WEBVTT
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Hello everybody, it's Kirsten from the Semple Property Playgroup, and I'm here with one of my oldest friends.
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Playgroup.
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Did I say play group?
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Did you hear play group?
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I think I did, but I was too busy thinking what I was about to get out and get it out of the way.
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I can't believe I said it's playgroup.
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Get it.
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Definitely not playgroup.
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You have to leave that bit in.
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I'm here with one of my oldest friends, Matthew Stammers.
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Matthew and I went to Bibra Lake Primary School together in the 90s.
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I can still sing the song, but I don't know if he can.
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No, he cannot.
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And Matthew is a mortgage broker.
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Matthew is the mortgage broker.
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He has got me loans when I was in a situation that was not favourable.
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And I still didn't have to go with a third-tier lender.
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We had to move things around and make things work, but I am yet to have a decline.
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So Matthew is the best in the business as far as I'm concerned, and I've done a lot of lending over my very short life.
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Matt, for anyone who's listening that hasn't used a finance broker, what do you do?
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We find finance or get finance for people looking to buy their house.
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We have access to multiple different lenders, as you say, top-tier lenders, the big four, second-tier lenders.
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And yeah, essentially we just find the best rate and best product for clients and for their situation.
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So for someone that hasn't ever used a broker, who pays you?
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We get paid by the bank.
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So our service to you, the client, is free.
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So yeah, it's it's a win-win.
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And you've done a lot of loans for me over the time, owner-occupier, um, investment property, um, purchasing different ent in in different entities.
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What is your niche?
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What is your favorite type of lending or something that you can do in your sleep?
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I think I'd say most brokers would probably say the same thing, just a nice 80% deal for an owner-occupied purchase would be ideal.
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No, there's not many of those that, well, they're never just that simple.
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Um every deal seems to be different.
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Dealing with each bank is different, so it's just finding the right product and the right place for each person.
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And would you agree that the interest rate is not the be-all end-all indicator of who you're going to tell your client to go with?
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Oh, 100%.
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I feel like at the moment people are very rate conscious, especially with the RBA moving rates as frequently as I have over the years, that that people are just very conscious on rate.
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But there is definitely a lot of other aspects to a loan that that can if you set it up properly, it will be more beneficial to you just than worrying about what's the best rate that's out there.
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Yeah, I think that's such an important factor as why I would always recommend someone see a broker and not go to the bank direct, is that factor of the layperson will look at an interest rate and go, I'm on a sharp rate, you're on a not sharp rate, but not look at the whole picture as a as a complete package.
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Yeah.
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What are the other things involved?
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What is the flexibility or non-flex flexibility?
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Um, I've recently been with a bank that we're moving away from, and I won't name any names, but um, they capped the frequency I could make payments.
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So it was monthly, not weekly.
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They didn't allow a certain amount over the repayments to be paid in without a penalty.
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Um there was quite a few restrictions they had, whereas the bank that we're moving to doesn't have any of those restrictions.
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Yeah, and that's the thing, and that's where a mortgage broker really comes into their own and and gives you that advice and says, hey, we can go with this bank because they're the rates of the cheapest, but you're going to be hand hamstrung this way or um yeah, where it's just finding the right product for that client in whatever situation you're in.
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And I think something that I tell people and they are always shocked by, but I probably can't explain why, everyone should be paying their mortgage weekly where possible, shouldn't they?
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Yes, but not always.
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If you've got an offset account, put it as one as soon as you get paid, if you get paid into that offset account, it's like it's beat sitting on the home loan anyway.
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So whether you pay weekly, fortnightly, or monthly, it doesn't matter.
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The main thing that you can do is pay extra into your home loan.
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That's the best thing that you can do.
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Okay.
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So get rid of after pay and put that money into your home loan.
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100%.
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Half-to-pay, credit cards, and and the works of some of the biggest bugbears in our industry.
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Yep.
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Um, and a lot of the time people don't realise they have some of them.
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If you've gone to Harvey Norman and bought a couch five years ago, what you don't realise is they've possibly set you up with a credit card as opposed to a loan.
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So once you've finished paying it off, that credit card is still active.
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Yep.
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Uh I that is something that never fails to amaze me when I get sent a credit card that I didn't request, that it's part of the fine print that I accept the terms and conditions of this agreement.
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And I'm someone that doesn't have a credit card.
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I don't run well with money that's not my own to spend, but I'm very self-aware.
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Um, so having a credit card is not something that I want, need, or aspire to have.
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So when I get sent one, I get a little bit pissed off.
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Don't give me money.
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Um, I have got a stack of questions just from people in Semple and also totally transparent, a lot of my friends who they either own their home or they are looking to buy their first home or they are thinking about buying an investment property.
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So it's really the market that probably you and I deal with most, um, which is residential real estate.
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Um, this one is I think you could probably have five answers too.
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But what is the biggest mistake a buyer makes before applying for their finance with you?
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What's the one thing they can do that's absolutely going to make you scream into your morning coffee?
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Um, I think it's just unsecured debt.
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When people have personal debt because they spend too much money, um, after pay, things like that affect your borrowing capacity.
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Yep.
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Um, before they see you as much as they can consolidate unsecured loans, personal loans, after pays, credit cards.
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Is there anything else they should be tidying up as much as they can without stressing their cash flow out?
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If you are pushing yourself to the limit with your borrowing capacity, does cleaning up your what you're spending your money on, they do look at your bank statements for the last six three to six months.
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So that can play into it.
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Aaron Powell That's such a good thing to consider.
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So look at your bank statement for the last three months and get rid of any direct debits that are unnecessary as an outgoing, because that'll be considered.
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Either direct debits or even just your everyday spending.
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If there's a lot of gambling on there, banks banks will accept a little bit of gambling.
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But if you are gambling heavily every Saturday at the races, it shows up and banks don't seem to like things like that.
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That is such an interesting thing that I probably wouldn't have recommended to people, but it is in the world that we live in where you just double click to update your your tab account, T A B, T A B, T A B, T A B, it's probably the regular transactions that banks would worry about.
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And it's a pattern.
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Sorry, it just gives banks an a a reason to be like, well, if we're on the line borderline with this dis this application and we're not sure whether we want to approve it or decline it, they can see those sort of transactions.
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They just sort of question what's this person's sort of ability like or where they're where they're sort of spending their time or spending their money.
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I love that advice.
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Let's start looking at our transactions once a day and seeing what is the reoccurring and cut it out.
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Mine's Uber.
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Um can you really simply explain how does a bank actually calculate what you can borrow, your c borrowing capacity in a really simple Essentially it's your income versus your expenses.
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That's how they first start off.
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So if you've got your income, say 100 grand, they'll work on and then your your children, how many kids you've got, and then your expenses.
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So they'll work out a figure for your living expenses.
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Um and uh work out your expenses, and then from there they'll work out what's your net figure that you've got left to sp to spend on a mortgage.
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Okay.
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Yeah.
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So taking into your income, get rid of your expenditure, and then that figure is what you can afford on a repayment over a loan.
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Yeah, correct.
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And a loan a loan's 40 years now?
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Uh you can get up to 40 years, but they're only under very circum circumstances.
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Normal is at 30 years.
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30 years.
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Yes.
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30 years.
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Yeah.
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Why does the borrowing capacity vary so much from lender to lender?
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Uh they all work on a 3% buffer.
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Well, most of them will have a 3% buffer.
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So depending on the rate that you're on, if you're getting 6.2%, they're working on it 9.2% that you can make the repayments back.
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Plus, they're working on living expenses, they'll all have different factors of how they factor in your living expenses.
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Um So they're not all going to take that piece of paper that I provide to them as gospel.
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Some of them are not.
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No, generally they'll go, all right, well, we think your what you've said isn't actually accurate.
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We're going to go off a higher figure.
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Okay.
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Um, or if your figure comes in higher than their figure, they'll take your figure.
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Yep.
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Um there's other obviously your expenses if you've got a car loan, all of these things, all your expenses, your afterpay, your credit cards, they all factor into how much you can borrow.
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Um what everyday expense hurts borrowing capacity more than people understand?
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Um there is things that they look at outside of your living expenses.
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So private health insurance is looked at outside your living expenses, private school fees are outside your living expenses.
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Um they sort of look at those as debts.
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Wow.
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Yeah, it's a little bit um well, it's probably my opinion, it's a bit unfair sometimes.
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But I agree with that because those are things that, you know, it's potentially um something that you're paying for for the betterment of your life or of your children's lives.
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It's not, you know, your afterpay or your TIV account.
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Yeah, where pro public school fees are factored inside your living expenses where private's outside.
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Um and your car insurance is inside versus health insurance outside.
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But there are some.
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It's one of your things in your industry that kind of doesn't make sense.
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Doesn't, but then there's reasons people above my pay grade that are making these decisions and it's we just play by the rules.
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Yep.
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Yep, absolutely.
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Um we have gone into afterpay already, but um credit cards, car loan, and hex, does that all affect your borrowing capacity?
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Are they all in the same bucket?
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Are they all credit card afterpay, car loan, hex, or unsecured debt?
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Minimise as much as you can?
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Yeah, if you can.
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Obviously, some of those things are out of your control if you've got a hex debt and it's$40,000.
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It's not that easy to get rid of.
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But yeah, all of those things are definitely going to negatively affect how much you can borrow.
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Segway question, you might not want to answer this and you're allowed to say no.
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Would you recommend someone consolidate their hex into their home loan?
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Generally not.
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Yep.
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It's pretty rare that we would ever do it.
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We'll have done it in the past.
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Um Is it because the hex rate is just quite correct.
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Like you're getting a much better interest rate.
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Okay.
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Yeah.
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Which indexation is generally a lot less than what your interest rate is going to be on your home loan.
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But it does affect your borrowing capacity.
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So if it works out that from a lifestyle perspective, you're going to have more cash flow, maybe it is worth doing, but it's probably really analysing is this the right decision for us?
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Um, it's not something I would recommend.
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Yep.
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Awesome.
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Um can you explain serviceability in simple terms?
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Uh so serviceability is just as we I think we've sort of covered a little bit, is just your income versus your expenses.
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Um Does your deposit come into your serviceability or no?
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It does.
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I mean, there's I guess that just reduces your total purchase price because you've got your 80%, your 20%, or there's times where clients will come to us and they've got super strong incomes.
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They can borrow more, way more than what they want, but they don't have a deposit to be able to complete that purchase.
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I feel like I'm being attacked right now.
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You're like not all real estate agents, but Kirsten, yeah.
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Times have changed.
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You're doing all right now.
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I am.
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I've for a long time I was your least favourite client.
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Um this is a really this is something that a few people ask me.
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How are lenders treating applications now in comparison to one and two years ago?
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I guess this is probably mainly around the budget changes and how banks are jumping on, I guess, being proactive, not reactive about their borrowing, about their lending, excuse me.
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So banks will factor in, well, they used to and they still will for properties that can be negatively geared.
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Um, but within the last month they've all adjusted their serviceability rates to say you've now got to select is this property able to be negatively geared?
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So it does affect your borrowing capacity um with these budget changes.
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So it is making it harder for people to buy an investment property from a serviceability perspective.
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Umer occupiers has anything changed in the last two years have you found?
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Not really.
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Awesome.
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All the rules are pretty much the same.
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And yeah.
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Yep.
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Is anyone coming to the party a little bit more with the uh self-employed folk out there?
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Um they all over the last couple of years, that's probably one area that has changed a lot.
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Banks are starting to have a bit more of a simple self-employed policy.
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They've all got their own little quirks about it and which way they do it.
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But um yeah, there's more than just one option for self-employed, which everyone used to go to.
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Yep, absolutely.
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Um that one we've already covered.
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What can someone do over the next six months to improve their borrowing capacity?
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Um as we've sort of covered off with the if you can close after pays and credit cards, it just really just boosts your borrowing capacity depending on what the limit is.
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They work on the limit, not the actual balance owing.
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Um so that can That's a really important thing that I think people don't realise.
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If your credit card is$20,000 and you pay whatever you spend every month to zero, you're still$20,000 in the red as far as the bank is concerned, because you could book a holiday and max that out and not pay it.
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So your limit is so important.
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Borrow$20,000 off the bank.
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And a lot of the time the credit cards that have those high limits are high reward quantas cards you know, you're getting a lot of frequent flyer points, and they will not let you go under$10.
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Correct.
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Which is why you close all of your credit cards.
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That's the that's the safest way to go.
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Um, this one's just around deposit.
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What sort of is the very, very lowest deposit you could get a first-time buyer into a home if they came to see you today and they were borrowing let's say that they were borrowing eight hundred and fifty thousand dollars.
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So eight fifty is in Perth is where the government guarantee scheme is at.
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So up to eight hundred and fifty thousand you can buy for five percent deposit on that property.
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That's awesome.
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But you also need to cover the stamp duty and fees, which sometimes people forget about that.
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Yeah, they work on that five percent figure, not realizing that there's other fees and stuff that come along with it.
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Awesome.
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So save your 5%, work out your stamp duty and other fees, pop it in a bank account, call map.
00:14:41.279 --> 00:14:41.600
Yeah.
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Good.
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Because I'm very passionate about people jumping now and not talking about it for three years.
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Like, let's do it now.
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Let's you buy the$850,000 house that's not your dream house, but you can get into it now, and then in three years' time you can keep that as an investment property and you can move into the dream house.
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Yeah, if that's if that that's how it works or if it's going to affect you, at least you've built the equity over the next three years and you haven't been renting.
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100%.
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Um people that have got less than a 20% deposit that are not first home buyers, they're paying lender's mortgage insurance.
00:15:12.720 --> 00:15:14.399
Can you explain what lender's mortgage insurance is?
00:15:14.639 --> 00:15:22.960
So lender's mortgage insurance is uh essentially an insurance policy that the bank takes out uh against you, but you pay the premium.
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It benefits them.
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It does not benefit the only way it benefits you is it allows you to buy for less than tw with a less than 20% deposit.
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It doesn't actually if you default on your loan, it's protects the bank.
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It doesn't protect you.
00:15:35.519 --> 00:15:35.759
Yep.
00:15:36.480 --> 00:15:37.919
So save yourself a deposit.
00:15:38.000 --> 00:15:39.519
That's that's the if you can.
00:15:40.000 --> 00:15:41.919
And the deposit can be equity in another property as well.
00:15:42.000 --> 00:15:43.279
It doesn't have to be capital bank.
00:15:43.360 --> 00:15:44.320
That's something that's really important.
00:15:44.559 --> 00:15:44.720
Yes.
00:15:45.039 --> 00:15:47.440
People will say, I can't upgrade my house because I don't have a deposit.
00:15:47.600 --> 00:15:49.120
And I say, Oh, what's your mortgage here?
00:15:49.200 --> 00:15:50.799
And they go, Oh, it's 400,000.
00:15:51.600 --> 00:15:52.320
There's your deposit.
