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Your Finance Guy

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24.01.2022 FIVE THING I BET YOU DON'T KNOW: 1. The difference between the quoted rate and the comparison rate 2. How your current home loan rate compares with the market. 3. The interest rate on your credit card. 4. Why a 1.00% rate on a car loan is not a good deal.... 5. Fees being charged by your superannuation fund managers. See more

24.01.2022 Interest Rates?....Put simply, the cash rate, currently 0.75%, is set by the RBA and is the price this central bank charges all the other banks, to borrow money overnight, so they can meet their own needs..... These banks in turn add a margin, currently about 3.5%, which they in turn apply to their own loans....Simple enough in theory, but what I don't understand is Credit Card rates................Many years ago, I was paying 12-14% on investor funds, adding a 6% margin and ...lending the funds out on equipment loans at 18-20%, while at the same time, credit card rates were 23%......Here we are today, with investors lucky to get a 1% return, loan rates on equipment at 5.15% (or better) and yet the rate on Credit Cards still hovers around the 20% mark....Argument put forward by the banks is one of charging a rate for risk margin, but that''s one BIG risk margin......Just saying. See more

21.01.2022 Dead car money - Lent a buyer $432,000 in January this year for a new Mercedes S63 AMG Coupe....Sold it today for $288,000............Bargain !!

20.01.2022 As we are now into January 2019, the majority of banks and financiers I deal with are starting to ask for finalised Financial Statements for the year ending 30th June 2017 and 2018, in support of any new credit applications. In some instances, they will consider interim Management Accounts provided the corresponding BAS Statements are also supplied........Its getting harder people, so make time to get your business affairs in order, even if it means having your accountant earn their fees.

19.01.2022 FINANCIER THINKING - PART 2. Historically, financiers used benchmark figures when allocating living expenses to determine your capacity to service the loan payments. However as a result of pressure from the regulators, there has been a move away from these benchmark figures alone and closer scrutiny of your bank statements and similar documents, in order to gain a full picture on your spending habits. The financiers will apply the higher of either the benchmark or the actual living costs to the loan affordability, that is also modified to reflect changes due to where you live, for items such as Council Rates, Rent & Transport. As a result of these changes, you may well find that you appear to have less disposable income, even though your income may have increased......We live in challenging times!

19.01.2022 Promoting business tonight for QLD Small Business week in conjunction with Brisbane North Chamber of Commerce

18.01.2022 Maybe it's the distraction of Christmas, but it never ceases to amaze me how a simple instruction on a loan document, such as "SIGN HERE" can't be followed.

18.01.2022 Last night I gave a quick presentation to members of the Brisbane North Chamber of Commerce on the financial services I can provide.

18.01.2022 Financier logic 101 for Divorced parents - They allocate the child support as an expense against the father, but don't take the same amount as income by the mother......!!

17.01.2022 Pet hate!....Place a call to a client's accountant, get the 3rd degree from the gate keeper at reception....you know, the usual, "Who are you, where are you from, who does it concern, will they know what it's about"?...Answer all, get put through, start the conversation, only to be asked the same questions again....Blahhhh !

16.01.2022 Today's piece of financial advice - No matter how hard up you may be for cash, don't use the alleged services of a pay day lender like Wizard or Nimble....Nothing against their services, but an inquiry on your credit file by such lenders is like a red flag to main stream financiers who will use it as a reason to decline any future applications you may initiate, no matter the reason for the short term cash need......If you need cash, ask a relative or friend.

15.01.2022 Email in-box awash with news the RBA has lowered the Cash Rate to 0.75%.....Starting to run out of options are they?....Borrowers not rushing the doors at 1.00%, so will a drop of 0.25% make any real difference to consumer confidence?...Doubtful at best when the masses need to use a credit card @ 21% just to pay the power bill.

