 Jim had been a carpenter for years, but got sick of it so changed careers into plumbing. He became an apprentice to his Dad, and four years later got qualified for an ABN and started to work for him proper.
He needed to upgrade his old ute for the job, and found a near-new model he wanted under a 'chattel' mortgage structure (a business mortgage on a moveable item of property). Jim also needed permission from his wife, so he needed the rate to be sharp and repayments reasonable, to convince her. Two to tango, as they say. Normally property owners that are self-employed are easy and attract the lowest rates. However, Jim had only been self-employed for four months, and had NO financials to back up an argument for stable historical financial dealings. Not a great start to getting the attention of a lender. We knew this one would need a strong sell. Now, because applying for commercial finance for cars, business loans falls outside National Consumer Credit Protection Act Provisions (NCCP), this means; 1) You cannot use salary income from spouses or guarantors 2) On the flip side, it's a commercial decision, so the strength of your credit application is critical. So, to make this one work, we took Jim's bank records and tallied the invoices. We had his accountant draw up some interim financials, which actually showed profit was higher than salary. We proved his wife could cover half the shared debts. And we even structured a tiny deposit into the deal to get it to pass. It was down to the dollars. We negotiated all week with our preferred lender, discussing dollars here and there. It worked! Jim was thrilled with his new ute, his wife was happy with the loan, and it set up his growing business on good footing. Another success story, from Wilson Financial.
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 A couple of years ago I got a call from an old friend of mine Dave. Dave was working in the mines earning great money. He had saved a deposit, and wanted to buy an apartment off the plan.
He asked me if he should buy off the plan. I said no, never, any approval I give you today would not be worth the paper it’s written on in twelve months’ time. We had a good chat; I got him a pre-approval later that week so he could shop around for up to six months. Overall it was an easy loan, wages with a deposit, and stable job, it doesn’t get much easier. As far as I knew, Dave didn’t find anything to buy, so we fell out of touch for a while. Trusting he would contact me when he was on the hunt again, as it happens. When Dave finally called the office well over a year later, I was off sick, so the team got him on to Matt. It had been eighteen months since my initial chat Dave and he had actually purchased off the plan in Brisbane. Against my advice, he had put down a $45k deposit on the unit. Since then, life had changed. Dave had left the mines and started a new business that did not have strong trading figures. To be frank, it was operating at a loss that no amount of industry know how when it comes to understanding financials could rectify. The only income we could prove was the rental income on the unit to be purchased. In terms of outgoings, Dave had rent of his own, plus personal living expenses and personal debts. Further to this, his girlfriend was not even on the lease. In summary, it looked like his outgoings were substantially higher than his income. Dave knew his situation was dire, so came to us for advice. The developers were ready to settle and he didn’t know what to do. His solicitor had advised him that he stood to lose his $45,000 deposit. Dave was worried out of his mind. In order to satisfy a lender, Matt had to do some quick thinking. We knew Dave had purchased with a brother John in the past as this was in some of our broker notes. The brother agreed to go on the application for finance as he had a good income. John would get a twenty percent share in the property for being on the loan. In addition, we added Dave’s girlfriend to the lease to prove he was not responsible for the entire lease on his current home. The application needed to go to a lender that would consider this structure. To ask a lender to accept the brother as carrying the debt, with just a twenty percent share, is not something for a mainstream lender. However, we had someone agree to it and got the application conditionally approved. Things got worse for us as Dave’s broker though. Dave’s accountant suggested the client use a bank he preferred, one of the big four. We advised not to do this, it would be a waste of time and our application would need to go on hold while he did that. Despite our best efforts to sway Dave, he tried the major bank. Of course, the bank declined him, so Dave came back to us, hat in hand, fearful, valuable time had been wasted. He now had just five days to settle the loan! We had to move fast. Matt was secured an extension on settlement through Dave’s solicitor. I received a late night call from Dave one night I was working late, he said “next week is either going to be the best week of my life or the worst. I should have never gone to the other bank, or bought off the plan, but next week I either lose $45 grand or I own a property, I’m so nervous, I can’t even tell you!” I reassured Dave that we were working hard to get it done. Matt and his assistant Jess were working the phones and escalating every step of the way. Even on Friday, at Bong Bong races Matt spent most of the afternoon on his mobile to make sure the deal was approved. The deal was then settled the following Wednesday the following week. Suffice to say, our stories always end on a happy note. Dave settled his unit just in time, despite all the odds being stacked against him.  After four years as a trusted, valued and highly specialised employee, Jack stepped out on his own. He was now six months into an eighteen month contract, that had essentially seen his income double. You might say he was pretty pleased!
Soon, his work would require him up north. He wanted to sell his family's current home in Mittagong so that they could buy in QLD. And as luck would have it, they found a perfect new home there, to accommodate the changing lifestyles of he, his wife and their three kids. The difference was an extra $100,000 which he needed the bank's help with. But upon visiting a mortgage broker, was told the depressing news; "Sorry mate, most Lenders won't look at self employed financials less than two years - and even in rare cases, no less than one year!". Jack walked away frustrated, threatened with losing his family's dream house, of having to sell Mittagong and move twice, first to a QLD rental and then another home. What a headache! He went to another broker and the news got worse. Because his contract had started in April, his Year End 2015 financial returns only reflected 6 months of ABN rego, and only 2 months of self-employment. "No Lender will give you the time of day. Come back in six months." The situation was looking dire. Until he was referred to Wilson Financial. We listened. We checked his salary capacity. We checked the contract. We checked his fantastic repayment history with his current Lender. Then we chatted about what else we could use to strengthen his case for securing a loan. We asked Jack to provide us two letters from large industry bodies; one his former employer, and one his current; both confirmed they had further work for him after the contract. And then to top it off, we proved to his current Lender that he could still afford repayments on a bigger loan with his old salary anyway, let alone on this new doubled income! Our extra efforts worked! It was enough to convince credit to approve Jack's loan! Jack sold Mittagong and bought his family's QLD dream home, both settling within weeks of each other, cutting out 6-12months of inconvenience and wasted moving & rental costs. Jack and his family were absolutely thrilled; and last we heard, Jack was feeling nervous about the long drive up in the car with the kids. We hope he packed his ear plugs! Another success story, from Wilson Financial.  The First Home Owner Grant (New Homes) scheme was established to assist first home buyers buy a new home, or build their home, by offering a $15,000 grant. The scheme will reduce to $10,000 on the 1st of January 2016.