00:15:52.399 --> 00:15:53.679
You've got a massive amount of equity.
00:15:53.759 --> 00:16:06.080
Let's And it's nice now in Perth that over the last five or six years that everyone's now got a bit of equity if you have held property for the last few years, because for a long time property market here just sort of stagnated or if not went backwards.
00:16:06.159 --> 00:16:07.200
So Yeah, absolutely.
00:16:07.360 --> 00:16:16.399
I think that the amount of business I took myself out of by saying, keep this, use the equity, go into your new home, you'll thank me for it.
00:16:16.480 --> 00:16:18.240
And then people are like, Oh, I'm so glad you did that.
00:16:18.399 --> 00:16:23.519
Now I've got the rental property that doesn't cost me anything for my retirement and the new house.
00:16:23.759 --> 00:16:25.759
And the capital growth that you've got over the last couple of years is that it's a very important thing.
00:16:29.200 --> 00:16:32.960
What is the common misunderstanding that people have about guarantor loans?
00:16:33.200 --> 00:16:35.519
I had one the other day that you had to correct me on.
00:16:35.759 --> 00:16:42.960
Um there's I think the one thing with guarantor loans is just knowing whether that guarantors can be a guarantor.
00:16:43.120 --> 00:16:45.679
Whether it most banks really want it to be immediate family.
00:16:46.159 --> 00:16:53.759
They don't want friends to step up and say, I'll I'll put my house on the line for that person because it's just a legal nightmare.
00:16:54.159 --> 00:17:04.400
Which is wild because I think that when you've got, you know, a core group of people in your life that maybe aren't blood relatives that you would do it for and you know they would do it for you, the banks won't look at that.
00:17:04.480 --> 00:17:08.640
Whereas you've got an estranged aunt that doesn't talk to your mum anymore, she can do it.
00:17:08.960 --> 00:17:10.000
Yeah, I think.
00:17:10.319 --> 00:17:15.039
I think anyone should be able to do it if they sign a document saying they understand the r the the legalities of it.
00:17:15.440 --> 00:17:21.599
I think probably there's been enough issues over the years with yeah, the banks have just pulled back.
00:17:21.839 --> 00:17:27.359
Not many have ever really done it, and then the ones that do did do it previously have really wound it back.
00:17:27.440 --> 00:17:30.880
So what institutions are doing it now that will offer it for you?
00:17:31.359 --> 00:17:36.960
There's probably about seven or eight different lenders, if not more, um, that will accept a guarantor in some capacity.
00:17:37.039 --> 00:17:37.359
Yep.
00:17:37.519 --> 00:17:43.680
Um but yeah, there's probably three or four that we mainly use just because some banks do it well.
00:17:43.839 --> 00:17:48.720
Other banks will tell us while we do it, don't give them to us because we'll just make it your life hard.
00:17:48.960 --> 00:17:49.279
Yep.
00:17:49.440 --> 00:17:51.359
Um another benefit of having a broker.
00:17:51.519 --> 00:17:57.200
Um and the guarantor will negate the need for lenders' mortgage insurance because they are taking on the potential risk.
00:17:57.599 --> 00:17:58.240
Yes, correct.
00:17:58.400 --> 00:18:04.160
So that portion of your loan that should be above 80% is then secured by the guarantor's property.
00:18:04.240 --> 00:18:04.400
Yep.
00:18:04.640 --> 00:18:07.519
So they need to make sure that they've got enough equity in their place.
00:18:07.680 --> 00:18:12.400
Um and that's probably the one thing that guarantors sort of question is what am I actually getting myself into?
00:18:12.559 --> 00:18:13.599
How does this work?
00:18:13.920 --> 00:18:19.039
So essentially they are putting, well, they do put a mortgage on top of the guarantor's property.
00:18:19.519 --> 00:18:22.160
So they do have a hold over that property if anything does go wrong.
00:18:22.480 --> 00:18:22.720
Yeah.
00:18:22.799 --> 00:18:23.119
Yep.
00:18:23.279 --> 00:18:28.400
As someone that's used guarantor multiple times in their lives from their mother, I think it's excellent.
00:18:28.880 --> 00:18:33.519
Um, so you just touched on the first home buyer's grant at$8.50.
00:18:33.759 --> 00:18:34.160
Yes.
00:18:34.480 --> 00:18:43.759
There's the there's a second grant at the moment around uh so there's a state-based one, which I think you might be alluding to, and the federal one.
00:18:43.920 --> 00:18:46.960
So the state-based one is the first home buyers grant that's been around forever.
00:18:47.039 --> 00:18:53.279
They changed the goalposts on it a fair bit, moving the purchase price around and what you what benefits you can and can't get.
00:18:53.440 --> 00:19:05.039
But at the moment you can get a$10,000 grant for building um it's got to be a land and construction or major renovations or something that is brand new that's never been lived in.
00:19:05.200 --> 00:19:07.839
Up to$800,000, you will get a$10,000 grant.
00:19:08.000 --> 00:19:08.400
Yep.
00:19:08.640 --> 00:19:12.799
Um there is also stamp duty concessions involved with that one.
00:19:12.960 --> 00:19:14.319
That is the state-based one.
00:19:14.400 --> 00:19:23.680
The federal one is, as we spoke about, the 5% government guarantee, which is where you don't there is no grant involved, but it is a essentially it's a guarantee.
00:19:23.920 --> 00:19:24.000
Yep.
00:19:24.240 --> 00:19:25.200
So you're negating the lesson.
00:19:27.839 --> 00:19:28.000
Yep.
00:19:28.160 --> 00:19:31.839
But their rules are you've got to come up with 5%, you've got to pay the stamp duty and fees.
00:19:31.920 --> 00:19:32.160
Yep.
00:19:32.319 --> 00:19:33.920
And that avoids a mortgage insurance.
00:19:38.559 --> 00:19:41.359
Oh, this is one that's a bit contentious with you and I right now.
00:19:41.519 --> 00:19:45.920
What can cause a finance application to fall over after an offer is accepted?
00:19:46.160 --> 00:19:47.200
Well, if you're trying to do it.
00:19:47.440 --> 00:19:48.160
Changing jobs changing.
00:19:48.400 --> 00:19:50.079
Changing jobs mid-application.
00:19:50.799 --> 00:19:54.000
Uh that's one That's not a good idea.
00:19:54.319 --> 00:19:58.000
Um it can work, which we're hopefully it's not dead in the water yet.
00:19:58.319 --> 00:19:59.680
Because you're the best broker in all the land.
00:20:00.000 --> 00:20:01.920
We'll find out in the next couple of days.
00:20:02.240 --> 00:20:20.400
Um Yeah, I think it's if you haven't got a pre-approval, that can sort of potentially trigger a decline purely because if you don't actually know what you can borrow and you go out and buy something, that's that's probably potentially gonna get you a decline if you don't have a big enough deposit.
00:20:20.640 --> 00:20:23.839
Um What about buying a car during a transaction?
00:20:24.240 --> 00:20:26.720
Yeah, look, it's not a it's not a but it's not a definite.
00:20:27.279 --> 00:20:30.240
It's not definitely no, but it's yeah, it's definitely not recommended.
00:20:30.640 --> 00:20:32.559
This is your forum where you can tell people what to do.
00:20:32.720 --> 00:20:35.839
If I was you, I'd be like, don't get a car, don't change your jobs.
00:20:36.480 --> 00:20:42.400
I think with the way things are at the moment, is property prices are so expensive or they've gone up dramatically.
00:20:42.799 --> 00:20:43.200
100%.
00:20:44.000 --> 00:20:53.279
Clients at the moment that we're seeing aren't swamped with the income that they can afford to do all these things and buy a car and a house at the same time.
00:20:53.519 --> 00:20:57.359
Um, people seem to be really stretching themselves to be able to get into the market.
00:20:57.680 --> 00:21:01.519
So anything like that is obviously going to affect your ability to borrow.
00:21:01.839 --> 00:21:02.240
Yep.
00:21:03.039 --> 00:21:06.319
How do lenders assess investment loans differently to owner-occupied?
00:21:07.039 --> 00:21:12.240
Um investment loans, they do factor in, I think we discussed like the negative gearing component.
00:21:12.480 --> 00:21:20.960
Um they will factor in the rental income that you can generate from the new place so it can increase your borrowing capacity.
00:21:21.200 --> 00:21:23.440
Um Can I ask this a little sideway question?
00:21:23.839 --> 00:21:27.440
We are asked to provide a rental estimate for for investment properties.
00:21:27.599 --> 00:21:30.480
Does the bank take theirs as gospel or are they double checking those?
00:21:30.559 --> 00:21:40.960
Because I'm always very conservative and realistic on mine and I support it with evidence because there's a big chance I'll get the rental and I don't want to have property managers that are unhappy with me over pricing.
00:21:41.119 --> 00:21:50.079
But if you're getting a rental for if you're getting a f an application for your mate Bob and you create a rental appraisal saying it's going to get a thousand dollars a week, but it's actually probably sitting at eight hundred.
00:21:50.240 --> 00:21:51.200
Do they check on those?
00:21:51.599 --> 00:21:53.440
They don't check on them generally.
00:21:53.599 --> 00:21:56.079
Some banks will verify it against what the valuer says.
00:21:56.160 --> 00:21:59.200
So most generally we'll get a valuation done on the property that they buy.
00:21:59.359 --> 00:21:59.519
Yep.
00:21:59.599 --> 00:21:59.680
And
00:22:00.079 --> 00:22:03.839
They will do a valuation on the actual value of the property plus what the rent or return is.
00:22:04.000 --> 00:22:04.240
Okay.
00:22:04.480 --> 00:22:08.400
Sometimes they'll take the lower figure of either your figure or what the valuer says.
00:22:08.480 --> 00:22:08.640
Okay.
00:22:08.799 --> 00:22:13.440
A lot of the times they'll take the real estate agent's letter as gospel.
00:22:13.759 --> 00:22:14.480
Yeah, well, yeah.
00:22:14.559 --> 00:22:20.640
We we should be being honest in our applications because in our appraisals, excuse me, because um they are used for finance purposes.
00:22:20.960 --> 00:22:21.440
Yeah, definitely.
00:22:21.599 --> 00:22:22.799
Yeah, absolutely.
00:22:22.960 --> 00:22:27.920
Um will they use a hundred percent of the rental income for my application or will they take off the property manager's fees?
00:22:28.720 --> 00:22:31.200
But what if I'm going to manage it myself and I will get a hundred percent?
00:22:31.519 --> 00:22:33.920
Well, you've still got other things that can factor in.
00:22:34.000 --> 00:22:36.319
You may not have it rented for 52 weeks of the year.
00:22:36.559 --> 00:22:36.720
Okay.
00:22:37.039 --> 00:22:41.599
Um you may need to put a new air conditioner in, you may do maintenance on the property.
00:22:41.680 --> 00:22:45.519
Um does each lender have like a different percentage they'll shave?
00:22:45.920 --> 00:22:46.079
Correct.
00:22:46.160 --> 00:22:46.319
Okay.
00:22:46.480 --> 00:22:53.440
Some shade 10, some shade 20, some will factor in they'll shade it, plus they'll factor in investment expenses.
00:22:53.519 --> 00:22:55.279
Um, every bank's different.
00:22:55.519 --> 00:22:55.680
Okay.
00:22:55.759 --> 00:23:01.039
So that's why sometimes you'll be recommending a bank because they're going to shave the least amount off, which is going to mean the property's yeah.
00:23:01.519 --> 00:23:03.920
Which it then again changes how much your borrowing capacity is.
00:23:04.160 --> 00:23:04.480
Yeah.
00:23:04.799 --> 00:23:09.680
Are you seeing many investors apply for loans at the moment, or have they fallen out of your ES like mine have?
00:23:10.160 --> 00:23:11.759
Sort of dried up a little bit.
00:23:11.920 --> 00:23:16.160
Um people I think are just waiting to see how the dust settles after the budget.
00:23:16.240 --> 00:23:19.440
And is it what's going on with the property market?
00:23:19.519 --> 00:23:26.720
We've seen a lot over in Sydney and Melbourne that their markets are now going backwards, whether that's to do with interest rate rises, the budget, and everything.
00:23:26.799 --> 00:23:32.079
Um Perth seems to be ticking along nicely still, but I feel like it has slowed a little bit.
00:23:32.319 --> 00:23:34.880
I don't know if you've seen today, but I've been sent it twice.
00:23:34.960 --> 00:23:37.200
We're having a change of our R codes.
00:23:37.519 --> 00:23:38.480
I have heard.
00:23:38.799 --> 00:23:39.119
Yeah.
00:23:39.279 --> 00:23:53.440
So mid-2027 is the projected date for it to come into effect, should everything go well, which in my experience, you do not sell something based on a fact that it's going to happen, much like the South Lake Uber Lake revitalization, rezoning that didn't go through.
00:23:53.519 --> 00:23:53.759
Yeah.
00:23:53.839 --> 00:23:56.720
Um, but yeah, an R20 at 700 will be subdivisible.
00:23:56.799 --> 00:23:59.599
So I think that'll do great things for the city of Coburn.
00:24:00.079 --> 00:24:11.440
And it will also, as we were discussing um with a few of your staff, that it it can then bring if you buy an investment property, it brings a negative gearing back into it if you do subdivide because it is New title.
00:24:11.680 --> 00:24:15.680
New title, new property construction, they will factor in negative gearing in the capital gains.
00:24:24.480 --> 00:24:25.440
And enter the market.
00:24:25.680 --> 00:24:26.000
Yeah.
00:24:26.160 --> 00:24:28.880
So that's such a positive step, I think.
00:24:29.200 --> 00:24:31.680
Yeah, it's a positive step for property owners.
00:24:32.000 --> 00:24:37.359
It's a positive step for property buyers because there'll be more stock available, which will soften everything, I hope.
00:24:37.599 --> 00:24:37.759
Yeah.
00:24:38.000 --> 00:24:45.839
I think there'll be an initial excitement around it, and then there will be more stock available, which there's more stock available today than there was three months ago, six months ago.
00:24:46.000 --> 00:24:46.160
Yeah.
00:24:46.400 --> 00:24:49.839
So it's all just becoming a little bit less hectic.
00:24:50.160 --> 00:24:51.279
Yeah, which we need.
00:24:51.519 --> 00:24:52.079
I think so.
00:24:52.319 --> 00:24:52.640
100%.
00:24:52.960 --> 00:24:53.759
We need more people to be.
00:24:56.720 --> 00:24:57.359
Without a doubt.
00:24:57.440 --> 00:25:05.200
We need more people in their own homes, which will alleviate the rental market, which will mean people that are currently facing difficulty will be able to get into a home.
00:25:05.359 --> 00:25:05.519
Yeah.
00:25:05.759 --> 00:25:07.039
It's just a flow-on effect.
00:25:07.680 --> 00:25:11.119
Um we did touch on self-employed clients.