14.01.2022 While property finance is not my thing, I keep coming across more & more "mortgage prisoners" these days. These are people who want to switch home mortgage lenders for a better deal, but can't because under the new affordability calculations being applied by the lenders, they can't afford the loan they are seeking, even though they have been making higher payments on their existing loan without problems for several years from increased earnings since they obtained the original loan......Catch 22 at play !!

13.01.2022 HOW TO BUY YOURSELF A LOWER LOAN RATE As the financiers in the Consumer Loan market start to implement changes to the way they assess new loan applications, one of the elements being taken into account is the Loan to Value Ratio (LVR), which represents the amount being borrowed as a percentage of the cars Recommended Retail Price (RRP). In most instances, borrowers tend to include all the On Road Costs, GST, Financier Charges and Loan Insurances into the new loan amount, wh...ich can results in the LVR on the car going well over the 120% mark. Having taken the LVR into consideration, the financiers will then apply a loan rate that reflects the risks associated with the amount being lent against the car's RRP, hence the higher the LVR, the greater the potential for the loan rate to increase. By way of example, consider the following indicative rates as they might apply to a new car. LVR < 90% = 5.25% LVR > 90% < 110% = 5.75% LVR > 110% - 130% = 6.25% LVR > 130% = 7.25% Now with those numbers in mind, you can see that you have the potential to negotiate a lower loan rate, simply by reducing the LVR by reducing the loan amount, either by trading your old car or using some of your own cash savings. The amount required will naturally differ from car to car, however it can often take as little as $2,000 to bring the LVR on the car you are buying, into a lower rate band which in turn has the potential to save you on interest charges over the term of the new loan ............ Want to know more? Call me 0413 866 957

13.01.2022 Question posed to loan applicant - "Do you have any dependent children as this will impact on your financial capacity to meet the loan payments?" .... to which the reply is "No''......Type name into Facebook.......Oh look, photographs & comments about what a great event the 3rd child's birthday party was.....Some people you just can't help.

12.01.2022 A great example of how I was able to assist a business owner in getting finance for the vehicle and for the canopy

12.01.2022 BE CAREFUL OUT THERE! I was asked to arrange finance on a large machine this week that was listed for sale on a well known used equipment web site. Buyer sent me all that I asked for to put the loan in place and I told him to wait 24 hours while I did my checks, but he didnt listen and paid a $20,000 deposit by bank transfer that the seller was demanding on the pretext of holding the machine. I continued to run my usual checks & balances and discovered the supplier invoice d...etails did not align with my searches. On being told of this, the buyer went and checked the premises himself, only to find it was an empty office in a block of serviced offices, with a centralised answering service. Buyer is now trying to recover his money via his bank, but it looks like he has been the victim of yet another scam. They walk among us, so be careful people. See more

11.01.2022 FINANCIER THINKING PART 3 Being a conservative lot, financiers are starting to tighten up on what sources of income they will and wont take into account. One change has been for rental income from investment properties, which is now being discounted, often to 50%, rather than the full amount being available for loan payments. In some instances, the same discounting level is being applied to income from overtime and shift work. There is also less flexibility on how self-employed income is accounted for and the usual depreciation allowances, all of which is starting to impact on business applications for commercial equipment. ......We live in challenging times, so if you want know more call me.

11.01.2022 Recent figures have revealed that the Australian superannuation industry has extracted more than AU$700 BILLION over the past two decades in fees that are above what a typical super fund charges overseas. Thats equivalent to almost 40% of the nations annual GDP.................Time for another look at where your money is going?

11.01.2022 For those of you struggling with current interest rates, spare a thought for borrowers in Argentina, where the central bank has raised its official cash rate to 60%, in an economy with an annual inflation rate of 25% coupled with a currency thats dropped 45% against the US dollar so far this year.

10.01.2022 Undertook some direct e-mail marketing today only to discover how many grumpy people are out there.....Come on, time to lighten up a little!

10.01.2022 To those who follow...Merry Christmas to you all and thank you for allowing me to assist during the past year.....Mind you, I really should share more interesting information on the financing of "stuff", but for now, the attached is what I achieved this year.

