTS
house and car with money on trap. debt trap conceptLenders get nervous with people who have a lot of existing outstanding debt. So, it’s a good idea to pay off as much debt as possible prior to applying for a mortgage. This will also increase the applicants borrowing capacity when existing liabilities are reduced. Another key point to observe is that lenders go on credit card limits and not the balances owed on them. Therefore, where feasible reduce your credit card limits as much as possible if those limits are affecting your borrowing capacity. You can even cancel then and reinstate them after your mortgage has closed/settled.

Always keep in mind, if you are able to present lenders with a well-managed personal financial profile the better they like you.

4 ARE YOU ON THE ELECTORAL ROLL
Electoral rolls are a handy tool that some lender use to confirm a potential customers identity. If you’re not there it can at times cause some confusion and cause you additional frustration when the lender starts to pursue you for additional ID documentation verification.

5 WHEN WAS THE LAST TIME YOU LOOKED AT YOUR CREDIT REPORT?
It’s important to keep an eye on your credit report, regardless of how good you think it is. Equifax (formerly Veda) will send you a free copy in 10 days or overnight for a fee. Identity theft is rife these days, so don’t let yourself in for a nasty surprise the next time you go for a loan.

6 PAYDAY LOANS ARE NOT A GOOD LOOK
Payday or fast cash loans with their outrageous rates of interest give mainstream lenders cause for concern when they come across them on a borrower’s profile. It gives them cause for thought that any individual who uses them regularly is stretched financially or may be having difficulty managing g themselves monetarily.
It gives the impression that a person cannot make it from pay check to pay check and they use them as a desperate measure to get by on a day to day basis instead of having a practical back up plan if they get themselves into a situation that needs sorting.

7 KEEPING IT AFFORDABLE: DON’T OVER REACH BY BORROWING TOO MUCH
We now have a generation of borrowers who have no idea what 7 ½ – 8% interest rates on a mortgage would be like. At this stage of the game where interest ratesBeautiful luxury home exterior at night, with three car garage, driveway, grass yard, and covered porch are at record lows it’s a great opportunity to take advantage of the situation and pay down a mortgage as fast as possible. Keep in mind mortgage rates won’t always be this low and when they do rise that you will be able to afford the higher repayment amount.
Use your mortgage as a stepping stone to eventually bypass the Jones’s. Start with a smaller property, a smaller mortgage and pay that down with your extra spare cash to create equity that you can use to step into a larger property.

8 COURT JUDGEMENTS, DEFAULTS AND BANKRUPTCY
These don’t preclude you from getting a home loan, nonetheless if you have experienced damaging financial circumstances that have ended you up carrying an impaired credit report then mainstream lenders won’t want to know you.

There are enterprises out there that are known as alternative lenders and they exist in the main to cater to people with impaired credit profiles. Should you find yourself in this situation we highly recommended you find a mortgage broker who specialises in this niche to guide you through the minefield of fees, charges and high interest rates.

Keep in mind though if you have a minor paid default under $1,000 on your record there is a possibility some main stream lenders will still consider you if you have a reasonable explanation for the default.

9 ARE YOU A CREDIT JUNKIE AND LEAVING TOO MANY FOOTPRINTS?
Cooked heroin on a spoon and a loaded syringe on a drug addicts tableEvery time a person applies for credit there is a listing of that credit request noted on the persons credit file. If the number of listings are low there isn’t too much to be concerned about, it may affect your credit score marginally.

That said, if you are frequently putting in applications for credit this and credit that, any credit assessor assessing your mortgage application is going to get a negative impression on how you can’t find what you want and how desperate you are.

Be careful when making financial inquiries over the phone or the internet as the person on the other end could be pulling your credit file without you even being aware of it.

If you’ve ever been declined or have concerns about the number of enquiries on your credit file, use a broker as they can sort through all the various lenders and loans to find the one you will possibly succeed with.

10 GAMBLING SITE PAYMENTS, OVERDRAWN ACCOUNTS AND OVER THE LIMIT CREDIT CARDS
Showing regular payments from your bank account or credit card statements will in most cases get you a swift decline notification as they are definitely a big ‘No-cartoon image of someone being weighed down by too much debtNo’ in this age of responsible lending. Even though payday or fast cash loans are fairly new to the lending world lenders still get nervous when they see them. If you show a prospective lender any loan or credit card statements that have late payments or over the limit notations showing on them you will in most instances get an automatic decline for your application.

11 OVERTIME, BONUSES, COMMISSIONS AND ALLOWANCES
These payments can become a bit sticky when it comes to include them to boost your borrowing capacity.

With bonuses, commissions and overtime most lenders want to see documentary evidence of the same for periods ranging from 12 – 24 months. If there’s any confusion or doubt about the payment amounts the lender will insist on an employer letter confirming the amounts and dates paid.
Additionally, when they do accept the amounts tendered they will shade the total amount by 20% and only allow 80% of those payments toward borrowing capacity purposes.

WHERE DO YOU GO FROM HERE?
Inquire in advance to any lender or mortgaged broker as to what documentation you will need for any given lender application. Keep in mind that any bank or credit card statements you provide are going to be examined for income deposits, outgoing expenses, late payments or over the limit balances.

Examine the above information carefully so you can prepare and present any application you are planning on making it in the best light possible.

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By Dave Fleming : 17 October, 2018

Australian one hundred dollar and fifty dollar note on wall. Selective focus. Concept of money's connection to building industry and infrastructure, home loans or mortgage.Most of the time the home loan industry can be a serious and sometimes frustrating business – perhaps at times even a little over the top too serious. I know Easter Friday still seems a little way off so to help ease you through the next four days, here’s a corny joke to help keep a smile on your face and in your head until 5 o’clock Thursday afternoon.

After all of the issues that were caused through the sub-prime loan market in the USA and the Northern Rock debacle in England, Japan has now been hit with uncertainty.

Over the last week the Origami Bank has folded, additionally the Sumo Bank went totally belly up and the Bonsai Bank is considering options on how karaoke. beauty girls with a microphone singing and dancingbest to cut a whole lot of its branches.

Yesterday, the Karaoke Bank said that they were going to put the bank up for sale and were willing to let it go for a song.

During today the Kamakazi Banks shares did a nosedive and have now been suspended.

Although they have suffered some severe cutbacks the Samurai bank are still soldiering on

Even though they took a pretty good hit the Ninja Bank are saying they still remain well into the black.

Unfortunately though, the Karate Bank had to give 500 of their staff the chop and after some extensive investigation analysts are reporting there seems to be something quite fishy happening at the Sushi Bank where staff are in all likelihood getting a very raw deal.

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