What is a new home? According to the Office of State Revenue, a new home is
To be eligible for the $15,000 grant:
 Real life case study by Liz Wilson
Earlier this month I received an urgent email on the weekend, it was a new client, who wanted buy a house on the market. It's always good to assume there is some urgency when they are emailing on a weekend, and the property is 'on the market'. Moving fast is important in this hot market we're operating in. We met up on Monday, and discussed their existing broker, who had already told this client that their lender won't allow access to further equity in the existing investment property. The broker offered no alternatives. His information is true, I explained, APRA have capped their existing lender at 80% equity lends. The broker is right, but has offered no other options. I explain that there are other options based on the rough figures we have to hand. This involves a minimum deposit lend, or, looking at a lender that will refinance and release equity out of their investment home. We discuss the various rates and fees involved. My client talked to their partner that night, and contacted me on Tuesday to say they love the house so much, they still wish to go ahead with the new lender. They ask what do they say to the agent? They're nervous. I call the agent and get some great advice on what the current interest in the property is, and the fact that the clients need to make an offer, fast. I ask for up to two weeks to exchange, noting that we should be ready in a week, should their offer be accepted and he agrees. This is a great benefit to using a local broker that knows their local agents, if the broker is known to the agent, they will trust you when you say your buyers finance is sound, as they've experienced that track record from you before. As a result of the discussion to the agent the client makes an offer and it is accepted with some time allocated to arrange finance before exchange, the pressure and worry is off. Now, it's simply up to us to make it happen and make it happen fast! We ordered both property valuations that day, and one bonus was, our lenders valuation was substantially higher than their previous lender. In fact, it was higher than the owners estimate, which is a sign of the times. The clients were fast to get information to us, so as a result, later on that week we had the full loan approvals from the bank for both refinance, equity release and purchase funds. Exchange could now proceed subject to their own solicitors requirements, and personal inspections. This is one of the crucial differences when you have a broker working for you. Brokers are about options, not about brick walls or objections. Let us help you find a policy driven, rate driven, fee driven, solutions driven answer for you, whichever is your priority, we can show you how to navigate that maze.  Last month we had a tough deal come through our doors. Why was it tough? Because it was an out of the ordinary car, it was an imported vehicle, which was being sold privately. When it comes to cars, the age, type, condition, model of the car are important factors. Even who is selling the car can dictate your finance, for instance, are you buying it privately, or through a dealer?
In this particular instance, the client had already been quoted through a major car finance brokerage, and they were seeking a second opinion as the rate was very high. I asked to check this and received a copy of the email from the competition, indeed, it was high, double digits. Despite the rate not being explicitly quoted, the combination of deposit, balloon, amount financed and repayment quoted was enough for us to deduce the rate. On top of this, they wanted a hefty deposit, one fifth of the price of the car to be exact, when the client preferred to remain liquid and hold onto their cash. The vehicle was an import from America years ago that had been converted to left hand drive. Further to this, it was already 8 years old, despite having very low KMS. Some lenders would accept these things but not in partnership with the fact that the vehicle was being sold privately. Most lenders would only finance this type of vehicle, if it was sold by a licenced dealer. After some research with our business partners, I identified a bank on our panel that would be willing to look securing finance against the car. To be honest, every other lender said no. I was not disillusioned however, as the bank indicating they would finance it was a good one, with very competitive rates. I shot up the highway to inspect the car, it was in very good condition. As a result of the condition report and photos we were able to negotiate an even lower rate than originally anticipated. Further to this, the client did not have to put any deposit down. In the end our rate with our lender was less than HALF the competition. Yesterday I heard a honk and saw my client wave as I crossed the road, they were in the import car. I gave them a wave and was happily reminded of how narrowly we can escape uncompetitive rates and obtain great results simply by undertaking the research required to be the best in our fields.  A financial strategy, whether it involves buying a home, an investment property or investing through Super will not always succeed without the right ingredients. You need the right professionals. You need someone who is an expert in their field, the way you are an expert in yours. There are a sea of options to choose from, and the direction you take can make or break you. We become our clients greatest allies, we make it happen by turning your personal goals and objectives into a reality.
… But who are we, what makes us different from the rest? The difference is simple. We don’t work for a bank, or a corporation, or a provider. We work for you and we make things happen. Here are four principles that we live by everyday as your trusted mortgage brokers, financial planners, support staff and advocates to the big guys in the corporate worlds… Firstly, we understand that TIME is of the essence. In the property transaction world, time is crucial. If we aren’t efficient and completely on our game, you will miss your mark and someone else will take the property. Time is a critical factor when we present choices for you. Every client has a different time frame, or priority, and we factor that in, and will negotiate on your behalf if you need more time. We understand immediately what needs to be done, and will prioritize your needs in our team when things need to happen quickly. Secondly ADVICE, must be catered to the individual. Everybody is at different stages of their life, career and goals. Whether you need help formulating a plan, implementing a plan, or setting long term strategies into motion, we will guide you through the process, and translate the jargon and technical terms into language you can understand. When we talk to you, we factor in your ambitions. It may be to save money, it may be to legitimately minimize taxes. It may simply be that you have a young family, or you are about to start one, and need to re-think your financial strategy. No-ones situation is ‘too difficult’. It is part of our everyday routine to solve people’s problems. Its an important philosophy here at Wilson Financial to be compassionate to our clients. Whether you’ve had a credit default you need help with, or are simply buying a new car, advice is only useful if it suits you and your own personal needs. Third, INTEGRITY. If we make a commitment to help someone our prerogative is to do whatever it takes to get it done. That can mean pushing, escalating, negotiating, researching and being generally tenacious about getting something approved. This can be true of both dealing with credit, and dealing with underwriters. George here for instance, advocates heavily for his clients to be underwritten without policy exceptions wherever possible. We negotiate with the banks, insurers and lenders on your behalf, and we come back to our clients with definitive outcomes. We understand that fine print is not everyone’s strong point, we make it our strong point so that nothing falls through the cracks. Recently, we noticed a lender took security over two properties when we had clearly instructed them to take it over just one. As a result, we hold them accountable to fix it and fix it quickly. An advocate with an integrity is a good friend in the finance world. Lastly, CARE. We care about you. We take it personally, we want you to succeed. We want you to enjoy the journey. We will do anything in our power to protect your best interests. We will listen to you. We will help you. We will make it happen.  By George William Root
I remember as a child sitting at my Dad’s feet as he had a beer with one of his friends. They were complaining about money, the economy, their bosses, the usual conversation. Taxes are extortionate, we are underpaid and meanwhile the Insurance companies are ripping everyone off. It’s a racket! Everyone knows someone with a story about how they didn’t get paid out on their insurance. Whether it’s travel insurance that doesn’t pay for doctors’ bills when you get hurt skiing or workers compensation that didn’t pay out because of a few lines in the fine print. Insurers are just out to make money, not pay claims. Some years later a close family friend got into a car accident with her two children in the car. The children only suffered very minor injuries, but the mother broke her back and neck. Whilst she regained some movement in her arms and torso she was stuck in a wheel chair for the rest of her life. When we went to visit her two months later the house looked completely different, there was a ramp leading up to the front door, a stair lift to go between the floors and she had a new car that was fitted out so it could be driven without the use of her feet and legs. They also had someone working at the house with them to help take care of the children whilst her husband continued to work in his job as an airline pilot. I remember asking my mum about what had happened, and she said that they got an insurance payout. I felt confused, because knowing that insurance is a rip-off and can’t be trusted, why did they pay for all this stuff? She had received a one million dollar permanent disability pay-out on a policy she had applied for through her employer where she worked part time as a secretary. In the late 1980’s that was a tidy sum, and with those funds they were able to minimise the damage that a terrible accident created for their family. She was able to pay off the mortgage on their family home and pay for renovations to allow her to keep living her life with her disability. The truth is Insurance is just like the car she was driving. There are cars that are held together with cheap glue and staples, and there are cars that are built by engineering masterminds that will protect you when the worst happens. The same is true of anything. Some insurers advertise heavily on TV, you can call a number and twenty minutes later you have a million dollars’ worth of life cover that may potentially not be worth a dollar. When it comes to claim time, the rules are rigorous and you must fit clearly defined criteria to obtain a payout. We don’t deal with careless insurance here, and it doesn’t take twenty minutes to get insured. It’s an in depth process where we disclose every medical detail to an insurer. It can take a month or more of interviews, assessments and advice. As your adviser I am here to be your ally through this process, to get you the right type of cover and the right level of cover. To assist you through the claims process and to review your situation to make sure that everything makes sense as your situation changes. An ‘easy’ insurance policy is not your friend at claim time, but a real financial adviser and insurance company can save your livelihood at claim time, and take a situation that could ruin your life and rectify it. A couple of million dollars doesn’t bring back a lost loved one, or give you back the use of your legs, but it will make life a lot easier.  There are so many interesting myths about who the 'bank valuer' is, and what they do, or even how hard they work, that I thought I'd share some industry knowledge on the subject.