09.01.2022 Thought I had an easy one for a change - Long term employment, clean credit file,home owner with no debt, paying $10K deposit on a $35K car.....What could go wrong?.....Alas, they hold but don't use, 4 x credit cards with total limits @ $60K so financiers allocate 3% of card limits as monthly expenses, hence things started to get interesting.....Challenge resolved, but word of warning people, if you have a C/card with BIG limit, kill it.

09.01.2022 Sanity appears to have prevailed in parliament today (an unusual occurrence) whereby the proposed cap on concessional contribution to superannuation has been lifted from a MAXIMUM of $500,000 per lifetime, to a far more sensible $100,00 per year.

09.01.2022 I am not one to judge, but when a loan applicant says they are claiming & being paid rental assistance from Centerlink but not actually paying rent to anyone as they live with "friends" you have to wonder what's going on.......

08.01.2022 Cost of Car Ownership on YOUR loan: While acknowledging there will be many variables from one vehicle to another, coupled with different driving habits, financiers are starting to take a closer look at the real cost of car ownership, when it comes to assessing the borrowers capacity to repay the intended loan. Although there are, as yet, no fixed matrix numbers, we are starting to see allowances being based off the comprehensive tables produced by the RACQ (and others) on a ...regular basis that allow for the indicative costs of Private ownership of a vehicle travelling 15,000 klms per annum over a 5 year term that take into account Standing Costs (Registration + Insurance + Licence + Membership) and Running Costs (Fuel + Tyres + Services.) With most car loans now running for 5 years, if only from a repayment perspective, heres an example of the Average Monthly Costs for a couple of sample vehicles. Hyundai i30 Active 2.0L Auto 5dr Hatch $373.07 Mazda 6 Sport 2.5L Auto 4dr Sedan $397.64 BMW 318 Sportline 1.5L Turbo Auto Sedan $482.26 Ford Ranger XL 3.2L T/Dsl Auto 4x4 C/Cab $470.42 So whats the point of all this? Next time you apply for loan and I ask what you think it costs to run your car each month, dont take a guess and say its about $100 as I (and the financier) will revert to tables of this sort, unless you can provide a reasonable explanation as to why your figure is different ...... Want to know more? Call me 0413 866 957

08.01.2022 Dear Federal Treasurer...Today, one of my clients was declined for a loan because he will be older than 75 when the loan term ends. He's a truck driver of many years and wants to keep doing some of that "heavy lifting" you keep prattling on about that this country needs......Any chance you can intervene with your friends in the credit market?

07.01.2022 TUESDAY TIP - BUDGETING: How many of you are living according to a budget? As part of the responsible lending process, I am required to ensure that the borrower has the financial capacity to meet their day-to-day living expenses PLUS the cost of the intended new loan payments. With the increase in payments methods for things these days, a closer at bank statements shows that not enough people are living according to a budget, which although considered by many to be a dirty wo...rd, is a powerful tool. Take a closer look at your bank account and see how much you are spending on your coffee each day simply because the tap-n-pay system is so easy to use. If the number was $10 per day, that becomes $50 a week or close to $200 per month which gives you some idea of where you money goes and should, make you start to question what other points of leakage there are that you just dont account for.

07.01.2022 When applying for a loan these days, the financiers will often ask for three months worth of bank statements in order that they can identify your spending habits. In one instance of late, an applicant was asked to provide confirmation that a training course that had been paid for by way of regular deductions had been completed. In another, the borrower, who had allowed for $200 per month in clothing expenses, was asked to prove that an $800 spend via EFTPOS at a major depart...ment store was a one-off purchase. If you know banks will be looking at three months worth of transactions, then start looking at your spending and make conscious choices about whether your purchases will affect your ability to secure a loan. If they will, then consider either deferring your spending or choosing to go without. It will make it so much easier to apply for the loan, knowing you have a spending history that the banks will be happy with rather than having to justify individual purchases that dont match up with what youre declaring as your spending pattern. If nothing else, this will at least force you to evaluate your spending and become a more mindful and conscious spender which in itself is surely of benefit. Contact me if you want to know more about borrowing in the current market See more

05.01.2022 Today I was proud to sponsor an event on behalf of the Brisbane North Chamber of Commerce and hear, along with a few of my clients, Phil Di Bella talk on the 10 Principles of Business Success.