00:25:11.359 --> 00:25:14.480
Um, you're saying that there are banks now that are a little bit easier.
00:25:14.640 --> 00:25:19.279
Who would you recommend for a self-employed person looking to borrow a property?
00:25:19.440 --> 00:25:23.200
Or is it really again case by case, speak to you and you can put them in the right box?
00:25:23.519 --> 00:25:25.759
Uh it's very much a case-by-case still.
00:25:26.000 --> 00:25:30.319
You you still sort of just need to analyze the correct.
00:25:30.480 --> 00:25:30.640
Yeah.
00:25:30.799 --> 00:25:34.079
I think there was another question here, which this is the one.
00:25:34.240 --> 00:25:40.960
Um what happens where a taxable income doesn't actually reflect my real cash flow?
00:25:41.519 --> 00:25:42.319
You know the client.
00:25:42.640 --> 00:25:44.640
Yeah, so the there is options.
00:25:44.799 --> 00:25:45.119
Yep.
00:25:45.279 --> 00:25:54.160
You can, if your accountant's happy to write a letter to say, look, this client's going to have a loan of 800,000, these are the repayments, they can comfortably make those repayments.
00:25:54.319 --> 00:26:02.240
Um we can find lenders that essentially they're non-conforming lenders, they play by their, not pay by their own rules, but pay by different rules and the majors do.
00:26:02.400 --> 00:26:05.680
Um, there is ways around to say, well, we can get you a loan.
00:26:05.759 --> 00:26:06.640
Uh that's awesome.
00:26:06.799 --> 00:26:09.359
Because a lot of the times small businesses will run like that.
00:26:09.759 --> 00:26:12.240
Um, however, they've got a larger deposit.
00:26:12.559 --> 00:26:14.160
They are a lower risk person.
00:26:14.319 --> 00:26:16.960
The books don't match up to their actual financial situation.
00:26:17.119 --> 00:26:25.039
So if we can get them into a property by going to someone that's, yeah, not sort of one of the big four that will only do A, B, C, nothing else.
00:26:25.519 --> 00:26:31.039
Yeah, so the the rates are generally higher, but depending on the size of your deposit, your risk there could be a risk fee involved.
00:26:31.119 --> 00:26:43.680
But yeah, there is definitely options for all about jump into it now, reassess it in 12 to 24 months once you've had the loan, you've shown that you're a perfect payer, and then you can refinance to someone else.
00:26:43.920 --> 00:26:47.279
Once you get your business financials in place and everything, then you can go, all right.
00:26:47.359 --> 00:26:54.880
Well, this was only to this gets you into the house, and then 12 months down the track we go, all right, let's go again and get you back into a uh a better rate.
00:26:55.119 --> 00:26:55.359
Yep.
00:26:55.440 --> 00:26:55.599
Yeah.
00:26:55.839 --> 00:26:57.680
I'm gonna ask a question you don't want to answer.
00:26:57.839 --> 00:27:00.559
What do you right now feel like is your rock star rate?
00:27:00.880 --> 00:27:01.839
A rock star rate.
00:27:02.160 --> 00:27:05.119
Like when you get it for a client, you're like, I did this is this is sharp.
00:27:05.359 --> 00:27:09.839
I think well, I just got an approval for a 5.99% rate, which is Awesome.
00:27:10.079 --> 00:27:10.559
Pretty good.
00:27:10.799 --> 00:27:16.799
It's probably slightly better out there at the moment, but you've in those instances you've got to have 40, 50% equity across your properties.
00:27:16.960 --> 00:27:17.599
And yeah.
00:27:18.000 --> 00:27:18.880
5.99.
00:27:18.960 --> 00:27:21.440
If you're paying more than that, go see Matt.
00:27:22.400 --> 00:27:24.000
That could be your new lingo.
00:27:25.200 --> 00:27:28.480
Um, well, this one was how do I know if I'm paying too much interest?
00:27:28.640 --> 00:27:30.079
Go and speak to Matt pretty much.
00:27:30.160 --> 00:27:34.160
And if it's more than 5.99, no, I've I've I've shackled you to that rate now.
00:27:34.319 --> 00:27:36.799
Oh, I'm horrible, but such a salesperson.
00:27:37.680 --> 00:27:41.279
Um, are there any costs that I should consider before refinancing?
00:27:41.680 --> 00:27:47.200
Um, you just want to make sure that if you're gonna refinance, you're doing it for a financial benefit.
00:27:47.359 --> 00:27:57.359
Um, there is obviously changeover cost for moving from one bank to the other, so you don't want to jump for 0.05 or 0.1% discount because it's just gonna get absorbed by the thousand dollars worth of fees for the bigger.
00:27:57.599 --> 00:28:10.640
I think that is such an important thing that people forget when they're having like coffee chats with their friends, and someone says, I'm on 599, someone else says, Oh, I'm on six six point one, and it's like, well, it's not actually worth jumping for that.
00:28:10.799 --> 00:28:10.880
Yeah.
00:28:11.119 --> 00:28:17.279
Unless you've got two million dollars worth of debt and you think, all right, well, what each percentage point is worth a little bit more because I've got so much debt.
00:28:17.519 --> 00:28:17.839
Yeah.
00:28:18.000 --> 00:28:18.640
Yeah.
00:28:20.880 --> 00:28:24.240
What should people consider before they consolidate debt into their home loan?
00:28:24.319 --> 00:28:26.240
This is a big talking point about car loans.
00:28:26.480 --> 00:28:29.119
Do we do we consolidate them into our home loans anymore or no?
00:28:29.440 --> 00:28:30.640
Uh some people will.
00:28:31.039 --> 00:28:39.759
I would try and keep them on the same term if you've sort of been shafted by a ri uh a car yard and you're getting pa charging 15 to 20 percent on your car.
00:28:40.160 --> 00:28:42.160
But you've got to remember it is a depreciating asset.
00:28:42.240 --> 00:28:43.279
So you don't want to then push it.
00:28:43.519 --> 00:28:44.880
I don't want to hear that, but I know that's true.
00:28:45.119 --> 00:28:52.240
Yeah, well when you buy a car every two years, you should realise the that you don't want to put a depreciating asset over 30 years.
00:28:52.319 --> 00:28:52.480
Yes.
00:28:52.720 --> 00:28:55.920
Because you'll end up paying more interest even if you get a better interest rate on it.
00:28:56.079 --> 00:29:00.319
Going from a five or seven year term over to 30 years is just not a very good financial decision.
00:29:00.640 --> 00:29:01.920
I only did that once.
00:29:02.960 --> 00:29:06.640
But sometimes it can be the right decision or it can be a cash flow decision.
00:29:06.880 --> 00:29:09.599
You can be guy saying life is too hard at the moment.
00:29:09.839 --> 00:29:12.079
So let's let's put the car into the home loan.
00:29:12.160 --> 00:29:12.400
Yep.
00:29:12.559 --> 00:29:14.079
And it frees up cash flow.
00:29:14.240 --> 00:29:17.200
We may we might be dropping back to one income because of children.
00:29:18.160 --> 00:29:22.720
So it's not always about what is the best financial decision, it's what's the best decision for our family.
00:29:23.359 --> 00:29:41.119
That's such a great point because in that season of my life, it was a cash flow um management of expenditure issue where my chaotic life with little kids and an income that was very, very tumultuous in the early years of my career.
00:29:41.279 --> 00:29:44.319
Um, I think I had Hudson and Payton then.
00:29:45.039 --> 00:29:48.160
Sorry, all of the outgoings were just overwhelming for me.
00:29:48.480 --> 00:29:49.440
And that's why I did it.
00:29:49.680 --> 00:29:53.759
And you just get one simple repayment and it covers your car, covers your home loan.
00:29:54.000 --> 00:29:59.279
And as as you say, when in this commission-based industry, some months are good, some months are not so good.
00:29:59.680 --> 00:30:00.000
100%.
00:30:00.240 --> 00:30:11.039
And when we had the sharper months, or when we had a big outgoing that I hadn't factored into because I'm not great at factoring in all of this money in the bank account's not mine.
00:30:11.200 --> 00:30:15.759
The A2O is gonna put their hand up and say, I want all of this from you at the end of the quarter.
00:30:16.000 --> 00:30:17.839
So I would think I'm fine.
00:30:18.240 --> 00:30:22.960
The the activity statement was lodged, I was no longer fine, the car payment needed to come out.
00:30:23.279 --> 00:30:30.640
Um so yeah, I think that that's something that's really important to consider, which is And that's where it comes back to being a case-by-case scenario.
00:30:30.880 --> 00:30:39.119
And then once once life gets back on track, you go, All right, let's ramp up our repayments and know that we did put forty thousand dollars into our home loan that was a car.
00:30:39.200 --> 00:30:41.759
Let's try and pay that portion off quickly if we can.
00:30:42.240 --> 00:30:45.200
Interest-only loans, are they still a thing?
00:30:45.519 --> 00:30:46.720
Yeah, they're still a thing.
00:30:46.960 --> 00:30:50.400
Mm most a lot of investment properties will still be on interest only.
00:30:50.559 --> 00:30:50.880
Yeah.
00:30:51.039 --> 00:31:00.480
Um interest uh I always say people, and I'm again disclaimer, I am financially illiterate, but I always tell people pay your principal place of residence off as fast as you can.
00:31:00.640 --> 00:31:04.799
And that's why I have my investments on interest only, because I want to get my house to zero.
00:31:05.039 --> 00:31:05.279
Correct.
00:31:05.680 --> 00:31:07.119
Then I will chip away at the other loans.
00:31:07.200 --> 00:31:17.440
But once my house, as for as long as my house has a loan, every dollar and cent that I get extra puts into that account to get rid of that loan because it's it's not taxable debt.
00:31:17.759 --> 00:31:18.319
Yeah, exactly.
00:31:18.400 --> 00:31:19.680
Any tax-deductible debt.
00:31:19.839 --> 00:31:26.720
I mean, I'm not a financial advisor or a we are not financial advisors, we are expibrillate primary school students who just work in the same industry.
00:31:26.960 --> 00:31:34.000
Yeah, but I mean, any accountant will probably tell you that you want to pay off your owner-occupied debt, keep your investment debt high because you can claim it.
00:31:34.079 --> 00:31:34.319
Yeah.
00:31:34.480 --> 00:31:36.799
Um, but get your advice from your accountant.
00:31:39.359 --> 00:31:41.119
We've we've smashed a lot of these.
00:31:41.279 --> 00:31:43.200
Uh, how many lenders do you work with?
00:31:43.519 --> 00:31:51.200
Um I wouldn't know the exact number of how many we're accredited with, but it would be about 35 to 40 different lenders that we've got access to.
00:31:51.359 --> 00:31:55.519
Um My mum used to say, Matt Stammers, he works with 70 different banks.
00:31:55.680 --> 00:31:56.240
And I would go.
00:31:56.559 --> 00:31:57.200
That thanks a lot.
00:31:57.599 --> 00:31:58.160
70?
00:31:58.319 --> 00:31:58.480
Okay.
00:31:59.920 --> 00:32:00.559
Yeah, half that.
00:32:00.640 --> 00:32:05.920
But still, I mean, of that we probably consistently use about eight to nine quite regularly.
00:32:06.000 --> 00:32:06.079
Yeah.
00:32:06.240 --> 00:32:09.759
And then over the journey, we've probably used close to 20 of them or 25.
00:32:10.000 --> 00:32:10.400
Yep.
00:32:10.559 --> 00:32:11.920
Um, but yeah.
00:32:13.039 --> 00:32:14.400
We have touched on this.
00:32:14.480 --> 00:32:19.119
What what how do you decide which lender is best from from a client for a client?
00:32:19.359 --> 00:32:22.160
Um, it is really the holistic whole picture of it, isn't it?
00:32:22.240 --> 00:32:25.359
It's not just the interest rate, it's terms and conditions.
00:32:25.920 --> 00:32:27.359
There's interest rate, offset.
00:32:27.519 --> 00:32:30.799
Sometimes people just don't want to change from their general their day-to-day banking.
00:32:30.880 --> 00:32:40.480
And if you can set it up that it's close enough with rates and they've got good products and interest um offset accounts, clients sometimes are happy to pay a slightly higher rate if it means they don't need to move banks.
00:32:40.559 --> 00:32:44.000
And as you've seen over the years, changing banks isn't the smoothest of process.
00:32:44.240 --> 00:32:44.400
Yep.
00:32:44.720 --> 00:32:58.480
So I am I am probably the client that whatever you say goes, we have banked with you with BankQuest, Commonwealth Bank, Westpac, uh maybe not Westpac, NAB is Macquarie.
00:32:58.799 --> 00:32:59.200
Yes.
00:33:00.160 --> 00:33:07.119
But a lot of that is to do with policy, like the latest changes, one bank won't do what you want to do.
00:33:08.000 --> 00:33:13.359
Whenever you say XYZ won't do it, so we're going to have to move to this bank.
00:33:13.519 --> 00:33:23.200
I just get this love for the new bank that's trusting that I'll pay them, and then I'm a stand for them, and I'm like, I would never meet move away from so-and-so, because they gave me a loan when the other one wouldn't.
00:33:23.279 --> 00:33:26.079
And now the one that I'm with now won't give me money.
00:33:26.880 --> 00:33:30.559
Well, they'll give it to me in a way that doesn't work for me, which I find super, super interesting.
00:33:30.640 --> 00:33:36.960
My current financial institution will not lend me a construction and subdivision simultaneous loan.
00:33:37.359 --> 00:33:42.319
They won't do it the three on the one title, which is what you want to do.
00:33:42.720 --> 00:33:43.759
So I have to go somewhere else.
00:33:43.920 --> 00:33:53.279
And now I'm a very loyal multiple options we in that scenario, but obviously one bank's nab's come up as your front runner of the cheapest option.
00:33:53.599 --> 00:34:00.400
I will say that Macquarie Bank settled my last home loan with 100% of the purchase price because my buyer couldn't settle.
00:34:00.480 --> 00:34:01.920
So I still do think they're excellent.
00:34:02.000 --> 00:34:02.240
Yes.
00:34:02.480 --> 00:34:04.000
That will forever be something that I'm grateful for.
00:34:04.319 --> 00:34:09.280
Most brokers would find that Macquarie Bank are one of the better banks to deal with from a service perspective.
00:34:09.760 --> 00:34:13.519
And for me, the stress that that alleviated is invaluable.
00:34:13.679 --> 00:34:19.679
I didn't have to then go and charge my buyer penalty interest and she was heavily pregnant with her first child.
00:34:19.840 --> 00:34:22.400
I was able to say, You're you settle when you can settle.
00:34:22.480 --> 00:34:23.440
I'm able to settle.
00:34:23.679 --> 00:34:28.079
I'm not stressing myself out because all of my things had been cut off and the removalist was booked.