A Property Valuer is a qualified professional whose job is to assess the value of property. Banks and other lenders engage property valuers to undertake valuations to determine the worth of property when mortgage loan applications are made and to assess the feasibility of the proposed purchase. They are tertiary educated and accredited by the Australian Property Institute (API). Banks do not take into consideration real estate agent appraisals, as these are not objective or independent. What does the valuer actually do? A Valuer may only spend 5-10 minutes at your house and may seem in a rush, this is because they normally have many appointments to make. Behind the scenes the Valuer is doing a lot of work. They are not so interested in the overall presentation and cleanliness of your house (although some decorum is surely to be appreciated) but they are interested in the quality of workmanship, build of the house, block features/frontages, house size and so on. Many firms now adopt a process managed entirely through a valuation management system (VMS). Through the VMS every detail, record and dealing with the property is recorded for future reference. In general terms, to value a property a licensed Valuer will do the following:
So for optimal results, keep the place neat and tidy, provide any information to the Valuer that might support your case, and then leave them in peace to get on with their job. If it’s got anything to do with property, the chances are that a Licensed Valuer will be able to provide you with some of the best information available to assist in your decision making process. What can you do if you disagree with the bank valuation? The valuation of any property is a serious and involved process, reliant on confirmed sales in writing. If an individual truly believes in a particular value of their property confirmable sales data must be available to back it up. This sales data must include (but is not limited to):
The perception that listing or asking prices on property can be used as an ‘indication’ of value is false. They in fact offer little more than an agent’s capacity to place a number on a board. A home cannot be valued based on someone’s ideal sales price. Confirmed sales in a current market (no more than six months old) are essential elements of a professional valuation. The Lenders and how they see things Lenders compliance managers are constantly finding ways to make the process more objective and at arms length. It is very uncommon to have a bank valuer come from the actual branch, although this does still happen, it is very rare.. Lenders are driven by their own concerns and those of the industry regulator (APRA) evidenced by the adoption of some of the following practices:
Overall, it is important to take heed of the important and crucial role valuers play for the banks. They are not 'on the banks side' they do err on the side of caution but they are also under pressure to keep all parties satisfied with the outcome. As such, if you have a dispute with a valuers valuation, the best thing to do is keep calm, look at the figures they have used, and find evidence to the contrary to support your claim for a higher valuation. I have on many times assisted clients dispute a valuation with success, and worked together with the valuer to find a common ground. An important part of this process is to have data, to help support your claims.  Big changes have been developing in the lending sector in relation to investment home loans. This will affect many of you who already have, or are considering investment lending. This issue is for current and developing changes. New announcements are coming out weekly so please follow us on Facebook or Twitter for individual lender announcements, or call us to discuss loan switching, loan review, or other general questions you may have. For those without investment lending, please feel free to forward this article to investors you know who will be interested in the changes, given there are some tight deadlines below from two major banks. These announcements are specific to my current lender panel so will not represent all lenders in Australia. Some lenders are increasing on interest only regardless of whether they are investment loans or not, and some are restricting their maximum loan to value ratio heavily, this is mostly in relation to investment loans but some have also reduced owner occupied loan LVR’s.
AMP No longer accepting investment lending including self managed super fund lending. Variable rates on existing investment loans are to increase by 0.47% effective 7th September 2015 ANZ Variable rates for investment loans are increasing by 0.27% as of the 10th of August. Fixed rates for investment lending have already increased by up to 0.30% across the various terms on offer. Commonwealth Bank Variable rates for new and existing investment home loans will increase by 0.27% effective Monday 10th August 2015. Fixed Rates all increased between 0.10% and 0.40% across terms for investment loans as of today Bankwest Super Start Home Loans reduced to 4.09% yet investment loans increased to 4.39% across this product range effective 28th July ING All investment lending is capped at a maximum of 80% Owner occupied refinance loans capped at 80% Macquarie Fixed and Variable rates increased today by 0.27% for investment loans NAB Variable rates increased by 0.29% as of the 10th August for all interest only loans, regardless of whether they are investment or owner occupied loans. Interest only fixed rates for owner occupied and investment will increase by 0.29% on the 10th August. It is uncommon to have notice so there is still time to ring your bank and lock in the current fixed rates. Why are these changes happening? APRA, under advice from the Reserve Bank, are monitoring banks lending practices and requiring that they limit their investment lending growth to 10%. The banks are therefore adjusting the attractiveness of their investment lending in order to slow growth. As a means to balance their lending portfolios they will be more aggressive in obtaining larger shares of owner occupied lending markets. As a result you can expect to see better discounts for owner occupied loans, and higher margins for investment lending. We are already beginning to see some refinance campaigns announced for owner occupiers, enticing borrowers to leave their current lender and move their borrowings over. This typically attracts sub 80% lends as nobody with LMI fees wishes to move and pay again, so this will be a popular strategy for banks and lenders in balancing their owner occupied vs investment books, whilst bolstering capital holdings and lending growth whilst still throttling the investment growth. Other recent changes All major banks have adjusted their loan to value ratios for investment lending. In many cases, you must now have larger deposits for investment loans, in nearly all cases you will require 10% plus costs, unless you have a very strong equity position in other property. Many smaller lenders and banks were already in this position due to earlier targeting by APRA to balance their investment lending growth or hold more capital. Some lenders, such as Bankwest, St George, and ING will restrict investment lending to only 80% already. These changes have been occurring over the past months. Some lenders are now also adding up to 20%-25% buffers on investment loan repayments, and/or no longer including the negative gearing benefits for borrowing capacity. Nearly all lenders are now assessing your new home loans at nearly 3% above your actual repayment also. Further to this, the housing expenditure measure (which is an industry measure for the cost of living for each household, adult and child) has been revised up a number of times, so this will drive affordability down for new loans. Overall, borrowing capacities are being affected. So it is important to obtain verifiable employment sources, be consistent in your incomes, and at all times, talk to your brokers about how to improve your borrowing power if required.  What is an offset account?