04.01.2022 As the two major political parties appear to be upping the ante ahead of the upcoming election, it appears that LABOR has promised a 20% instant write-off of eligible assets over $20,000, only for the LNP to return fire with a promise to increase the current write-off threshold to $25,000, something it will attempt to get through legislation when Parliament returns this week. As the current arrangement will expire 30th June and we can never be sure of the outcome in the political arena, perhaps its time to review the benefits of the current legislation, identify what new equipment your business needs and call me for a loan to make the purchase.

04.01.2022 Commonwealth Bank CEO, Matt Comyn admitted to the banking royal commission yesterday that the bank had sold credit card insurance to over 64,000 customers who were ineligible for the insurance due to being unemployed......Maybe they should all do some of their own compliance training that gets foisted on we finance brokers every 3 months......Just a thought!

03.01.2022 Just an observation .... Car finance has dropped by up to 50 per cent, application approval times have more than doubled, new-vehicle sales are down eight per cent on 12 months ago and we are being forced to use less reputable lenders at much higher interest rates, for borrowers who fail to meet the new lending guidelines, that in many instances are being set by their existing financier. Lenders are insisting on greater levels of scrutiny being applied to applications and the... finance companies are insisting on a stricter verification processes for income and living expenses. Buyers are holding back, evidenced by sales as at July this year, being down 15.8 per cent for passenger cars and 3.6 per cent for SUVs a drop of 47,452 vehicles combined The flow-on effect is seeing a slow-down in used-car sales due to the reduction in trade-ins that usually come with a new vehicle purchase.

02.01.2022 Courtesy of the recent Commission of Enquiry into the finance sector, new regulatory changes to the way Credit Card repayments are calculated will take effect from Monday 1st July 2019. The regulation states lenders must assess a customers ability to repay a credit card limit in full (including interest) over a 3 year term. While there may be some minor variations from one financier to another together with a difference in actual card rates, it appears a common rate of 3.80% will be applied against the card limit, in order to determine monthly payments. By way of example, if you have a card with a limit of $5,000, the repayment applied against your loan application will be $5,000 x 3.8% = $190 per month......Its starting to get interesting people!

01.01.2022 TUESDAY TIP - AFTERPAY As I gather financial history off bank statements, I am starting to see a growth in the use of Afterpay, which is nothing more than an electronic lay-buy system. The idea behind this service is that you take possession of the goods today, and agree to make 4 equal payments every 2 weeks by way of a direct debit. However, if you miss one payment on an item that costs less than $40, you pay an extra late fee of $10, which is an interest rate @ 25%. On la...rger cost items, the fee is capped at $68, which is still a big hit on an item that may have only cost you $200. The point here is that these payments are starting to be taken into account by lenders and may impact on your capacity to service any new loan. Although it currently appears that only 5% of instalments incur a late fee, some 22% of users have paid the fee and the number appears to be growing, as is the company share price, which probably tells you all you really know. ...............Want to know more, call me 0413 866 957

01.01.2022 Yet another update from my panel of financiers, declaring a drop in loan rates, however it's NOT their pricing that's the problem, but rather their profiling and risk parameters that are stopping the loans being approved.

01.01.2022 Heres a friendly reminder to all who used the services of Afterpay over the festive season. REMEMBER, you signed up to make 4 equal payments due every 2 weeks by direct debit against your debit or credit card. Miss one of those payments on an item that cost less than $40 and you will be charged a late fee of $10, which is a simple interest rate of 25%. If the item cost you more than $40, the same interest rate is applied, but (currently) capped at $68. While figures to date show only 5% of due payments have been incurring a late fee, the next few months could prove interesting.