00:34:28.559 --> 00:34:33.760
And that, you know, yes, I had to borrow more money to settle it, but they were fine.
00:34:33.840 --> 00:34:36.800
They were, yep, let's I think they turned it around in two days or something.
00:34:37.119 --> 00:34:37.679
They're notorious.
00:34:38.079 --> 00:34:40.880
You got a late night text message of the day.
00:34:41.519 --> 00:34:45.920
They're notorious from their service levels that they pride themselves on having the best service in the industry.
00:34:46.239 --> 00:34:46.639
Awesome.
00:34:46.800 --> 00:34:46.960
Yeah.
00:34:47.199 --> 00:34:48.719
Um, this is a really good one.
00:34:48.880 --> 00:34:53.440
I'm a first-time buyer, I've got a very small deposit, but a very stable rental history.
00:34:53.599 --> 00:34:55.519
Does that get taken into consideration?
00:34:55.840 --> 00:34:58.400
Yeah, some banks will factor in rental history.
00:34:58.639 --> 00:34:58.960
Awesome.
00:34:59.039 --> 00:35:05.519
Um, your genuine um genuine savings, um, but the money still needs to come from somewhere.
00:35:05.760 --> 00:35:05.920
Yeah.
00:35:06.079 --> 00:35:12.639
So if you're getting it gifted, banks will say, All right, well, because of your rental history, we'll say, look, you've got you can manage your repayment.
00:35:12.800 --> 00:35:16.239
We'll tick that box as your genuine savings, but the money needs to come from somewhere.
00:35:16.320 --> 00:35:20.719
So the purchase still needs to have a 5% deposit plus the fees, um, but it can be done.
00:35:21.119 --> 00:35:25.280
It should be taken into consideration along with child support.
00:35:25.679 --> 00:35:29.760
Banks won't take child support into consideration until it's been consistently paid for 12 months.
00:35:30.079 --> 00:35:30.320
Six.
00:35:30.559 --> 00:35:31.039
Six months.
00:35:31.280 --> 00:35:38.239
Some may factor in in after three, but child support is one of the it's one area that doesn't always get paid.
00:35:38.400 --> 00:35:44.880
So they will put a lot of boots to jump through to make sure that you can get it or to factor it in as income.
00:35:44.960 --> 00:35:49.039
Um, but it is definitely something that you can use if you are receiving child support.
00:35:49.199 --> 00:35:59.599
You just in an ideal world, if it's getting paid through the child support agency and coming out of whoever's paying it's out of their income before they see it, it's the best way for it to be done.
00:35:59.840 --> 00:36:06.559
And that can be something that you elect to do as well as as a as a a co-parenting couple to do.
00:36:06.719 --> 00:36:09.360
You can just have it paid through the child support agency, can't you?
00:36:09.599 --> 00:36:11.840
It's not like a yes, I've never been through the process.
00:36:12.239 --> 00:36:14.079
I've dealt with a lot of people that have.
00:36:14.559 --> 00:36:17.679
I think it depends on how amicable everyone is in the relationship.
00:36:18.079 --> 00:36:21.119
Most people are amical, which is lovely, because that's how you should.
00:36:21.199 --> 00:36:23.440
Well, that's how it is best for everybody.
00:36:23.599 --> 00:36:24.719
Less stress.
00:36:25.119 --> 00:36:27.519
Um, this is a really good one.
00:36:27.679 --> 00:36:31.039
I want to upgrade my house, but I haven't sold my current home.
00:36:31.280 --> 00:36:32.719
What are the options?
00:36:33.280 --> 00:36:37.119
If you've got enough equity, bridging is coming back, baby.
00:36:37.360 --> 00:36:40.639
It is coming back because as we said, people have equity now.
00:36:40.800 --> 00:36:45.280
Where for a long time, for the first 10 years I was doing this job, no one really seemed to have any equity.
00:36:45.840 --> 00:36:53.199
Um, but yeah, if you've got enough equity and you can do bridging, it means you can buy the next one without later letting go of your other one.
00:36:53.760 --> 00:36:59.360
Which is the probably the biggest issue that's facing people these days, is no one wants to buy any uh no one wants to sell.
00:36:59.599 --> 00:37:00.639
Sell subject to sale.
00:37:01.039 --> 00:37:05.760
No one wants to sell subject to sale, no one wants to sell their place before they've got something else to move into.
00:37:06.320 --> 00:37:13.440
I'm finding a lot of people at the moment are just saying, look, we'll we'll get another hundred grand cash out and make our current house better because we can't find what we want.
00:37:13.519 --> 00:37:13.760
Yep.
00:37:13.920 --> 00:37:16.159
We don't want to sell without buying something.
00:37:16.480 --> 00:37:19.360
I fully support that if you're in a location that you love.
00:37:19.599 --> 00:37:23.199
If you're not in a location that you love, don't try and make that ugly shoe fit.
00:37:23.280 --> 00:37:23.440
Yeah.
00:37:23.679 --> 00:37:24.159
Move.
00:37:24.559 --> 00:37:34.079
But if you love your location, borrow more money and extend, renovate, go up, whatever it might be, because the cost to move is extortion.
00:37:35.039 --> 00:37:47.920
Um if an investor's wanting to buy another investment property, can they use the equity in their current property to buy a second property but a third property over their portfolio?
00:37:48.159 --> 00:37:48.800
Yeah, definitely.
00:37:49.039 --> 00:37:52.559
You can as long as you've always got enough equity, it all comes down to the overall picture.
00:37:52.639 --> 00:37:56.480
If you've if everything's under 80%, you're avoiding mortgage insurance.
00:37:56.559 --> 00:38:00.960
Um and if you've got two properties, you've got two properties there that worth of equity that you can use definitely.
00:38:01.519 --> 00:38:03.519
Under 80, keep on collecting them, like Pokemon.
00:38:04.639 --> 00:38:06.800
Um I have poor credit history.
00:38:06.960 --> 00:38:08.719
Is home ownership still possible?
00:38:09.039 --> 00:38:10.960
Yes, it's definitely still possible.
00:38:11.039 --> 00:38:18.480
Um, and a bit like I think one of the questions earlier, that it's more of a long game and saying, all right, well, we can get you into the into a house now.
00:38:18.639 --> 00:38:20.800
Your interest rate might be seven or eight percent.
00:38:20.960 --> 00:38:29.679
But in 12 months' time, 24 months time, if you can keep your um credit history clean, get your credit score up, we can move you into another, into a better rate.
00:38:30.000 --> 00:38:32.480
And you can check your own credit store incredibly easily, can't you?
00:38:32.800 --> 00:38:34.480
Yeah, there's multiple different avenues of checking that.
00:38:34.719 --> 00:38:35.280
And it's free as well.
00:38:35.519 --> 00:38:35.679
Yes.
00:38:35.920 --> 00:38:36.639
All right, beautiful.
00:38:36.800 --> 00:38:42.159
What's the best piece of advice that you can give your clients and you would give my clients?
00:38:43.280 --> 00:38:48.719
Um going in, if you're looking to buy a property, I would say just speak to a broker, get a pre-approval.
00:38:49.440 --> 00:38:50.079
Pre-approval.
00:38:50.320 --> 00:38:51.280
Get it in place, get it.
00:38:51.679 --> 00:38:55.920
When Kirsten says you don't need a pre-approval, just remember Matt says pre-approval.
00:38:56.239 --> 00:38:57.760
Well, depends on where you're at.
00:38:57.840 --> 00:39:03.920
If you're sitting at a home open, maybe just put the offer in and give a broker a call straight after and make sure that it's gonna go ahead.
00:39:04.079 --> 00:39:07.840
Um, but yeah, pre-approval just irons out any questions that the bank's gonna have.
00:39:07.920 --> 00:39:08.079
Yep.
00:39:08.239 --> 00:39:18.159
Um, if they've got questions, get it done before you actually put an offer on and then it gives you the confidence going to a home open that say, hey, I can afford this, I know I can, the bank's already told me I can.
00:39:18.480 --> 00:39:20.400
It's gonna be a smoother transaction.
00:39:20.639 --> 00:39:28.639
It gives the real estate agent confidence that, hey, this isn't gonna fall over, we're not gonna get a decline because you've sort of ironed out any issues that could possibly come up.
00:39:28.960 --> 00:39:31.199
I would recommend submitting your pre-approval with your offer.
00:39:31.360 --> 00:39:41.360
Give them the pre-approval, the real estate agent, because then you've taken literally taken a box off our workflow, which is check finance with finance broker, ensure the broker because some brokers won't tell us information as well.
00:39:41.599 --> 00:39:50.159
But if you're look, I'd be hesitant sometimes depending on or when you the negotiating process is still going on to just say how much they can go to.
00:39:50.320 --> 00:39:50.719
But yeah.
00:39:51.039 --> 00:39:52.719
Oh, I completely respect that.
00:39:52.800 --> 00:39:53.039
Yeah.
00:39:53.199 --> 00:39:56.079
You don't want to bamboozle your own client.
00:39:56.320 --> 00:39:57.280
Yeah, so.
00:39:58.559 --> 00:39:59.760
Most important question.
00:39:59.920 --> 00:40:04.000
How can all of my friends find you so that you can do their pre-approvals before they come to home opens?
00:40:04.400 --> 00:40:07.199
Um, well, I do have an office in Mount Pleasant.
00:40:07.440 --> 00:40:07.760
Right.
00:40:07.840 --> 00:40:09.440
Nice and close to the rowing pavilion.
00:40:09.679 --> 00:40:11.119
Nice and close to the rowing pavilion.
00:40:11.360 --> 00:40:12.880
Go for a coffee or a beer.
00:40:13.360 --> 00:40:17.280
And just give us a call or flick us an email, either way.
00:40:17.360 --> 00:40:18.639
It's the easiest possible way.
00:40:18.880 --> 00:40:19.280
Awesome.
00:40:19.440 --> 00:40:19.760
Thanks.
00:40:19.920 --> 00:40:21.039
Was that painless enough?
00:40:21.280 --> 00:40:23.039
Uh yeah, glad it's over.
00:00:00.320 --> 00:00:06.000
Hello everybody, it's Kirsten from the Semple Property Playgroup, and I'm here with one of my oldest friends.
00:00:06.400 --> 00:00:07.120
Playgroup.
00:00:07.280 --> 00:00:08.560
Did I say play group?
00:00:09.599 --> 00:00:10.720
Did you hear play group?
00:00:11.039 --> 00:00:15.679
I think I did, but I was too busy thinking what I was about to get out and get it out of the way.
00:00:16.239 --> 00:00:17.600
I can't believe I said it's playgroup.
00:00:17.679 --> 00:00:17.920
Get it.
00:00:32.320 --> 00:00:33.679
Definitely not playgroup.
00:00:33.840 --> 00:00:35.439
You have to leave that bit in.
00:00:35.759 --> 00:00:38.159
I'm here with one of my oldest friends, Matthew Stammers.
00:00:38.320 --> 00:00:41.520
Matthew and I went to Bibra Lake Primary School together in the 90s.
00:00:41.679 --> 00:00:44.560
I can still sing the song, but I don't know if he can.
00:00:44.799 --> 00:00:45.679
No, he cannot.
00:00:46.640 --> 00:00:48.960
And Matthew is a mortgage broker.
00:00:49.119 --> 00:00:50.719
Matthew is the mortgage broker.
00:00:50.880 --> 00:00:56.079
He has got me loans when I was in a situation that was not favourable.
00:00:56.240 --> 00:00:59.359
And I still didn't have to go with a third-tier lender.
00:01:00.079 --> 00:01:04.640
We had to move things around and make things work, but I am yet to have a decline.
00:01:04.799 --> 00:01:10.560
So Matthew is the best in the business as far as I'm concerned, and I've done a lot of lending over my very short life.
00:01:11.359 --> 00:01:15.920
Matt, for anyone who's listening that hasn't used a finance broker, what do you do?
00:01:16.719 --> 00:01:21.200
We find finance or get finance for people looking to buy their house.
00:01:21.519 --> 00:01:28.159
We have access to multiple different lenders, as you say, top-tier lenders, the big four, second-tier lenders.
00:01:28.319 --> 00:01:33.680
And yeah, essentially we just find the best rate and best product for clients and for their situation.
00:01:34.079 --> 00:01:37.439
So for someone that hasn't ever used a broker, who pays you?
00:01:37.760 --> 00:01:38.799
We get paid by the bank.
00:01:38.879 --> 00:01:41.200
So our service to you, the client, is free.
00:01:41.760 --> 00:01:43.599
So yeah, it's it's a win-win.
00:01:44.879 --> 00:01:54.879
And you've done a lot of loans for me over the time, owner-occupier, um, investment property, um, purchasing different ent in in different entities.
00:01:55.040 --> 00:01:56.239
What is your niche?
00:01:56.319 --> 00:02:00.239
What is your favorite type of lending or something that you can do in your sleep?
00:02:00.799 --> 00:02:06.879
I think I'd say most brokers would probably say the same thing, just a nice 80% deal for an owner-occupied purchase would be ideal.
00:02:08.639 --> 00:02:11.840
No, there's not many of those that, well, they're never just that simple.
00:02:12.080 --> 00:02:14.080
Um every deal seems to be different.
00:02:14.400 --> 00:02:19.680
Dealing with each bank is different, so it's just finding the right product and the right place for each person.
00:02:20.000 --> 00:02:24.719
And would you agree that the interest rate is not the be-all end-all indicator of who you're going to tell your client to go with?
00:02:24.960 --> 00:02:25.439
Oh, 100%.
00:02:26.000 --> 00:02:34.560
I feel like at the moment people are very rate conscious, especially with the RBA moving rates as frequently as I have over the years, that that people are just very conscious on rate.
00:02:34.879 --> 00:02:45.039
But there is definitely a lot of other aspects to a loan that that can if you set it up properly, it will be more beneficial to you just than worrying about what's the best rate that's out there.
00:02:45.280 --> 00:03:01.840
Yeah, I think that's such an important factor as why I would always recommend someone see a broker and not go to the bank direct, is that factor of the layperson will look at an interest rate and go, I'm on a sharp rate, you're on a not sharp rate, but not look at the whole picture as a as a complete package.
00:03:02.000 --> 00:03:02.159
Yeah.
00:03:02.479 --> 00:03:03.599
What are the other things involved?
00:03:03.759 --> 00:03:06.159
What is the flexibility or non-flex flexibility?
00:03:06.240 --> 00:03:14.080
Um, I've recently been with a bank that we're moving away from, and I won't name any names, but um, they capped the frequency I could make payments.
00:03:14.159 --> 00:03:15.680
So it was monthly, not weekly.
00:03:15.919 --> 00:03:20.639
They didn't allow a certain amount over the repayments to be paid in without a penalty.
00:03:20.719 --> 00:03:27.120
Um there was quite a few restrictions they had, whereas the bank that we're moving to doesn't have any of those restrictions.