An offset account is a separate account to your home loan, which is linked in the banks computer systems, so that the balance held in the offset account, is daily, offset against the interest accruing on your home loan. For example, if you set $10,000 into your home loan offset account for a month, on a loan of 6.90% interest, you would save around $57 interest for that month. The effect of placing this amount directly into the redraw account of the loan is exactly the same (for a variable loan) interest savings. Why use an offset and not redraw 100% offset accounts are normally easier to access, and can be run as transaction accounts for your income, bills, and other needs. Some banks offer unlimited offset accounts where you can run lots of offset accounts against the same home loan. Offset accounts also help you to quarantine the extra repayments. Further to this, they may offer you savings in future should you decide to turn an owner occupied home loan into an investment, read more on this here. Why do offsets and fixed rates not mix The banks do not have functionality to offer offset accounts on fixed rates. This is largely because fixed rates are bought at set wholesale prices for and paid for in advance. Any offset made against this would be a loss by the bank and therefore is not a financially viable product for the banks. Why not just put my money into a savings account or term deposit and earn interest? When you 'save' money in terms of less interest, the tax office doesn't ask for a slice of your savings. However, the moment you put money into an interest bearing account, you will need to declare this in your tax return and are likely pay tax on it at your top marginal tax rate. For many this is 32c in the dollar, so your savings are quickly eroded by the tax man. How do I get an offset account  It's tax time so in order to get ready for lodging your return we have a handy guide to assist you with getting your documents ready. Many of your financial and services providers will send you end of year statements so simply file them all as they come in. For accounts you can easily access summaries online for end of financial year fees and interest charges, for both interest paid and interest earned. INCOME DOCUMENTS Group certificate / Payment Summaries from employers Lump sum / Termination Payment Summaries Government payment statements Interest income statements for savings accounts etc. Dividend statements Annual statements for managed funds income Rental property statements Business income reports Foreign Income Capital Gains records (Contracts of sale for goods sold) EXPENSE DOCUMENTS Work Expenses and receipts Depreciation reports on properties Donations to charities receipts Income protection statements Receipts for works, repairs, or purchases for rental properties Interest and fees charges on any investment or business loans Health Insurance statement OTHER Tax File Number Identification & Medicare Number BSB and Account number for your refund As we welcome in a new financial year we thought it was time to take a look at what the experts are forecasting for the year ahead.
 Switching your loan is a great way to make changes to your financial security, your budget, and your overall goals. What is switching? It's the buzzword the banks use to describe the 'process' of changing your loan rate, product, or features during the course of the loan. Below are some real life switching examples that we have assisted people with
Switching from Principle & Interest, to Interest Only Many of our clients upgrade their housing to a new home but keep their existing as an investment. In this scenario, we often, with the advice of an accountant, opt to switch the home loan into an interest only feature for between 1 to 5 years. This is the most common reason to switch. People experiencing short term cash flow issues may opt to switch their home loan into interest only for a year until the budget pressures are off. This might happen when you have a new child and maternity/paternity leave is taken, for instance. Switching from Interest Only, to Principle & Interest Sometimes you may wish to re-align your financial goals. If times are good and cash flow is strong and steady, why not start to hammer some of the principle off your investment loans? We have a great range of calculators here on our website that will help you work out what repayments will meet your target. Click here for our calculators. Switching from Standard Variable to Fixed Thinking of locking your interest rate in? Most banks have a 1,2,3,4 and 5 year fixed option to help you and your family budget for repayments. With fixed rates being at record lows, many of our clients are considering a switch to fixed. If you're not sure you can always opt to split your loan into part fixed and part variable so as to hedge your bets a little both ways. Switching from Standard Variable to a Basic Home Loan Loans that are a little older tend to be on less competitive rates, when people ring us we sometimes simply discuss the option to switch into their current lenders basic home loan which will mean a cheaper rate, but less features. We can discuss whether or not there is a benefit and what features are important before you opt to do so. Switching a line of credit into a standard home loan So many people have lines of credit that are maxed out and no longer being paid off, perhaps it's time to switch to an amortising home loan that you can pay down over the next 25-30 years. They tend to hang around indefinitely if you don't. It is not always necessary to refinance for a better option. If you're not sure about your home loan, feel free to contact us to have a review of your current rate, product options and to obtain assistance in switching.  Australia is a big country and Australians love land. For so many of us, to own land, have land, harvest and use land is at the core of our sense of self. Not to mention, the sheer enjoyment of owning your space AND the views.
