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Q: Hi, my daughter has an Afterpay account and is always coming home with new purchases. Can someone please explain what Afterpay is and what the risks are – should we be concerned?
Thank you
A: Hi Cheryl,
On its own, Afterpay isn’t a problem. The customer gets to take the product or use a service and then pays 4 fortnightly payments to pay off the purchase.
Where the trap starts is that the customer “learns” that it is ok to buy things that you don’t have money for today and in many cases leads to credit cards and personal loans or even payday loans
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Q: What is the primary measure used for asset valuation on the statement of financial position? What is the source of this measure and justification for its use?
A: Hi Pip,
I’m not an accountant but I believe that “written down value” or “book value” which is the acquisition cost less accumulated depreciation is the most commonly used
It should represent its potential value if sold in a normal operating market
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Q: CBA and Westpac have announced cuts to their fixed rate home loan options, is know a good time for borrowers to be looking at fixed rates?
A: Whilst both CBA and Westpac are still higher than their competitors, I wouldn’t be fixing with them. If you like the certainty and peace of mind is important then by all means fix a large percentage of your loan with a competitive rate product that suits your needs
Generally staying variable appears to be the better option in the current environment
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Q: I’m think of buying a commercial property using our SMSF and then leasing the property through my business. We operate as a sole trader is this possible or would the lease need to be in a company name?
A: Hi Jarrod,
What you are proposing fits within the rules of SMSF, it is acceptable to lease a commercial premises to a related party.
Under your SMSF, your adviser will need to go through the advice and the resolutions to ensure that the purchase meets the purpose and the strategy of the SMSF.
It is also possible to borrow a portion of the funds if required subject to normal lending policy and criteria
Please feel free to ask any further questions you may have
Kind regards
Scott
0435.474.498
Scott.howell@mobilelender.com.au
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Q: Business has been in our family for 20 years, I took over from parent 5 years ago and we know want to sell. Does anyone know a good business broker to help with the sale?
A: A company I have dealt with is Xcllusive Business Sales. They have offices in Sydney and Melbourne. I’ve worked with Denise Hall in Melbourne office and can highly recommend her
Best of luck
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Q: I would like to ask about a meeting my parents had with their financial advisor where it was suggested they should look at putting their money into investment bonds instead of super – they are in the mid 50’s and working full time. Is this a wise strategy?
A: Hi Nicholas,
I don’t know what is right or wrong for your parents but if you are unsure of why he has recommended something, go back and discuss it further.
You, and your parents should understand the strategy and the reasoning before they act
Best of luck
Scott
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Q: Hi, we were at an auction on Saturday and we have been notified the successful bidder is not going ahead and the agent has contacted us as the under bidder and wants to negotiate a higher price. The property was for sale and we went to our max at the auction and would like to know legal why our offer can’t be accepted?
A: Hi Diane,
It is their job to negotiate the highest possible price for their client, the vendor.
It is up to you to decide what a property is worth and what you can afford to pay.
I would stick to my price and not offer any more.
Best of luck
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Q: Hi, I’m looking at buying a restaurant and have looked at a couple within reasonable proximity to home. I’m a qualified chef but having a difficult time trusting the financial and information the business brokers are providing. Is there a proven strategy on how I may be able to get the true picture on how the business is performing, thank you
A: Hi Michael,
A healthy level of scepticism is a good thing at this time. Speak to your accountant and ask him what percentage of his food clients make over $100,000 per year profit.
I’d be expecting “not many”
Tread carefully and good luck
Cheers
Scott
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Q: Our fixed rate is nearing the end and we have been offered 4% for a 3 year fixed interest only. Should we take it or other there better options?
A: Hi Jamie,
That’s a decent rate for interest only, I’m assuming it is an investment loan?
There are very few rates lower than that for investment interest only at any LVR
Cheers
Scott
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Q: My wife and I are both PAYG employee in the same job for 5 plus years each. Our home loan is with CBA and the rate is 4.39% - loan is $720,000, could we get a better rate and by how much
A: Hi Peter,
As Michael said, there are plenty of options that are well under 4% for owner occupied loans.
There are other variables such as your income and expenses, any other debts and the loan to valuation ratio (LVR).