00:03:27.439 --> 00:03:44.319
Yeah, and that's the thing, and that's where a mortgage broker really comes into their own and and gives you that advice and says, hey, we can go with this bank because they're the rates of the cheapest, but you're going to be hand hamstrung this way or um yeah, where it's just finding the right product for that client in whatever situation you're in.
00:03:44.639 --> 00:03:53.759
And I think something that I tell people and they are always shocked by, but I probably can't explain why, everyone should be paying their mortgage weekly where possible, shouldn't they?
00:03:54.400 --> 00:03:55.759
Yes, but not always.
00:03:56.080 --> 00:04:02.319
If you've got an offset account, put it as one as soon as you get paid, if you get paid into that offset account, it's like it's beat sitting on the home loan anyway.
00:04:02.479 --> 00:04:05.680
So whether you pay weekly, fortnightly, or monthly, it doesn't matter.
00:04:05.840 --> 00:04:08.800
The main thing that you can do is pay extra into your home loan.
00:04:08.960 --> 00:04:10.240
That's the best thing that you can do.
00:04:10.479 --> 00:04:10.800
Okay.
00:04:11.120 --> 00:04:14.319
So get rid of after pay and put that money into your home loan.
00:04:14.639 --> 00:04:14.960
100%.
00:04:15.360 --> 00:04:19.600
Half-to-pay, credit cards, and and the works of some of the biggest bugbears in our industry.
00:04:19.680 --> 00:04:20.079
Yep.
00:04:20.240 --> 00:04:23.279
Um, and a lot of the time people don't realise they have some of them.
00:04:23.360 --> 00:04:30.720
If you've gone to Harvey Norman and bought a couch five years ago, what you don't realise is they've possibly set you up with a credit card as opposed to a loan.
00:04:30.879 --> 00:04:33.759
So once you've finished paying it off, that credit card is still active.
00:04:34.000 --> 00:04:34.240
Yep.
00:04:34.399 --> 00:04:44.720
Uh I that is something that never fails to amaze me when I get sent a credit card that I didn't request, that it's part of the fine print that I accept the terms and conditions of this agreement.
00:04:44.879 --> 00:04:47.279
And I'm someone that doesn't have a credit card.
00:04:47.360 --> 00:04:51.360
I don't run well with money that's not my own to spend, but I'm very self-aware.
00:04:51.519 --> 00:04:57.040
Um, so having a credit card is not something that I want, need, or aspire to have.
00:04:57.120 --> 00:04:59.519
So when I get sent one, I get a little bit pissed off.
00:04:59.839 --> 00:05:00.959
Don't give me money.
00:05:01.199 --> 00:05:16.319
Um, I have got a stack of questions just from people in Semple and also totally transparent, a lot of my friends who they either own their home or they are looking to buy their first home or they are thinking about buying an investment property.
00:05:16.560 --> 00:05:22.959
So it's really the market that probably you and I deal with most, um, which is residential real estate.
00:05:23.120 --> 00:05:26.959
Um, this one is I think you could probably have five answers too.
00:05:27.040 --> 00:05:30.319
But what is the biggest mistake a buyer makes before applying for their finance with you?
00:05:30.480 --> 00:05:35.439
What's the one thing they can do that's absolutely going to make you scream into your morning coffee?
00:05:35.759 --> 00:05:38.879
Um, I think it's just unsecured debt.
00:05:39.199 --> 00:05:46.959
When people have personal debt because they spend too much money, um, after pay, things like that affect your borrowing capacity.
00:05:47.120 --> 00:05:47.360
Yep.
00:05:47.600 --> 00:05:56.879
Um, before they see you as much as they can consolidate unsecured loans, personal loans, after pays, credit cards.
00:05:57.040 --> 00:06:02.000
Is there anything else they should be tidying up as much as they can without stressing their cash flow out?
00:06:02.319 --> 00:06:10.480
If you are pushing yourself to the limit with your borrowing capacity, does cleaning up your what you're spending your money on, they do look at your bank statements for the last six three to six months.
00:06:10.720 --> 00:06:12.560
So that can play into it.
00:06:12.639 --> 00:06:14.480
Aaron Powell That's such a good thing to consider.
00:06:14.720 --> 00:06:21.360
So look at your bank statement for the last three months and get rid of any direct debits that are unnecessary as an outgoing, because that'll be considered.
00:06:21.680 --> 00:06:24.079
Either direct debits or even just your everyday spending.
00:06:24.160 --> 00:06:28.480
If there's a lot of gambling on there, banks banks will accept a little bit of gambling.
00:06:28.560 --> 00:06:34.000
But if you are gambling heavily every Saturday at the races, it shows up and banks don't seem to like things like that.
00:06:34.399 --> 00:06:50.399
That is such an interesting thing that I probably wouldn't have recommended to people, but it is in the world that we live in where you just double click to update your your tab account, T A B, T A B, T A B, T A B, it's probably the regular transactions that banks would worry about.
00:06:50.639 --> 00:06:51.680
And it's a pattern.
00:06:52.079 --> 00:07:01.360
Sorry, it just gives banks an a a reason to be like, well, if we're on the line borderline with this dis this application and we're not sure whether we want to approve it or decline it, they can see those sort of transactions.
00:07:01.439 --> 00:07:11.120
They just sort of question what's this person's sort of ability like or where they're where they're sort of spending their time or spending their money.
00:07:11.519 --> 00:07:12.560
I love that advice.
00:07:12.720 --> 00:07:17.040
Let's start looking at our transactions once a day and seeing what is the reoccurring and cut it out.
00:07:17.199 --> 00:07:18.319
Mine's Uber.
00:07:18.560 --> 00:07:32.079
Um can you really simply explain how does a bank actually calculate what you can borrow, your c borrowing capacity in a really simple Essentially it's your income versus your expenses.
00:07:32.240 --> 00:07:33.519
That's how they first start off.
00:07:33.680 --> 00:07:41.839
So if you've got your income, say 100 grand, they'll work on and then your your children, how many kids you've got, and then your expenses.
00:07:41.920 --> 00:07:44.879
So they'll work out a figure for your living expenses.
00:07:45.040 --> 00:07:57.920
Um and uh work out your expenses, and then from there they'll work out what's your net figure that you've got left to sp to spend on a mortgage.
00:07:58.240 --> 00:07:58.480
Okay.
00:07:58.560 --> 00:07:58.720
Yeah.
00:07:58.800 --> 00:08:05.040
So taking into your income, get rid of your expenditure, and then that figure is what you can afford on a repayment over a loan.
00:08:05.199 --> 00:08:05.600
Yeah, correct.
00:08:05.839 --> 00:08:07.680
And a loan a loan's 40 years now?
00:08:07.920 --> 00:08:11.839
Uh you can get up to 40 years, but they're only under very circum circumstances.
00:08:12.160 --> 00:08:12.879
Normal is at 30 years.
00:08:13.120 --> 00:08:13.519
30 years.
00:08:13.680 --> 00:08:13.759
Yes.
00:08:14.079 --> 00:08:14.480
30 years.
00:08:14.639 --> 00:08:15.120
Yeah.
00:08:15.759 --> 00:08:19.279
Why does the borrowing capacity vary so much from lender to lender?
00:08:19.680 --> 00:08:21.839
Uh they all work on a 3% buffer.
00:08:21.920 --> 00:08:23.680
Well, most of them will have a 3% buffer.
00:08:23.759 --> 00:08:30.079
So depending on the rate that you're on, if you're getting 6.2%, they're working on it 9.2% that you can make the repayments back.
00:08:30.240 --> 00:08:35.440
Plus, they're working on living expenses, they'll all have different factors of how they factor in your living expenses.
00:08:36.159 --> 00:08:40.159
Um So they're not all going to take that piece of paper that I provide to them as gospel.
00:08:40.240 --> 00:08:40.639
Some of them are not.
00:08:41.120 --> 00:08:44.879
No, generally they'll go, all right, well, we think your what you've said isn't actually accurate.
00:08:45.039 --> 00:08:46.480
We're going to go off a higher figure.
00:08:46.559 --> 00:08:46.639
Okay.
00:08:46.879 --> 00:08:49.919
Um, or if your figure comes in higher than their figure, they'll take your figure.
00:08:50.159 --> 00:08:50.399
Yep.
00:08:50.559 --> 00:08:59.679
Um there's other obviously your expenses if you've got a car loan, all of these things, all your expenses, your afterpay, your credit cards, they all factor into how much you can borrow.
00:09:01.519 --> 00:09:07.679
Um what everyday expense hurts borrowing capacity more than people understand?
00:09:08.080 --> 00:09:11.840
Um there is things that they look at outside of your living expenses.
00:09:12.000 --> 00:09:17.840
So private health insurance is looked at outside your living expenses, private school fees are outside your living expenses.
00:09:18.240 --> 00:09:20.480
Um they sort of look at those as debts.
00:09:20.879 --> 00:09:21.440
Wow.
00:09:21.919 --> 00:09:25.759
Yeah, it's a little bit um well, it's probably my opinion, it's a bit unfair sometimes.
00:09:25.840 --> 00:09:35.360
But I agree with that because those are things that, you know, it's potentially um something that you're paying for for the betterment of your life or of your children's lives.
00:09:35.440 --> 00:09:38.240
It's not, you know, your afterpay or your TIV account.
00:09:38.639 --> 00:09:43.120
Yeah, where pro public school fees are factored inside your living expenses where private's outside.
00:09:43.840 --> 00:09:47.279
Um and your car insurance is inside versus health insurance outside.
00:09:47.360 --> 00:09:47.840
But there are some.
00:09:48.399 --> 00:09:50.799
It's one of your things in your industry that kind of doesn't make sense.
00:09:51.200 --> 00:09:56.799
Doesn't, but then there's reasons people above my pay grade that are making these decisions and it's we just play by the rules.
00:09:57.039 --> 00:09:57.279
Yep.
00:09:57.360 --> 00:09:58.720
Yep, absolutely.
00:09:59.039 --> 00:10:06.960
Um we have gone into afterpay already, but um credit cards, car loan, and hex, does that all affect your borrowing capacity?
00:10:07.440 --> 00:10:08.720
Are they all in the same bucket?
00:10:08.799 --> 00:10:12.080
Are they all credit card afterpay, car loan, hex, or unsecured debt?
00:10:12.240 --> 00:10:13.519
Minimise as much as you can?
00:10:13.840 --> 00:10:14.639
Yeah, if you can.
00:10:14.720 --> 00:10:18.399
Obviously, some of those things are out of your control if you've got a hex debt and it's$40,000.
00:10:18.559 --> 00:10:19.840
It's not that easy to get rid of.
00:10:19.919 --> 00:10:23.840
But yeah, all of those things are definitely going to negatively affect how much you can borrow.
00:10:24.320 --> 00:10:27.759
Segway question, you might not want to answer this and you're allowed to say no.
00:10:28.080 --> 00:10:31.440
Would you recommend someone consolidate their hex into their home loan?
00:10:33.759 --> 00:10:34.720
Generally not.
00:10:34.879 --> 00:10:35.120
Yep.
00:10:35.360 --> 00:10:37.039
It's pretty rare that we would ever do it.
00:10:37.200 --> 00:10:38.879
We'll have done it in the past.
00:10:39.279 --> 00:10:43.039
Um Is it because the hex rate is just quite correct.
00:10:43.120 --> 00:10:46.000
Like you're getting a much better interest rate.
00:10:46.240 --> 00:10:46.399
Okay.
00:10:47.679 --> 00:10:47.840
Yeah.
00:10:48.240 --> 00:10:52.320
Which indexation is generally a lot less than what your interest rate is going to be on your home loan.
00:10:52.799 --> 00:10:54.720
But it does affect your borrowing capacity.
00:10:54.879 --> 00:11:05.759
So if it works out that from a lifestyle perspective, you're going to have more cash flow, maybe it is worth doing, but it's probably really analysing is this the right decision for us?
00:11:05.919 --> 00:11:08.240
Um, it's not something I would recommend.
00:11:08.559 --> 00:11:08.879
Yep.
00:11:09.279 --> 00:11:10.080
Awesome.
00:11:10.399 --> 00:11:14.720
Um can you explain serviceability in simple terms?
00:11:15.279 --> 00:11:21.039
Uh so serviceability is just as we I think we've sort of covered a little bit, is just your income versus your expenses.
00:11:21.200 --> 00:11:24.080
Um Does your deposit come into your serviceability or no?
00:11:24.320 --> 00:11:25.919
It does.
00:11:26.240 --> 00:11:34.159
I mean, there's I guess that just reduces your total purchase price because you've got your 80%, your 20%, or there's times where clients will come to us and they've got super strong incomes.
00:11:34.320 --> 00:11:38.879
They can borrow more, way more than what they want, but they don't have a deposit to be able to complete that purchase.
00:11:39.200 --> 00:11:41.039
I feel like I'm being attacked right now.
00:11:43.360 --> 00:11:46.000
You're like not all real estate agents, but Kirsten, yeah.
00:11:46.879 --> 00:11:47.360
Times have changed.
00:11:47.440 --> 00:11:48.240
You're doing all right now.
00:11:48.480 --> 00:11:48.799
I am.
00:11:48.879 --> 00:11:51.519
I've for a long time I was your least favourite client.
00:11:51.759 --> 00:11:54.960
Um this is a really this is something that a few people ask me.
00:11:55.039 --> 00:11:59.919
How are lenders treating applications now in comparison to one and two years ago?
00:12:00.159 --> 00:12:10.559
I guess this is probably mainly around the budget changes and how banks are jumping on, I guess, being proactive, not reactive about their borrowing, about their lending, excuse me.
00:12:10.799 --> 00:12:16.159
So banks will factor in, well, they used to and they still will for properties that can be negatively geared.
00:12:16.559 --> 00:12:24.720
Um, but within the last month they've all adjusted their serviceability rates to say you've now got to select is this property able to be negatively geared?
00:12:24.799 --> 00:12:28.960
So it does affect your borrowing capacity um with these budget changes.
00:12:29.039 --> 00:12:33.440
So it is making it harder for people to buy an investment property from a serviceability perspective.
00:12:33.759 --> 00:12:37.279
Umer occupiers has anything changed in the last two years have you found?
00:12:37.600 --> 00:12:38.000
Not really.
00:12:38.399 --> 00:12:38.639
Awesome.
00:12:38.960 --> 00:12:40.240
All the rules are pretty much the same.
00:12:40.320 --> 00:12:40.879
And yeah.
00:12:41.200 --> 00:12:41.360
Yep.
00:12:41.519 --> 00:12:46.399
Is anyone coming to the party a little bit more with the uh self-employed folk out there?
00:12:46.879 --> 00:12:51.279
Um they all over the last couple of years, that's probably one area that has changed a lot.
00:12:51.440 --> 00:12:55.279
Banks are starting to have a bit more of a simple self-employed policy.