Having worked as a mortgage broker in both Port Douglas and Bowral for ten years; 'acreage', 'rural zoning', 'dwelling entitlements' are words I hear and deal with regularly. Some lenders simply won't finance over five acres, or secure against rural zoning, so we really need to know our lenders policies. A recent case really highlighted this, and here is how we overcame it.... The land An agent came to me experiencing difficulty in country NSW with a listing that wouldn't exchange due to the buyers having problems with lenders. The block was located outside part of a new development that was not close to any towns, so comparable sales were restricted. The clients had experienced difficulty in financing the blocks with not just one, but two local lenders, both of which had ended up declining the finance once the valuer sent their report in. This was not surprising, the zoning was rural, there were limited comparable sales, and the block was well over five acres. A trifecta of issues for most lenders, however, not insurmountable with the right lender and loan structure. The clients The clients met with me to discuss a strategy. The blocks were clearly important to them and supported a dream to move and reside there happily, and away from suburbia. We discussed the various hurdles lenders have and agreed on a strategy that met with their budget, covered all the fees, and fit well with cash flow. It was important that we took the equity out of their own home, so that the block could be purchased at 80% loan to value ratio or less, rather than financing it the other way around as many would do (load the debt more heavily against the property that was not their home). The strategy thus far was to: 1) Use a lender that was comfortable with large acreage's and rural zoning 2) Secure the debt at 80% LVR by using additional equity from the clients home 3) Finance some equipment required within the clients 'dream outcome', with equipment finance rather than equity so as to keep the LVR at 80%, rates low, fees low, and avoid discomfort from a mortgage insurer Things got a little trickier... In getting the application ready, and researching options, I uncovered that the blocks size would not allow for a dwelling entitlement within the local council's development control plans. Even a lender that accepts rural and larger blocks would have issues with this! If the clients wanted to truly retire on the land later, they were running the risk of council not allowing the land to be occupied or built on. I rang the agent immediately, and explained the situation. It's important that all parties work towards a common goal, and this was an agent I trusted. The agent said straight away if the bank wanted more land the vendors could could sell more land by adding more titles and revising the price. More land was added sufficient to meet the acreage required for council to grant dwelling entitlements. The clients, after considering that they wanted to legally occupy the land later, opted to take the offer. On the contract, we now had three titles for sale, all adjoining blocks, that once combined would meet the minimum size requirements of forty hectares for a dwelling entitlement. Upon ordering a valuation, I sent notes to the valuer to have this explicitly written in to the bank valuers comments. This did take extra time, but as both the clients and vendors agent understood, this was a necessary part of ensuring that we obtained approval. Dealing with credit Of course, once credit got the valuation and contract they questioned it, so we discussed providing the bank with comfort, by obtaining a letter from council explaining that the consolidation of the lots to one total area would give it dwelling entitlement. The council's town planners charged a small fee for this service and provided it in a couple of days. From there, we got stuck in the valuations department, as valuations weren't sure what to do with the comments. I rang the head of credit, and discussed the predicament. He requested a letter of undertaking from the clients that they would combine the lots through the Land Property Information office within twelve months, and a full approval was granted. Of course this is not something that happens every day, but each property, or client has their own personal hurdles and simple negotiation is all that is often required to bring all the parties together. Guest Blogger Trevor Fair of Oxley Partners - Bowral The 2015 Federal Budget has provided small business a significant tax deduction with the announcement of the $20,000 instant tax write-off for asset acquisitions. Eligible businesses must not only have an ABN, but also be actively trading, and the purchases must relate to the enterprise. The scheme allows businesses to acquire assets, either new or second hand which cost under $20,000 for each asset to be instantly written off in the year of acquisition.
The commencement date is from budget night until 30 June 2017, so this scheme can be taken advantage of before the end of this financial year. There is no limit to the number of assets which can be written off, however to get maximum benefit businesses should have taxable income which to offset the depreciation against. Further to this, if you use the correct structure to own the asset in the enterprise such as a chattel mortgage, via your finance broker, you can finance the asset over your standard five year term, yet take advantage of the instant depreciation write down immediately. For equipment over $20,000 there is still the asset pooling option where the depreciation is 15% in the first year and then 30% in subsequent years.  Record low interest rates and an ever growing population have pushed new home approvals to an all time High. Approvals for construction of new homes rose 2.8% in March the highest monthly reading since 1983. Housing trends are underpinning the type of growth with the number of multi-unit dwellings approved in March overtaking free-standing houses for the first time. St George cheif economist Hans Kunnen says there has been a big move in Australians wanting to live in apartments, townhouses and semi-detached houses. He also states that this explains relatively wekaer price growth of late among units as compared to houses. HIA economist Shane Garrett said that low interest rates and a strong population were driving the home building boom. With a $15,000 great start grant still available to first home buyers and stamp duty discounts on land for anyone intending to build now we have certainly seen the trend at Wilson Financial.
Source - www.thebull.com.au  Does the cost to insure yourself prevent you from protecting your greatest asset?
Insurers have caught onto the rising pressure of living expenses, so they now offer new funding methods that can remove the burden of insurance from your monthly pay packet. For many with tight budgets, where one adult has temporarily stopped working to raise children, adequate Insurance is seen as a superfluous item and never taken out, even when large debts are taken on to finance the family home. This is a big risk for a family, so there are alternate ways to fund protection that you should explore. What’s the answer? How do we afford insurance? It is often said that the only constant in the Financial Services Industry and even life, is change. Due to constantly evolving government legislation, client requirements and industry developments, Insurance and Investment products are always evolving. To maintain competitiveness, some insurers are allowing insurance premiums to be fully or partially funded through superannuation, thus allowing you to become insured, but removing a large part of the out of pocket expense. Funding Insurance premiums through Superannuation has been an option for quite some time, but often clients would end up sacrificing the strength of the policy in order to avoid costs. Are there any catches? In some instances, a policy fully funded by super can ‘weaken’ your policy because they don’t offer the same features as policies outside of Super, or there is a conflict with the rules and guidelines of the Superannuation environment. For example; you are unable to acquire own occupation total and permanent disability cover or, agreed value income protection exclusively through super. What this means is, if you were to be totally and permanently disabled but only had 'any' occupation cover, your TPD may not pay if you are still able to do another job type. How does partial payments work? Given that you have already paid tax at your marginal rate on the money that’s in your wallet, people want to spend as little as possible on Insurance premiums. This flexi-linked fee structure allows clients to split many different types of Insurance, including Income Protection. A financial planner can review your specific scenario and provide formal advice on how best to structure a split paid policy premium, if that is determined to be the best option for you. When doesn't it work? This will depend on the level of Super Contributions being made, and the recommended level of cover that you need. In the end Superannuation is a means of funding our own retirement, and should be used as such. A Financial Planners role is to provide recommendations so that you can benefit from the Financial Products available, and understand the sometimes complex frameworks of Superannuation and Insurance. For any Insurance queries, or to organise a review of your Superannuation, Investments and Insurance please contact me on [email protected] THE AUSTRALIAN
APRIL 20, 2015 12:00AM Shane Rodgers had a lot to learn aged 25. If we were able to go back in time and talk to our 25-year-old selves, what advice would we give? Just in case a time machine ever comes along, this is the career advice I would give my 25-year-old self. 1. A career is a marathon, not a sprint: Chill. When we are younger we tend to be impatient. As you get older you realise there is no real rush. Life, and the careers we pursue to fill it and pay the bills, needs to be approached on a long-term basis. If you sprint, you will wear out or start to resent work that you previously enjoyed. Allow yourself time to breathe and grow. Things will come if you work hard and allow yourself time to improve. Always rushing leaves you empty, and tired. It is fine to give yourself permission to take some time in the slow lane. You will find yourself seeing things on the journey that you didn’t realise were there. 2. Success comes from repetition : I remember hairdressing legend Stefan Ackerie telling me this in 2003. I had never really thought about it before. A few years later Malcolm Gladwell’s brilliant book Outliers was published, promoting the idea that you needed to spend 10,000 hours on something to become truly expert at it. The lesson here is get good at things before you try to move to the next thing. Genuine expertise belongs to an elite few. They seldom have superpowers. They have endurance, patience and take a long-term view. They also love what they do. If you find that, don’t let it go. 3. Get your priorities right: It is well established that nobody laments on their death bed that they didn’t spend enough time at the office. Yet still we let contrived circumstances and trivial issues keep us from important events such as school sport days and kids getting badges for picking up rubbish. I can remember every sport day and certificate presentation I missed. I can’t remember any of the reasons I missed them. Over the long haul, it doesn’t matter if you have a few years when your career is in canter mode while you prioritise young children. I was watching some video of my kids when they were little and I realised, again, that the little people in that video don’t exist in that form any more. They have grown into pride-worthy adults but the tiny people with wonder in their eyes were just passing through. 4. Always act like you are 35: A recruiter gave me this advice some years ago. It is inspired. What she meant was, when you are young in the workplace, don’t act as a novice. If you are smart and competent, step up and do what you are capable of in a mature way. Similarly, when you are older, don’t act like it. Approach your day with youthful energy. To quote a Frank Sinatra song: “You’re 35 and it’s a very good year.” 5. Management is about people, not things: It is easy to fall into the trap of believing that all people are equal, behave the same and have a generic capacity to perform. Humans are simply not made like that. Business guru Jack Welch says the workforce consists of 20 per cent of people who are high performers, 10 per cent that you should get rid of and 70 per cent who do OK. The issue is the 70 per cent. Most managers want everyone in the 20 per cent. We need to be careful not to believe that the 70 per cent are underperformers. Sometimes we need to celebrate the competence of the masses, not the superpowers of the elite. As managers, we don’t just manage but empower people and make the best use of whatever they bring to the table. 6. Genuinely listen to others: It is easy to fall into the trap of thinking we have all the answers as individuals. We don’t. As a group we are far more powerful. We need to genuinely collaborate and really listen to others. And we need to ask our own people first. 7. Never work for horrible bastards: Life is way too short to tolerate really bad bosses. If you find yourself working for one, unless you are desperate or starving, start looking for a new job. Immediately. Then sack the bad boss. By leaving. 8. Recognise that staff are people with finite emotional capacity: It is clear to me now that humans have a limited emotional capacity. If there is something challenging happening in their personal lives, they have finite capacity left to deal with work. In nearly 100 per cent of cases I dealt with of people suddenly underperforming in the office, it has nothing to do with work. When good people have problems, managers and companies need to carry them. This should be a personal mission. If we carry people when they most need it, we become a stronger community. A reinvigorated broken employee is a corporation’s most powerful force. 9. Don’t just network with people your own age: Beware the whiz kid syndrome. Smart, young people have a habit of forming communities of other smart young people. In fact networking should be about meeting useful mentors and career champions who can open doors and fast track careers. Similarly, older, successful people shouldn’t just sit in musty clubs talking about the 1970s. They should seek out smart, young people who can shake them out of their comfort zone. 10. Take the time to understand what your business does: I love the story of President John F. Kennedy’s visit to NASA during which he asked a cleaner what his job was. The cleaner replied that he sent rockets to the moon. All of us should feel part of what our organisations actually do. We should be part of the big picture and feel connected with the true objectives of our workplace. 11. Work in an office where you have friends: You will spend a lot of time at work. You should work with people you like. I used to be a bit sceptical about a question in employment engagement surveys asking people if they had a “best friend” at work. I realise now that work is much better if you are among friends. The happiest people are those who do things they are passionate about with people they really like. 12. Never sacrifice personal ethics for a work reason: Crucial to workplace happiness is value alignment. If you work somewhere that compromises your personal ethics and values, get out of there as quickly as you can. Good people will be unnerved by things that don’t feel right. If it doesn’t feel right, it probably isn’t. Bad things only manifest when good people don’t take a stand. 13. Recognise that failure is learning: As bizarre as it might sound, failing is not failure. Researchers recognise that failure is just part of a process to eliminate unsuccessful options. Thomas Edison articulated this best: “I have not failed. I have just found 10,000 ways that don’t work.” If we fear failure we tend to take a minimalist approach to our jobs. Take some risks. Sometimes failing spectacularly is the best evidence that we are alive, human and serious about aspiring to the extraordinary. There is no value in being ordinary when you have the capacity to be remarkable.  Any steps you can take to pay off your mortgage sooner are well worth the effort and time involved.
If you are living in your property (as an owner-occupier), the interest paid on your mortgage is not tax deductible. Mortgage repayments are made from your after-tax income. Any money you can save on your home loan is therefore even more valuable. Thinking about this in another way, generally the interest you save yourself on your home loan is worth more than the same amount earned from an investment. Low interest rates are good news for everyone with a mortgage. The reason being that low interest rates provide the perfect opportunity for home owners to get ahead on their home loans by making additional payments towards their mortgages. The consequence of lower rates is lower repayments – making your mortgage more affordable and perhaps even meaning you will have money in reserve should interest rates increase. One fabulous thing you can do with the additional funds is put it straight back into your mortgage Why Pay Extra? Paying more than the minimum will help you pay off your mortgage faster because the extra repayments are going towards the principal of the loan rather than the interest. Not only will you pay off your mortgage sooner, you will also pay less over the life of your loan because you will reduce the interest charges. Making extra repayments is even more important in the first five to eight years of your mortgage, according to the Australian Securities & Investments Commission (ASIC). As ASIC states on its Money Smart website, most of your payments in those first few years go towards paying off the interest, therefore any additional repayments can make a huge difference in shortening the life of your loan. Low interest rates actually present us all with a wonderful opportunity to reduce our debts faster. If interest rates fall, your lender may give you the option to reduce your repayments. Try to resist the temptation! If you maintain your current level, you will reduce the amount outstanding on your mortgage, and pay if off sooner. Please give us a call to discuss the benefits of this strategy further.  