00:12:55.360 --> 00:12:58.639
They've all got their own little quirks about it and which way they do it.
00:12:58.799 --> 00:13:04.799
But um yeah, there's more than just one option for self-employed, which everyone used to go to.
00:13:05.120 --> 00:13:06.399
Yep, absolutely.
00:13:06.639 --> 00:13:12.720
Um that one we've already covered.
00:13:13.679 --> 00:13:17.759
What can someone do over the next six months to improve their borrowing capacity?
00:13:18.480 --> 00:13:26.559
Um as we've sort of covered off with the if you can close after pays and credit cards, it just really just boosts your borrowing capacity depending on what the limit is.
00:13:26.639 --> 00:13:29.360
They work on the limit, not the actual balance owing.
00:13:29.519 --> 00:13:32.799
Um so that can That's a really important thing that I think people don't realise.
00:13:33.039 --> 00:13:43.279
If your credit card is$20,000 and you pay whatever you spend every month to zero, you're still$20,000 in the red as far as the bank is concerned, because you could book a holiday and max that out and not pay it.
00:13:43.360 --> 00:13:45.039
So your limit is so important.
00:13:45.600 --> 00:13:47.120
Borrow$20,000 off the bank.
00:13:47.519 --> 00:13:56.159
And a lot of the time the credit cards that have those high limits are high reward quantas cards you know, you're getting a lot of frequent flyer points, and they will not let you go under$10.
00:13:56.559 --> 00:13:56.879
Correct.
00:13:57.120 --> 00:13:58.799
Which is why you close all of your credit cards.
00:13:58.960 --> 00:14:00.960
That's the that's the safest way to go.
00:14:01.279 --> 00:14:03.360
Um, this one's just around deposit.
00:14:03.519 --> 00:14:15.519
What sort of is the very, very lowest deposit you could get a first-time buyer into a home if they came to see you today and they were borrowing let's say that they were borrowing eight hundred and fifty thousand dollars.
00:14:15.919 --> 00:14:20.080
So eight fifty is in Perth is where the government guarantee scheme is at.
00:14:20.320 --> 00:14:24.480
So up to eight hundred and fifty thousand you can buy for five percent deposit on that property.
00:14:24.720 --> 00:14:25.279
That's awesome.
00:14:25.519 --> 00:14:29.360
But you also need to cover the stamp duty and fees, which sometimes people forget about that.
00:14:29.440 --> 00:14:34.960
Yeah, they work on that five percent figure, not realizing that there's other fees and stuff that come along with it.
00:14:35.279 --> 00:14:35.519
Awesome.
00:14:35.600 --> 00:14:40.960
So save your 5%, work out your stamp duty and other fees, pop it in a bank account, call map.
00:14:41.279 --> 00:14:41.600
Yeah.
00:14:41.840 --> 00:14:42.080
Good.
00:14:42.240 --> 00:14:47.279
Because I'm very passionate about people jumping now and not talking about it for three years.
00:14:47.360 --> 00:14:48.320
Like, let's do it now.
00:14:48.480 --> 00:14:56.960
Let's you buy the$850,000 house that's not your dream house, but you can get into it now, and then in three years' time you can keep that as an investment property and you can move into the dream house.
00:14:57.279 --> 00:15:03.519
Yeah, if that's if that that's how it works or if it's going to affect you, at least you've built the equity over the next three years and you haven't been renting.
00:15:03.919 --> 00:15:04.240
100%.
00:15:05.679 --> 00:15:12.639
Um people that have got less than a 20% deposit that are not first home buyers, they're paying lender's mortgage insurance.
00:15:12.720 --> 00:15:14.399
Can you explain what lender's mortgage insurance is?
00:15:14.639 --> 00:15:22.960
So lender's mortgage insurance is uh essentially an insurance policy that the bank takes out uh against you, but you pay the premium.
00:15:23.360 --> 00:15:24.080
It benefits them.
00:15:24.159 --> 00:15:29.360
It does not benefit the only way it benefits you is it allows you to buy for less than tw with a less than 20% deposit.
00:15:29.840 --> 00:15:34.320
It doesn't actually if you default on your loan, it's protects the bank.
00:15:34.480 --> 00:15:35.279
It doesn't protect you.
00:15:35.519 --> 00:15:35.759
Yep.
00:15:36.480 --> 00:15:37.919
So save yourself a deposit.
00:15:38.000 --> 00:15:39.519
That's that's the if you can.
00:15:40.000 --> 00:15:41.919
And the deposit can be equity in another property as well.
00:15:42.000 --> 00:15:43.279
It doesn't have to be capital bank.
00:15:43.360 --> 00:15:44.320
That's something that's really important.
00:15:44.559 --> 00:15:44.720
Yes.
00:15:45.039 --> 00:15:47.440
People will say, I can't upgrade my house because I don't have a deposit.
00:15:47.600 --> 00:15:49.120
And I say, Oh, what's your mortgage here?
00:15:49.200 --> 00:15:50.799
And they go, Oh, it's 400,000.
00:15:51.600 --> 00:15:52.320
There's your deposit.
00:15:52.399 --> 00:15:53.679
You've got a massive amount of equity.
00:15:53.759 --> 00:16:06.080
Let's And it's nice now in Perth that over the last five or six years that everyone's now got a bit of equity if you have held property for the last few years, because for a long time property market here just sort of stagnated or if not went backwards.
00:16:06.159 --> 00:16:07.200
So Yeah, absolutely.
00:16:07.360 --> 00:16:16.399
I think that the amount of business I took myself out of by saying, keep this, use the equity, go into your new home, you'll thank me for it.
00:16:16.480 --> 00:16:18.240
And then people are like, Oh, I'm so glad you did that.
00:16:18.399 --> 00:16:23.519
Now I've got the rental property that doesn't cost me anything for my retirement and the new house.
00:16:23.759 --> 00:16:25.759
And the capital growth that you've got over the last couple of years is that it's a very important thing.
00:16:29.200 --> 00:16:32.960
What is the common misunderstanding that people have about guarantor loans?
00:16:33.200 --> 00:16:35.519
I had one the other day that you had to correct me on.
00:16:35.759 --> 00:16:42.960
Um there's I think the one thing with guarantor loans is just knowing whether that guarantors can be a guarantor.
00:16:43.120 --> 00:16:45.679
Whether it most banks really want it to be immediate family.
00:16:46.159 --> 00:16:53.759
They don't want friends to step up and say, I'll I'll put my house on the line for that person because it's just a legal nightmare.
00:16:54.159 --> 00:17:04.400
Which is wild because I think that when you've got, you know, a core group of people in your life that maybe aren't blood relatives that you would do it for and you know they would do it for you, the banks won't look at that.
00:17:04.480 --> 00:17:08.640
Whereas you've got an estranged aunt that doesn't talk to your mum anymore, she can do it.
00:17:08.960 --> 00:17:10.000
Yeah, I think.
00:17:10.319 --> 00:17:15.039
I think anyone should be able to do it if they sign a document saying they understand the r the the legalities of it.
00:17:15.440 --> 00:17:21.599
I think probably there's been enough issues over the years with yeah, the banks have just pulled back.
00:17:21.839 --> 00:17:27.359
Not many have ever really done it, and then the ones that do did do it previously have really wound it back.
00:17:27.440 --> 00:17:30.880
So what institutions are doing it now that will offer it for you?
00:17:31.359 --> 00:17:36.960
There's probably about seven or eight different lenders, if not more, um, that will accept a guarantor in some capacity.
00:17:37.039 --> 00:17:37.359
Yep.
00:17:37.519 --> 00:17:43.680
Um but yeah, there's probably three or four that we mainly use just because some banks do it well.
00:17:43.839 --> 00:17:48.720
Other banks will tell us while we do it, don't give them to us because we'll just make it your life hard.
00:17:48.960 --> 00:17:49.279
Yep.
00:17:49.440 --> 00:17:51.359
Um another benefit of having a broker.
00:17:51.519 --> 00:17:57.200
Um and the guarantor will negate the need for lenders' mortgage insurance because they are taking on the potential risk.
00:17:57.599 --> 00:17:58.240
Yes, correct.
00:17:58.400 --> 00:18:04.160
So that portion of your loan that should be above 80% is then secured by the guarantor's property.
00:18:04.240 --> 00:18:04.400
Yep.
00:18:04.640 --> 00:18:07.519
So they need to make sure that they've got enough equity in their place.
00:18:07.680 --> 00:18:12.400
Um and that's probably the one thing that guarantors sort of question is what am I actually getting myself into?
00:18:12.559 --> 00:18:13.599
How does this work?
00:18:13.920 --> 00:18:19.039
So essentially they are putting, well, they do put a mortgage on top of the guarantor's property.
00:18:19.519 --> 00:18:22.160
So they do have a hold over that property if anything does go wrong.
00:18:22.480 --> 00:18:22.720
Yeah.
00:18:22.799 --> 00:18:23.119
Yep.
00:18:23.279 --> 00:18:28.400
As someone that's used guarantor multiple times in their lives from their mother, I think it's excellent.
00:18:28.880 --> 00:18:33.519
Um, so you just touched on the first home buyer's grant at$8.50.
00:18:33.759 --> 00:18:34.160
Yes.
00:18:34.480 --> 00:18:43.759
There's the there's a second grant at the moment around uh so there's a state-based one, which I think you might be alluding to, and the federal one.
00:18:43.920 --> 00:18:46.960
So the state-based one is the first home buyers grant that's been around forever.
00:18:47.039 --> 00:18:53.279
They changed the goalposts on it a fair bit, moving the purchase price around and what you what benefits you can and can't get.
00:18:53.440 --> 00:19:05.039
But at the moment you can get a$10,000 grant for building um it's got to be a land and construction or major renovations or something that is brand new that's never been lived in.
00:19:05.200 --> 00:19:07.839
Up to$800,000, you will get a$10,000 grant.
00:19:08.000 --> 00:19:08.400
Yep.
00:19:08.640 --> 00:19:12.799
Um there is also stamp duty concessions involved with that one.
00:19:12.960 --> 00:19:14.319
That is the state-based one.
00:19:14.400 --> 00:19:23.680
The federal one is, as we spoke about, the 5% government guarantee, which is where you don't there is no grant involved, but it is a essentially it's a guarantee.
00:19:23.920 --> 00:19:24.000
Yep.
00:19:24.240 --> 00:19:25.200
So you're negating the lesson.
00:19:27.839 --> 00:19:28.000
Yep.
00:19:28.160 --> 00:19:31.839
But their rules are you've got to come up with 5%, you've got to pay the stamp duty and fees.
00:19:31.920 --> 00:19:32.160
Yep.
00:19:32.319 --> 00:19:33.920
And that avoids a mortgage insurance.
00:19:38.559 --> 00:19:41.359
Oh, this is one that's a bit contentious with you and I right now.
00:19:41.519 --> 00:19:45.920
What can cause a finance application to fall over after an offer is accepted?
00:19:46.160 --> 00:19:47.200
Well, if you're trying to do it.
00:19:47.440 --> 00:19:48.160
Changing jobs changing.
00:19:48.400 --> 00:19:50.079
Changing jobs mid-application.
00:19:50.799 --> 00:19:54.000
Uh that's one That's not a good idea.
00:19:54.319 --> 00:19:58.000
Um it can work, which we're hopefully it's not dead in the water yet.
00:19:58.319 --> 00:19:59.680
Because you're the best broker in all the land.
00:20:00.000 --> 00:20:01.920
We'll find out in the next couple of days.
00:20:02.240 --> 00:20:20.400
Um Yeah, I think it's if you haven't got a pre-approval, that can sort of potentially trigger a decline purely because if you don't actually know what you can borrow and you go out and buy something, that's that's probably potentially gonna get you a decline if you don't have a big enough deposit.
00:20:20.640 --> 00:20:23.839
Um What about buying a car during a transaction?
00:20:24.240 --> 00:20:26.720
Yeah, look, it's not a it's not a but it's not a definite.
00:20:27.279 --> 00:20:30.240
It's not definitely no, but it's yeah, it's definitely not recommended.
00:20:30.640 --> 00:20:32.559
This is your forum where you can tell people what to do.
00:20:32.720 --> 00:20:35.839
If I was you, I'd be like, don't get a car, don't change your jobs.
00:20:36.480 --> 00:20:42.400
I think with the way things are at the moment, is property prices are so expensive or they've gone up dramatically.
00:20:42.799 --> 00:20:43.200
100%.
00:20:44.000 --> 00:20:53.279
Clients at the moment that we're seeing aren't swamped with the income that they can afford to do all these things and buy a car and a house at the same time.
00:20:53.519 --> 00:20:57.359
Um, people seem to be really stretching themselves to be able to get into the market.
00:20:57.680 --> 00:21:01.519
So anything like that is obviously going to affect your ability to borrow.
00:21:01.839 --> 00:21:02.240
Yep.
00:21:03.039 --> 00:21:06.319
How do lenders assess investment loans differently to owner-occupied?
00:21:07.039 --> 00:21:12.240
Um investment loans, they do factor in, I think we discussed like the negative gearing component.
00:21:12.480 --> 00:21:20.960
Um they will factor in the rental income that you can generate from the new place so it can increase your borrowing capacity.
00:21:21.200 --> 00:21:23.440
Um Can I ask this a little sideway question?
00:21:23.839 --> 00:21:27.440
We are asked to provide a rental estimate for for investment properties.
00:21:27.599 --> 00:21:30.480
Does the bank take theirs as gospel or are they double checking those?
00:21:30.559 --> 00:21:40.960
Because I'm always very conservative and realistic on mine and I support it with evidence because there's a big chance I'll get the rental and I don't want to have property managers that are unhappy with me over pricing.
00:21:41.119 --> 00:21:50.079
But if you're getting a rental for if you're getting a f an application for your mate Bob and you create a rental appraisal saying it's going to get a thousand dollars a week, but it's actually probably sitting at eight hundred.
00:21:50.240 --> 00:21:51.200
Do they check on those?
00:21:51.599 --> 00:21:53.440
They don't check on them generally.
00:21:53.599 --> 00:21:56.079
Some banks will verify it against what the valuer says.
00:21:56.160 --> 00:21:59.200
So most generally we'll get a valuation done on the property that they buy.
00:21:59.359 --> 00:21:59.519
Yep.
00:21:59.599 --> 00:21:59.680
And
00:22:00.079 --> 00:22:03.839
They will do a valuation on the actual value of the property plus what the rent or return is.
00:22:04.000 --> 00:22:04.240
Okay.
00:22:04.480 --> 00:22:08.400
Sometimes they'll take the lower figure of either your figure or what the valuer says.
00:22:08.480 --> 00:22:08.640
Okay.
00:22:08.799 --> 00:22:13.440
A lot of the times they'll take the real estate agent's letter as gospel.
00:22:13.759 --> 00:22:14.480
Yeah, well, yeah.
00:22:14.559 --> 00:22:20.640
We we should be being honest in our applications because in our appraisals, excuse me, because um they are used for finance purposes.
00:22:20.960 --> 00:22:21.440
Yeah, definitely.
00:22:21.599 --> 00:22:22.799
Yeah, absolutely.
00:22:22.960 --> 00:22:27.920
Um will they use a hundred percent of the rental income for my application or will they take off the property manager's fees?
00:22:28.720 --> 00:22:31.200
But what if I'm going to manage it myself and I will get a hundred percent?
00:22:31.519 --> 00:22:33.920
Well, you've still got other things that can factor in.
00:22:34.000 --> 00:22:36.319
You may not have it rented for 52 weeks of the year.
00:22:36.559 --> 00:22:36.720
Okay.
00:22:37.039 --> 00:22:41.599
Um you may need to put a new air conditioner in, you may do maintenance on the property.
00:22:41.680 --> 00:22:45.519
Um does each lender have like a different percentage they'll shave?
00:22:45.920 --> 00:22:46.079
Correct.
00:22:46.160 --> 00:22:46.319
Okay.
00:22:46.480 --> 00:22:53.440
Some shade 10, some shade 20, some will factor in they'll shade it, plus they'll factor in investment expenses.
00:22:53.519 --> 00:22:55.279
Um, every bank's different.
00:22:55.519 --> 00:22:55.680
Okay.
00:22:55.759 --> 00:23:01.039
So that's why sometimes you'll be recommending a bank because they're going to shave the least amount off, which is going to mean the property's yeah.
00:23:01.519 --> 00:23:03.920
Which it then again changes how much your borrowing capacity is.
00:23:04.160 --> 00:23:04.480
Yeah.
00:23:04.799 --> 00:23:09.680
Are you seeing many investors apply for loans at the moment, or have they fallen out of your ES like mine have?
00:23:10.160 --> 00:23:11.759
Sort of dried up a little bit.
00:23:11.920 --> 00:23:16.160
Um people I think are just waiting to see how the dust settles after the budget.
00:23:16.240 --> 00:23:19.440
And is it what's going on with the property market?
00:23:19.519 --> 00:23:26.720
We've seen a lot over in Sydney and Melbourne that their markets are now going backwards, whether that's to do with interest rate rises, the budget, and everything.
00:23:26.799 --> 00:23:32.079
Um Perth seems to be ticking along nicely still, but I feel like it has slowed a little bit.
00:23:32.319 --> 00:23:34.880
I don't know if you've seen today, but I've been sent it twice.
00:23:34.960 --> 00:23:37.200
We're having a change of our R codes.
00:23:37.519 --> 00:23:38.480
I have heard.
00:23:38.799 --> 00:23:39.119
Yeah.
00:23:39.279 --> 00:23:53.440
So mid-2027 is the projected date for it to come into effect, should everything go well, which in my experience, you do not sell something based on a fact that it's going to happen, much like the South Lake Uber Lake revitalization, rezoning that didn't go through.
00:23:53.519 --> 00:23:53.759
Yeah.
00:23:53.839 --> 00:23:56.720
Um, but yeah, an R20 at 700 will be subdivisible.
00:23:56.799 --> 00:23:59.599
So I think that'll do great things for the city of Coburn.
00:24:00.079 --> 00:24:11.440
And it will also, as we were discussing um with a few of your staff, that it it can then bring if you buy an investment property, it brings a negative gearing back into it if you do subdivide because it is New title.
00:24:11.680 --> 00:24:15.680
New title, new property construction, they will factor in negative gearing in the capital gains.
00:24:24.480 --> 00:24:25.440
And enter the market.
00:24:25.680 --> 00:24:26.000
Yeah.
00:24:26.160 --> 00:24:28.880
So that's such a positive step, I think.
00:24:29.200 --> 00:24:31.680
Yeah, it's a positive step for property owners.
00:24:32.000 --> 00:24:37.359
It's a positive step for property buyers because there'll be more stock available, which will soften everything, I hope.
00:24:37.599 --> 00:24:37.759
Yeah.
00:24:38.000 --> 00:24:45.839
I think there'll be an initial excitement around it, and then there will be more stock available, which there's more stock available today than there was three months ago, six months ago.
00:24:46.000 --> 00:24:46.160
Yeah.
00:24:46.400 --> 00:24:49.839
So it's all just becoming a little bit less hectic.
00:24:50.160 --> 00:24:51.279
Yeah, which we need.
00:24:51.519 --> 00:24:52.079
I think so.
00:24:52.319 --> 00:24:52.640
100%.
00:24:52.960 --> 00:24:53.759
We need more people to be.
00:24:56.720 --> 00:24:57.359
Without a doubt.
00:24:57.440 --> 00:25:05.200
We need more people in their own homes, which will alleviate the rental market, which will mean people that are currently facing difficulty will be able to get into a home.
00:25:05.359 --> 00:25:05.519
Yeah.
00:25:05.759 --> 00:25:07.039
It's just a flow-on effect.
00:25:07.680 --> 00:25:11.119
Um we did touch on self-employed clients.
00:25:11.359 --> 00:25:14.480
Um, you're saying that there are banks now that are a little bit easier.
00:25:14.640 --> 00:25:19.279
Who would you recommend for a self-employed person looking to borrow a property?
00:25:19.440 --> 00:25:23.200
Or is it really again case by case, speak to you and you can put them in the right box?
00:25:23.519 --> 00:25:25.759
Uh it's very much a case-by-case still.
00:25:26.000 --> 00:25:30.319
You you still sort of just need to analyze the correct.
00:25:30.480 --> 00:25:30.640
Yeah.
00:25:30.799 --> 00:25:34.079
I think there was another question here, which this is the one.
00:25:34.240 --> 00:25:40.960
Um what happens where a taxable income doesn't actually reflect my real cash flow?
00:25:41.519 --> 00:25:42.319
You know the client.
00:25:42.640 --> 00:25:44.640
Yeah, so the there is options.
00:25:44.799 --> 00:25:45.119
Yep.
00:25:45.279 --> 00:25:54.160
You can, if your accountant's happy to write a letter to say, look, this client's going to have a loan of 800,000, these are the repayments, they can comfortably make those repayments.
00:25:54.319 --> 00:26:02.240
Um we can find lenders that essentially they're non-conforming lenders, they play by their, not pay by their own rules, but pay by different rules and the majors do.
00:26:02.400 --> 00:26:05.680
Um, there is ways around to say, well, we can get you a loan.
00:26:05.759 --> 00:26:06.640
Uh that's awesome.
00:26:06.799 --> 00:26:09.359
Because a lot of the times small businesses will run like that.
00:26:09.759 --> 00:26:12.240
Um, however, they've got a larger deposit.
00:26:12.559 --> 00:26:14.160
They are a lower risk person.
00:26:14.319 --> 00:26:16.960
The books don't match up to their actual financial situation.
00:26:17.119 --> 00:26:25.039
So if we can get them into a property by going to someone that's, yeah, not sort of one of the big four that will only do A, B, C, nothing else.
00:26:25.519 --> 00:26:31.039
Yeah, so the the rates are generally higher, but depending on the size of your deposit, your risk there could be a risk fee involved.
00:26:31.119 --> 00:26:43.680
But yeah, there is definitely options for all about jump into it now, reassess it in 12 to 24 months once you've had the loan, you've shown that you're a perfect payer, and then you can refinance to someone else.
00:26:43.920 --> 00:26:47.279
Once you get your business financials in place and everything, then you can go, all right.
00:26:47.359 --> 00:26:54.880
Well, this was only to this gets you into the house, and then 12 months down the track we go, all right, let's go again and get you back into a uh a better rate.
00:26:55.119 --> 00:26:55.359
Yep.
00:26:55.440 --> 00:26:55.599
Yeah.
00:26:55.839 --> 00:26:57.680
I'm gonna ask a question you don't want to answer.
00:26:57.839 --> 00:27:00.559
What do you right now feel like is your rock star rate?
00:27:00.880 --> 00:27:01.839
A rock star rate.
00:27:02.160 --> 00:27:05.119
Like when you get it for a client, you're like, I did this is this is sharp.
00:27:05.359 --> 00:27:09.839
I think well, I just got an approval for a 5.99% rate, which is Awesome.
00:27:10.079 --> 00:27:10.559
Pretty good.
00:27:10.799 --> 00:27:16.799
It's probably slightly better out there at the moment, but you've in those instances you've got to have 40, 50% equity across your properties.
00:27:16.960 --> 00:27:17.599
And yeah.
00:27:18.000 --> 00:27:18.880
5.99.
00:27:18.960 --> 00:27:21.440
If you're paying more than that, go see Matt.
00:27:22.400 --> 00:27:24.000
That could be your new lingo.
00:27:25.200 --> 00:27:28.480
Um, well, this one was how do I know if I'm paying too much interest?
00:27:28.640 --> 00:27:30.079
Go and speak to Matt pretty much.
00:27:30.160 --> 00:27:34.160
And if it's more than 5.99, no, I've I've I've shackled you to that rate now.
00:27:34.319 --> 00:27:36.799
Oh, I'm horrible, but such a salesperson.
00:27:37.680 --> 00:27:41.279
Um, are there any costs that I should consider before refinancing?
00:27:41.680 --> 00:27:47.200
Um, you just want to make sure that if you're gonna refinance, you're doing it for a financial benefit.
00:27:47.359 --> 00:27:57.359
Um, there is obviously changeover cost for moving from one bank to the other, so you don't want to jump for 0.05 or 0.1% discount because it's just gonna get absorbed by the thousand dollars worth of fees for the bigger.
00:27:57.599 --> 00:28:10.640
I think that is such an important thing that people forget when they're having like coffee chats with their friends, and someone says, I'm on 599, someone else says, Oh, I'm on six six point one, and it's like, well, it's not actually worth jumping for that.
00:28:10.799 --> 00:28:10.880
Yeah.
00:28:11.119 --> 00:28:17.279
Unless you've got two million dollars worth of debt and you think, all right, well, what each percentage point is worth a little bit more because I've got so much debt.
00:28:17.519 --> 00:28:17.839
Yeah.
00:28:18.000 --> 00:28:18.640
Yeah.
00:28:20.880 --> 00:28:24.240
What should people consider before they consolidate debt into their home loan?
00:28:24.319 --> 00:28:26.240
This is a big talking point about car loans.
00:28:26.480 --> 00:28:29.119
Do we do we consolidate them into our home loans anymore or no?
00:28:29.440 --> 00:28:30.640
Uh some people will.
00:28:31.039 --> 00:28:39.759
I would try and keep them on the same term if you've sort of been shafted by a ri uh a car yard and you're getting pa charging 15 to 20 percent on your car.
00:28:40.160 --> 00:28:42.160
But you've got to remember it is a depreciating asset.
00:28:42.240 --> 00:28:43.279
So you don't want to then push it.
00:28:43.519 --> 00:28:44.880
I don't want to hear that, but I know that's true.
00:28:45.119 --> 00:28:52.240
Yeah, well when you buy a car every two years, you should realise the that you don't want to put a depreciating asset over 30 years.
00:28:52.319 --> 00:28:52.480
Yes.
00:28:52.720 --> 00:28:55.920
Because you'll end up paying more interest even if you get a better interest rate on it.
00:28:56.079 --> 00:29:00.319
Going from a five or seven year term over to 30 years is just not a very good financial decision.
00:29:00.640 --> 00:29:01.920
I only did that once.
00:29:02.960 --> 00:29:06.640
But sometimes it can be the right decision or it can be a cash flow decision.
00:29:06.880 --> 00:29:09.599
You can be guy saying life is too hard at the moment.
00:29:09.839 --> 00:29:12.079
So let's let's put the car into the home loan.
00:29:12.160 --> 00:29:12.400
Yep.
00:29:12.559 --> 00:29:14.079
And it frees up cash flow.
00:29:14.240 --> 00:29:17.200
We may we might be dropping back to one income because of children.
00:29:18.160 --> 00:29:22.720
So it's not always about what is the best financial decision, it's what's the best decision for our family.
00:29:23.359 --> 00:29:41.119
That's such a great point because in that season of my life, it was a cash flow um management of expenditure issue where my chaotic life with little kids and an income that was very, very tumultuous in the early years of my career.
00:29:41.279 --> 00:29:44.319
Um, I think I had Hudson and Payton then.
00:29:45.039 --> 00:29:48.160
Sorry, all of the outgoings were just overwhelming for me.
00:29:48.480 --> 00:29:49.440
And that's why I did it.
00:29:49.680 --> 00:29:53.759
And you just get one simple repayment and it covers your car, covers your home loan.
00:29:54.000 --> 00:29:59.279
And as as you say, when in this commission-based industry, some months are good, some months are not so good.
00:29:59.680 --> 00:30:00.000
100%.
00:30:00.240 --> 00:30:11.039
And when we had the sharper months, or when we had a big outgoing that I hadn't factored into because I'm not great at factoring in all of this money in the bank account's not mine.
00:30:11.200 --> 00:30:15.759
The A2O is gonna put their hand up and say, I want all of this from you at the end of the quarter.
00:30:16.000 --> 00:30:17.839
So I would think I'm fine.
00:30:18.240 --> 00:30:22.960
The the activity statement was lodged, I was no longer fine, the car payment needed to come out.
00:30:23.279 --> 00:30:30.640
Um so yeah, I think that that's something that's really important to consider, which is And that's where it comes back to being a case-by-case scenario.
00:30:30.880 --> 00:30:39.119
And then once once life gets back on track, you go, All right, let's ramp up our repayments and know that we did put forty thousand dollars into our home loan that was a car.
00:30:39.200 --> 00:30:41.759
Let's try and pay that portion off quickly if we can.
00:30:42.240 --> 00:30:45.200
Interest-only loans, are they still a thing?
00:30:45.519 --> 00:30:46.720
Yeah, they're still a thing.
00:30:46.960 --> 00:30:50.400
Mm most a lot of investment properties will still be on interest only.
00:30:50.559 --> 00:30:50.880
Yeah.
00:30:51.039 --> 00:31:00.480
Um interest uh I always say people, and I'm again disclaimer, I am financially illiterate, but I always tell people pay your principal place of residence off as fast as you can.
00:31:00.640 --> 00:31:04.799
And that's why I have my investments on interest only, because I want to get my house to zero.
00:31:05.039 --> 00:31:05.279
Correct.
00:31:05.680 --> 00:31:07.119
Then I will chip away at the other loans.
00:31:07.200 --> 00:31:17.440
But once my house, as for as long as my house has a loan, every dollar and cent that I get extra puts into that account to get rid of that loan because it's it's not taxable debt.
00:31:17.759 --> 00:31:18.319
Yeah, exactly.
00:31:18.400 --> 00:31:19.680
Any tax-deductible debt.
00:31:19.839 --> 00:31:26.720
I mean, I'm not a financial advisor or a we are not financial advisors, we are expibrillate primary school students who just work in the same industry.