Cash Rate Futures (below) provide an exact measure of market expectations for the official cash rate over the next 18 months. The implied probability of changes in the cash rate can be calculated from these expectations. On current pricing, the RBA is seen cutting rates by 25bps by April with a further 25bp cut to be delivered by the end of the year. Expectations for further monetary policy easing will bolster confidence in property markets, giving further uplift to house prices and encouraging investors to stay in the market a while longer in light of cheaper lending rates. Concern about the impact of rate hikes on the housing market had been weighing on price growth but have dissipated for the time being as expectations for rates were revised down. A balanced approach should be taken when weighing up fixed versus variable rates over the next year, as 1 to 5 year term rates remain roughly on par with the variable, tending to imply that banks consider rates are likely to be stable in the medium term. It's interesting to note that the cash rate is already below the low reached during the global financial crisis, which raises the question of why? Much of the answer has to do with global commodity prices, the impact of collapsing iron ore and coal prices on the mining sector. Weaker prices are accelerating the downturn in resource sector investment and this is dragging on growth while the rest of the economy continues to struggle. The much anticipated transition from mining-led activity to broader-based growth is yet to fully manifest itself and appears unlikely to do so with business and consumer confidence muted. December quarter inflation figures released this morning provided a partial check on expectations for further rates cuts. Despite the flat headline number, +0.2 per cent in the quarter and just +1.7 per cent over the year, the important underlying measures were firmer than expected and may be signalling a strengthening of inflation over the medium term. The +0.7 per cent quarterly increase in both the trimmed mean and weighted median measures of inflation annualises to a rate of +2.8 per cent and if repeated in the June quarter would raise alarm bells for the Reserve Bank and likely lead to significant revisions to current expectations for cuts to the cash rate. An interesting regulatory issue to watch this year that will affect anybody seeking finance, is the mooted macroprudential regulations scheduled for late 2015. The exact detail of these changes remains unknown but in the broad these regulations will seek to mitigate risk in the financial system in the whole by constraining bank lending policies. Macroprudential regulations work to limit excesses that can develop during credit booms. Initial speculation is that banks may have their loan to value ratios restricted for instance, capping lending to 90% of values. Since then however, last Friday, APRA announced that nine banks (three of which are big four banks) all fell under their risk indicator. The focus of this report was on investor loan book growth. In response to this the Reserve Bank of Australia has noted that this is fueling additional speculative activity in the market, particularly noting the house price growth is not in line with growth in household incomes. Attempts to stem systemic risk in the banking system will ultimately take the wind out of lending growth. What we see is increasing bank rate competitiveness, other areas for policies to open up to compensate for lending growth, and a general restructure of goal posts for bank credit appetites.   The residential property market is Australia’s single largest, and most valuable asset class with a total estimated value of $5.2 trillion as at January 2014 according to Core Logic. Since the combined capital city housing market began its current growth phase in June 2012 values have increased significantly in Sydney (31.2%), with growth more moderate in Melbourne (17.6%), Darwin (17.5%) and Perth (15.5%) and much slower elsewhere. Combined capital city home values have increased by 8.5% over the 12 months to November 2014 and by 7.0% over the first 11 months of 2014. The annual rate of home value growth peaked in April 2014 at 11.5% across the combined capitals, slowing to 8.5% in November. This trend has been reflected across all capital cities except for Hobart. Core Logic RP Data anticipates that the rate of capital growth, particularly in Sydney and Melbourne will continue to moderate over the coming year. logic anticipates that values will continue to rise until such time that interest rates increase. Households Labour force data for January 2014 recorded the national unemployment rate at 6.0% which was the highest national unemployment rate since July 2003. In November 2014 it was steady at 6.20%. Further to this, household income growth, consumer and business confidences are all low off the back of the mining sector slow down. Loss making sales and Regional areas An interesting by product of recent hikes in property values in major cities is hypothesis that other markets will improve as investors and those priced out of the expensive markets start to look for alternatives. Discounting in regional areas is lessening. Over 12 months to January 2014, the most expensive 25 per cent of capital city suburbs recorded the greatest increase in home values, while the most affordable 25 per cent of suburbs recorded the lowest rate of value growth. Despite realised losses on residential property declining, across the country homes that have been owned for between three and five years were most likely to experience a loss. Regional markets continue to be the most likely areas to record loss making sales. Loss Making Home resales for the Dec 2013 QTR 
 *** UPDATE SEPT 2016*** Please note this process has changed. We recommend using a credit repair agency. In the comments, you will see that some people had success with a firm called MTA partners, and further we have had clients have success with We Fix Credit www.wefixcredit.com.au - we however take no responsibility for the outcomes you experience with these firms and we are not a credit repair agency. We wish you the best and please read on for some basics ! Best wishes, Liz
There are all sorts of bad things that companies or people can do to affect your credit file, one of these is a court judgement. This is when someone has taken you to court, normally the local court for a minor claim, and have won a case against you. If they have you will have a 'court judgement' listed on your credit file which is very bad for your credit. It is unlikely mainstream lenders will lend to you if the court judgement is listed. Particularly if it is more then say $100. I have had some success with assisting clients to remove court judgement from their file so here are the steps to go through. Step 1. You absolutely must settle the debt - this means pay it out with the plaintiff. Contact them first and suggest that you are now willing to pay out the debt, if they will co-operate and sign a notice of discontinuance. While you haven't paid them yet, is the time to negotiate on this, don't pay and then ask them to sign something to assist! They may still be steaming from the fact that they had to take you to court over it. Step 2. Once you have agreed to pay, and the plaintiff has agreed to sign on receipt of payment, Complete one of these forms with the assistance of the local court, or a solicitor http://www.ucprforms.justice.nsw.gov.au/ Form 33 "Notice of discontinuance" Step 3. Once paid, have the plaintiff sign, and yourself sign, and any legal representatives still working on the case sign, then go to the local court where the judgement was filed and lodge the form. Hold a copy of the form on file in case it is lost. Step 4. Wait approximately 2 weeks for it to be processed then order a new copy of your credit file from VEDA. You can obtain it FREE by using this link If you find the court judgement still shows you will need to check with the local court that it was processed, if it was, you will you need to check with VEDA as they may have a back log. It's a bit of a process but once removed you are now clear to apply for credit (assuming you have no other credit marks on your file!). Good luck! Positive Credit Scoring
A number of recent changes to Australian ‘Privacy Legislation’ are in direct relation to Comprehensive Credit Reporting – better known as Positive Credit Scoring. In this article we take a look at the significance of the changes and how they affect us all. In the most simple terms Positive Credit Scoring is a complex mathematical algorithm designed to assess an individuals finance application relative to their own personal ‘financial score card’. A comprehensive compilation of historical data is used to create each of our ‘credit scores’. Most lenders will now use Positive Credit Scoring to assess applications for finance. Information provided in an individuals credit report may have an impact on their credit score. Lenders will now be able to compare information in your credit report with the information provided in finance applications. As a result – full disclosure is even more important than ever before. Anyone (including lenders) can now access a copy of your credit report, enabling them to compare in detail the information you provide with the details on the report. Comprehensive Credit Reporting Previously in Australia the Credit Reporting Agencies (such as: Veda and Dunn & Bradstreet) recorded limited detail on borrowings, company directorships, etc, and detailed any defaults or judgements. It was useful to see if someone was potentially a bad credit risk (Negative Credit Reporting), however was not really designed to identify ‘good’ credit risks. With Comprehensive Credit Reporting, more information is gathered and then analysed to give you a score and ranking. Your score is calculated based on the information held in your credit report at a given point in time. Your score is dynamic and predicts the likelihood of an adverse event, like a default, being recorded on a credit report within the next 12 months. Your score indicates how you compare to other credit-active Australians in the credit-reporting database. Lenders are likely to use this information as part of their credit assessment process; however, lenders will also use their own criteria and policies when assessing an application, not just your credit score. Generating Your Credit Score Day to day actions can have a marked impact on your overall credit score. It’s important to consider some of these more important factors and how they can affect your credit position. 1. Personal Information – certain personal information is taken into account when creating your credit score. Age, length of time employed, time at your current residential address among them – these factors are used to determine risk. 2. Type of credit provider - there may be varying levels of risk associated with approaching a bank, store finance provider, hire purchase and utility companies for credit. Research suggests that there is different levels of risk associated with lenders in particular industries – for example, non-traditional lenders may pose a different level of risk to that of a recognised bank. 3. Size and Type of Credit Sought – Credit limits you may have applied for in the past may have an impact on your credit score. Credit cards, personal loans, mortgages and store based finance options hold different levels of risk. 4. Number of Credit Enquiries – Every application or enquiry you make is added to your credit report, including mortgages, loans and utilities applications. Shopping around for credit may impact negatively on your credit score in a relatively short space of time. The simple process of seeking alternate options can impact greatly on your credit score. 5. Age of Your Credit Report – A relatively new credit file may show a different level of risk to a more established file. 6. Defaults and Court Writs – These can be an indicator of increased risk and negatively impact on your credit score. Files without such judgements can have the opposite effect and generate a more positive score. Until now, many late payments of accounts simply never made it to your personal credit score, this is no longer the case. Every time you default by 5 days or more, your credit file is given a black mark and your credit rating is downgraded. 7. Commercial Address and Title – The length of time you have operated from the same business address is a measure of stability and may have a positive impact on your credit score. If you’re a proprietor or director of a company it’s important to understand the commercial segments of your credit report. Understanding Your Credit Score An individuals credit score is provided as both a number and percentage position in relation to other credit active Australians. Scores are reviewed regularly and updated. They may also be adjusted by other factors such as population and general economic changes. To provide you with a score relative to the rest of the population a ‘risk grade’ is used: · Below Average (Lowest 20%) · Average (21% to 40%) · Good (41% to 60%) · Very Good (61% to 80%) · Excellent (81% to 100%) There are many variables and factors taken into account to produce a ‘credit score’. A ‘good’ score is a relative term as it can only be determined by how the rest of the credit active population is fairing. Where you sit on a percentile basis is probably more important than your actual score at any given point in time as your status fluctuates on the back of many influencing factors. Should a specific event effect and downgrade your score it will likely self-correct within a 12 to 18 month period – providing you maintain stable employment, limit your applications for finance and continue to reside at the same address. What Your Lender Now Knows Here are just a few examples of what the banks will know following the changes to credit scoring and privacy legislation. · Whether repayments have been made on time over a two-year period. · If a repayment of over $150 is more than 60 days late, it will be listed as a default. · The limit on the credit cards for which you have applied. · The type of card for which you have applied. · The date you opened a credit account, the type of account, and when it was closed. · If, because of a default, someone has entered into a new varied arrangement for repayments. What You Should & Shouldn’t Do! Here are a few tips to maintain a good credit rating: · Close any credit facilities you don’t need. · Set up automatic debits to pay your credit card and loans on time. · Contact your lender to renegotiate your repayment terms if necessary. · Check your credit file regularly. · Don’t pay a debt more than five days late. · Don’t shop around for credit cards and store cards when you don’t need them. The significance of the changes to legislation and availability of personal information to lenders is massive. Some lenders will review your credit score to decide whether to even consider an application. Others will take your credit score into consideration but make an assessment on the overall merits and circumstances. What makes it even more confusing is that some lenders do not credit score but the mortgage insurer that they use does, so even though a loan can be approved by a lender, it can be declined by a mortgage insurer. Understanding who does what in relation to your personal credit score is important but not always possible for the average person. Using a competent and experienced broker will give you an advantage. If you have questions about credit scoring or finance in general, contact us today – we are always happy to assist. You will find more information and access to your personal credit reports from both Veda and Dun and Bradstreet.  2014 Federal Budget – The Winners & Losers
Here’s a look at those who gain and those who are likely to feel the pain from this years federal budget. We highlight some of the more significant changes effecting every day Australians in this months issue. Who Are The Winners? Small to Medium Business Cut to the company tax rate of 1.5 per cent from July 1 2015 to 28.5% for companies earning less than $5,000,000 in taxable income. Older Job Seekers A new incentive to encourage business to employ older Australians (aged 50+) who were previously on government benefits for at least six months. Employers will receive up to $10,000 over 24 months in Government assistance. Mothers The Paid Parental Leave Scheme will pay new mothers up to $50,000. Who Are The Losers? Pensioners From 1 July 2025, the age pension qualifying age will start rising by six months every two years, from 67 years to 70 years by 1 July 2035. Age Pension to be increased with CPI rather than the current system linked to wage growth. Mature Age Worker Offset will be abolished from 1 July 2014 rather than being phased out. It will be tougher to qualify for the Commonwealth Seniors Health Card from 1 July 2014 and the Seniors Supplement payment will be abolished. Changes to the deeming rate thresholds from September 2017, meaning more people will be subject to the Centrelink income test. Families From 1 July 2015, the Government will reduce the Family Tax Benefit Part B. Primary earner income reduced from $150,000 to $100,000 per annum. Family Tax Benefit B to be limited to families whose youngest child is younger than six years of age. As a transitional arrangement, families with a youngest child aged six and over on 30 June 2015 will remain eligible for FTB Part B for two years. From 1 July 2015, bulk billed visits to General Practitioners, blood tests and X-Rays will cost the average tax payer $7 per consult. Students The interest rate for HECS and HELP assistance will no longer be set at CPI but instead at the 10 year bond rate (currently around 4%). The minimum wage at which the debt will need to be repaid will also start earlier from 1 July 2016. Deregulating of university education fees likely to see education costs increase. Young Unemployed From 1 January 2015, those claiming Newstart Allowance and Youth Allowance will serve a 6-month waiting period. Increase to the eligibility age for Newstart Allowance and Sickness Allowance from 22 to 24 years of age from 1 January 2015. High Income Earners Temporary budget repair levy – for those earing $180,000 per annum or more, you will get slugged a 2% levy on the amount earned over $180,000. Top marginal tax rate effectively becomes 49% (including Medicare levy). Fringe benefits tax will increase from 47% to 49% from 1 April 2015 until 31 March 2017. If you are currently packaging a car this may impact you. Conclusion… In a recent poll conducted by the Sydney Morning Herald the following results were published – 24% agreed the budget was “Tough but fair”; a whopping 70% decided the budget is “Too hard on the vulnerable” and only 6% chose to abstain from comment. (*) All eyes turn now toward the Senate to see how much of the Abbott/Hockey budget will be accepted. (*) Source – Sydney Morning Herald Online – May 13, 2014. |
AuthorLiz Wilson has been working in finance for twenty two years now. She regularly blogs on industry topics and here you will find over a hundred personally written blog topics and case studies... 
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