00:31:26.960 --> 00:31:34.000
Yeah, but I mean, any accountant will probably tell you that you want to pay off your owner-occupied debt, keep your investment debt high because you can claim it.
00:31:34.079 --> 00:31:34.319
Yeah.
00:31:34.480 --> 00:31:36.799
Um, but get your advice from your accountant.
00:31:39.359 --> 00:31:41.119
We've we've smashed a lot of these.
00:31:41.279 --> 00:31:43.200
Uh, how many lenders do you work with?
00:31:43.519 --> 00:31:51.200
Um I wouldn't know the exact number of how many we're accredited with, but it would be about 35 to 40 different lenders that we've got access to.
00:31:51.359 --> 00:31:55.519
Um My mum used to say, Matt Stammers, he works with 70 different banks.
00:31:55.680 --> 00:31:56.240
And I would go.
00:31:56.559 --> 00:31:57.200
That thanks a lot.
00:31:57.599 --> 00:31:58.160
70?
00:31:58.319 --> 00:31:58.480
Okay.
00:31:59.920 --> 00:32:00.559
Yeah, half that.
00:32:00.640 --> 00:32:05.920
But still, I mean, of that we probably consistently use about eight to nine quite regularly.
00:32:06.000 --> 00:32:06.079
Yeah.
00:32:06.240 --> 00:32:09.759
And then over the journey, we've probably used close to 20 of them or 25.
00:32:10.000 --> 00:32:10.400
Yep.
00:32:10.559 --> 00:32:11.920
Um, but yeah.
00:32:13.039 --> 00:32:14.400
We have touched on this.
00:32:14.480 --> 00:32:19.119
What what how do you decide which lender is best from from a client for a client?
00:32:19.359 --> 00:32:22.160
Um, it is really the holistic whole picture of it, isn't it?
00:32:22.240 --> 00:32:25.359
It's not just the interest rate, it's terms and conditions.
00:32:25.920 --> 00:32:27.359
There's interest rate, offset.
00:32:27.519 --> 00:32:30.799
Sometimes people just don't want to change from their general their day-to-day banking.
00:32:30.880 --> 00:32:40.480
And if you can set it up that it's close enough with rates and they've got good products and interest um offset accounts, clients sometimes are happy to pay a slightly higher rate if it means they don't need to move banks.
00:32:40.559 --> 00:32:44.000
And as you've seen over the years, changing banks isn't the smoothest of process.
00:32:44.240 --> 00:32:44.400
Yep.
00:32:44.720 --> 00:32:58.480
So I am I am probably the client that whatever you say goes, we have banked with you with BankQuest, Commonwealth Bank, Westpac, uh maybe not Westpac, NAB is Macquarie.
00:32:58.799 --> 00:32:59.200
Yes.
00:33:00.160 --> 00:33:07.119
But a lot of that is to do with policy, like the latest changes, one bank won't do what you want to do.
00:33:08.000 --> 00:33:13.359
Whenever you say XYZ won't do it, so we're going to have to move to this bank.
00:33:13.519 --> 00:33:23.200
I just get this love for the new bank that's trusting that I'll pay them, and then I'm a stand for them, and I'm like, I would never meet move away from so-and-so, because they gave me a loan when the other one wouldn't.
00:33:23.279 --> 00:33:26.079
And now the one that I'm with now won't give me money.
00:33:26.880 --> 00:33:30.559
Well, they'll give it to me in a way that doesn't work for me, which I find super, super interesting.
00:33:30.640 --> 00:33:36.960
My current financial institution will not lend me a construction and subdivision simultaneous loan.
00:33:37.359 --> 00:33:42.319
They won't do it the three on the one title, which is what you want to do.
00:33:42.720 --> 00:33:43.759
So I have to go somewhere else.
00:33:43.920 --> 00:33:53.279
And now I'm a very loyal multiple options we in that scenario, but obviously one bank's nab's come up as your front runner of the cheapest option.
00:33:53.599 --> 00:34:00.400
I will say that Macquarie Bank settled my last home loan with 100% of the purchase price because my buyer couldn't settle.
00:34:00.480 --> 00:34:01.920
So I still do think they're excellent.
00:34:02.000 --> 00:34:02.240
Yes.
00:34:02.480 --> 00:34:04.000
That will forever be something that I'm grateful for.
00:34:04.319 --> 00:34:09.280
Most brokers would find that Macquarie Bank are one of the better banks to deal with from a service perspective.
00:34:09.760 --> 00:34:13.519
And for me, the stress that that alleviated is invaluable.
00:34:13.679 --> 00:34:19.679
I didn't have to then go and charge my buyer penalty interest and she was heavily pregnant with her first child.
00:34:19.840 --> 00:34:22.400
I was able to say, You're you settle when you can settle.
00:34:22.480 --> 00:34:23.440
I'm able to settle.
00:34:23.679 --> 00:34:28.079
I'm not stressing myself out because all of my things had been cut off and the removalist was booked.
00:34:28.559 --> 00:34:33.760
And that, you know, yes, I had to borrow more money to settle it, but they were fine.
00:34:33.840 --> 00:34:36.800
They were, yep, let's I think they turned it around in two days or something.
00:34:37.119 --> 00:34:37.679
They're notorious.
00:34:38.079 --> 00:34:40.880
You got a late night text message of the day.
00:34:41.519 --> 00:34:45.920
They're notorious from their service levels that they pride themselves on having the best service in the industry.
00:34:46.239 --> 00:34:46.639
Awesome.
00:34:46.800 --> 00:34:46.960
Yeah.
00:34:47.199 --> 00:34:48.719
Um, this is a really good one.
00:34:48.880 --> 00:34:53.440
I'm a first-time buyer, I've got a very small deposit, but a very stable rental history.
00:34:53.599 --> 00:34:55.519
Does that get taken into consideration?
00:34:55.840 --> 00:34:58.400
Yeah, some banks will factor in rental history.
00:34:58.639 --> 00:34:58.960
Awesome.
00:34:59.039 --> 00:35:05.519
Um, your genuine um genuine savings, um, but the money still needs to come from somewhere.
00:35:05.760 --> 00:35:05.920
Yeah.
00:35:06.079 --> 00:35:12.639
So if you're getting it gifted, banks will say, All right, well, because of your rental history, we'll say, look, you've got you can manage your repayment.
00:35:12.800 --> 00:35:16.239
We'll tick that box as your genuine savings, but the money needs to come from somewhere.
00:35:16.320 --> 00:35:20.719
So the purchase still needs to have a 5% deposit plus the fees, um, but it can be done.
00:35:21.119 --> 00:35:25.280
It should be taken into consideration along with child support.
00:35:25.679 --> 00:35:29.760
Banks won't take child support into consideration until it's been consistently paid for 12 months.
00:35:30.079 --> 00:35:30.320
Six.
00:35:30.559 --> 00:35:31.039
Six months.
00:35:31.280 --> 00:35:38.239
Some may factor in in after three, but child support is one of the it's one area that doesn't always get paid.
00:35:38.400 --> 00:35:44.880
So they will put a lot of boots to jump through to make sure that you can get it or to factor it in as income.
00:35:44.960 --> 00:35:49.039
Um, but it is definitely something that you can use if you are receiving child support.
00:35:49.199 --> 00:35:59.599
You just in an ideal world, if it's getting paid through the child support agency and coming out of whoever's paying it's out of their income before they see it, it's the best way for it to be done.
00:35:59.840 --> 00:36:06.559
And that can be something that you elect to do as well as as a as a a co-parenting couple to do.
00:36:06.719 --> 00:36:09.360
You can just have it paid through the child support agency, can't you?
00:36:09.599 --> 00:36:11.840
It's not like a yes, I've never been through the process.
00:36:12.239 --> 00:36:14.079
I've dealt with a lot of people that have.
00:36:14.559 --> 00:36:17.679
I think it depends on how amicable everyone is in the relationship.
00:36:18.079 --> 00:36:21.119
Most people are amical, which is lovely, because that's how you should.
00:36:21.199 --> 00:36:23.440
Well, that's how it is best for everybody.
00:36:23.599 --> 00:36:24.719
Less stress.
00:36:25.119 --> 00:36:27.519
Um, this is a really good one.
00:36:27.679 --> 00:36:31.039
I want to upgrade my house, but I haven't sold my current home.
00:36:31.280 --> 00:36:32.719
What are the options?
00:36:33.280 --> 00:36:37.119
If you've got enough equity, bridging is coming back, baby.
00:36:37.360 --> 00:36:40.639
It is coming back because as we said, people have equity now.
00:36:40.800 --> 00:36:45.280
Where for a long time, for the first 10 years I was doing this job, no one really seemed to have any equity.
00:36:45.840 --> 00:36:53.199
Um, but yeah, if you've got enough equity and you can do bridging, it means you can buy the next one without later letting go of your other one.
00:36:53.760 --> 00:36:59.360
Which is the probably the biggest issue that's facing people these days, is no one wants to buy any uh no one wants to sell.
00:36:59.599 --> 00:37:00.639
Sell subject to sale.
00:37:01.039 --> 00:37:05.760
No one wants to sell subject to sale, no one wants to sell their place before they've got something else to move into.
00:37:06.320 --> 00:37:13.440
I'm finding a lot of people at the moment are just saying, look, we'll we'll get another hundred grand cash out and make our current house better because we can't find what we want.
00:37:13.519 --> 00:37:13.760
Yep.
00:37:13.920 --> 00:37:16.159
We don't want to sell without buying something.
00:37:16.480 --> 00:37:19.360
I fully support that if you're in a location that you love.
00:37:19.599 --> 00:37:23.199
If you're not in a location that you love, don't try and make that ugly shoe fit.
00:37:23.280 --> 00:37:23.440
Yeah.
00:37:23.679 --> 00:37:24.159
Move.
00:37:24.559 --> 00:37:34.079
But if you love your location, borrow more money and extend, renovate, go up, whatever it might be, because the cost to move is extortion.
00:37:35.039 --> 00:37:47.920
Um if an investor's wanting to buy another investment property, can they use the equity in their current property to buy a second property but a third property over their portfolio?
00:37:48.159 --> 00:37:48.800
Yeah, definitely.
00:37:49.039 --> 00:37:52.559
You can as long as you've always got enough equity, it all comes down to the overall picture.
00:37:52.639 --> 00:37:56.480
If you've if everything's under 80%, you're avoiding mortgage insurance.
00:37:56.559 --> 00:38:00.960
Um and if you've got two properties, you've got two properties there that worth of equity that you can use definitely.
00:38:01.519 --> 00:38:03.519
Under 80, keep on collecting them, like Pokemon.
00:38:04.639 --> 00:38:06.800
Um I have poor credit history.
00:38:06.960 --> 00:38:08.719
Is home ownership still possible?
00:38:09.039 --> 00:38:10.960
Yes, it's definitely still possible.
00:38:11.039 --> 00:38:18.480
Um, and a bit like I think one of the questions earlier, that it's more of a long game and saying, all right, well, we can get you into the into a house now.
00:38:18.639 --> 00:38:20.800
Your interest rate might be seven or eight percent.
00:38:20.960 --> 00:38:29.679
But in 12 months' time, 24 months time, if you can keep your um credit history clean, get your credit score up, we can move you into another, into a better rate.
00:38:30.000 --> 00:38:32.480
And you can check your own credit store incredibly easily, can't you?
00:38:32.800 --> 00:38:34.480
Yeah, there's multiple different avenues of checking that.
00:38:34.719 --> 00:38:35.280
And it's free as well.
00:38:35.519 --> 00:38:35.679
Yes.
00:38:35.920 --> 00:38:36.639
All right, beautiful.
00:38:36.800 --> 00:38:42.159
What's the best piece of advice that you can give your clients and you would give my clients?
00:38:43.280 --> 00:38:48.719
Um going in, if you're looking to buy a property, I would say just speak to a broker, get a pre-approval.
00:38:49.440 --> 00:38:50.079
Pre-approval.
00:38:50.320 --> 00:38:51.280
Get it in place, get it.
00:38:51.679 --> 00:38:55.920
When Kirsten says you don't need a pre-approval, just remember Matt says pre-approval.
00:38:56.239 --> 00:38:57.760
Well, depends on where you're at.
00:38:57.840 --> 00:39:03.920
If you're sitting at a home open, maybe just put the offer in and give a broker a call straight after and make sure that it's gonna go ahead.
00:39:04.079 --> 00:39:07.840
Um, but yeah, pre-approval just irons out any questions that the bank's gonna have.
00:39:07.920 --> 00:39:08.079
Yep.
00:39:08.239 --> 00:39:18.159
Um, if they've got questions, get it done before you actually put an offer on and then it gives you the confidence going to a home open that say, hey, I can afford this, I know I can, the bank's already told me I can.
00:39:18.480 --> 00:39:20.400
It's gonna be a smoother transaction.
00:39:20.639 --> 00:39:28.639
It gives the real estate agent confidence that, hey, this isn't gonna fall over, we're not gonna get a decline because you've sort of ironed out any issues that could possibly come up.
00:39:28.960 --> 00:39:31.199
I would recommend submitting your pre-approval with your offer.
00:39:31.360 --> 00:39:41.360
Give them the pre-approval, the real estate agent, because then you've taken literally taken a box off our workflow, which is check finance with finance broker, ensure the broker because some brokers won't tell us information as well.
00:39:41.599 --> 00:39:50.159
But if you're look, I'd be hesitant sometimes depending on or when you the negotiating process is still going on to just say how much they can go to.
00:39:50.320 --> 00:39:50.719
But yeah.
00:39:51.039 --> 00:39:52.719
Oh, I completely respect that.
00:39:52.800 --> 00:39:53.039
Yeah.
00:39:53.199 --> 00:39:56.079
You don't want to bamboozle your own client.
00:39:56.320 --> 00:39:57.280
Yeah, so.
00:39:58.559 --> 00:39:59.760
Most important question.
00:39:59.920 --> 00:40:04.000
How can all of my friends find you so that you can do their pre-approvals before they come to home opens?
00:40:04.400 --> 00:40:07.199
Um, well, I do have an office in Mount Pleasant.
00:40:07.440 --> 00:40:07.760
Right.
00:40:07.840 --> 00:40:09.440
Nice and close to the rowing pavilion.
00:40:09.679 --> 00:40:11.119
Nice and close to the rowing pavilion.
00:40:11.360 --> 00:40:12.880
Go for a coffee or a beer.
00:40:13.360 --> 00:40:17.280
And just give us a call or flick us an email, either way.
00:40:17.360 --> 00:40:18.639
It's the easiest possible way.
00:40:18.880 --> 00:40:19.280
Awesome.
00:40:19.440 --> 00:40:19.760
Thanks.
00:40:19.920 --> 00:40:21.039
Was that painless enough?
00:40:21.280 --> 00:40:23.039
Uh yeah, glad it's over.