Perhaps your first step is to meet with an experienced broker and see how your finances stack up and structure your loan to meet both current and future objectives
Best of luck
Scott
0435.474.498
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Q: Hi, my husband runs an engineering business and I help out with the books. Recent he won 2 contracts where the clients are paying in three installments and the additional work means extra staff and pressure on cashflow. Can we obtain short term finance now we have the contracts in place?
A: Hi Jill,
There are definitely lots of options for cash flow and invoice finance. It will depend on a number of factors including how long the company has been operating etc.
I would recommend speaking to an experienced business finance broker.
If you have any other questions please feel free to ask
Regards
Scott
0435.474.498
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Q: Hi, I am a physio and being running my own practice for 5 years and need to upgrade some of our equipment and need to borrow about $60,000. Which lenders should I start making enquiries with?
A: Hi Ben,
Speaking with a broker first would be my advice. Yes, I am biased of course.
Whilst it would be quicker to go to your regular lender, achieving the best structure and a competitive rate will be worth it long term
Cheers
Scott
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Q: A number of mates are property developers in around Sydney. We have over the next couple of years up to 100 house and land packages coming onto the market and hoping we can steer customers towards a lender/lenders/brokers to obtain finance and we can sell the properties. We don’t want to be involved in the finance but with the Royal Commission, banks and brokers issues, we’d like to get some advice on who we should talk to. Is it now just the majors are there any nonbanks who will look at house and land packages or is it mortgage brokers?
A: Hi Matt,
I believe that the challenge that you may have around Sydney is simply valuations. Particularly apartments.
Every lender is still open for business and if the client can afford the property and meet policy criteria they are still being approved everyday.
If however, the borrower has $200,000 deposit for a $1,000,000 purchase and the bank values the property at $850,000 then they are less likely to be able to buy the property.
I am a broker in Melbourne and have clients all over the country
Cheers
Scott
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Q: I have just started working from home and want to know what I can claim through the business. We don’t owe any money on the house, does that matter and can I now claim travel expenses to visit clients?
A: Hi Marnie,
You can claim all reasonable expenses incurred in the earning of income for your business.
The most reliable place to understand what you can and can’t claim is either the ATO website or your accountant.
A mortgage on a house has never been claimable.
In most cases, the cost of travel from your office (including a home office) to a client is claimable.
Definitely get professional advice before making any claims
Regards
Scott
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Q: Hi,
I heard an ad on the radio today about buying property in Brisbane if you want to help your children. We are thinking of helping our eldest get into the market and we will have to look outside Sydney, is Brisbane the right place, what other places do people suggest. Our budget would be up to $700,000 with our son owning around 25%?
A: Hi Geoff,
There are hundreds and hundreds of property companies who are desperate to sell Sydney and Melbourne buyers property in other states.
The risk is that you buy a property that sounds cheap by Sydney standards but is actually inflated in Brisbane. You can buy a 4 bedroom home within 20kms of the CBD for $350,000.
The main protection is to ensure that you have an independent valuation conducted on the property prior to committing. If a bank values an established property, you can expect that it will be close to market price. If it is a newly built property, it will get valued about 4-5% lower than contract because of the GST component that the builder has to pay
Best of luck with your search
Cheers
Scott
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Q: There is a lot of talk about rates in the media and I would like to ask how people think the election will impact rates for the next 12 months?
A: Hi Jackson,
There are so many proposals being thrown around it is hard to imagine how interest rates may be affected.
Just my opinion, if retail sales remain soft and property in metro Sydney continues to stagnate the only likely move is down.
International Events will probably have a bigger effect on our interest rates than the election
I would suggest that you don’t try to guess what will happen with rates and ensure that any strategy you employ is fundamentally sound and taken with a long term view
Best of luck
Scott
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Q: I play soccer for a local club and get paid some money if my name is on the Team Sheet for season games. I have provided the club with a Statemtent by a Supplier and ticked private recreational pursuit and hobby as my selection. The club has sought permission from me for them to create a RCTI so that they can claim GST credits. Is this okay?
A: Hi Carmel,
I don’t think that is correct. I’m sure a couple of the accountants on here will clarify
Good luck
Scott
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Q: Hi,
I have 2 negative geared investment properties and not doing a very good job in understanding the policy changes the Labour Party is suggesting to negative gearing. Is someone able explain in basic terms what their policy is and how it would impact my investments? thank you
A: Understanding the changes is one thing as described by Brendan and Anurag. How will affect you? Not at all.
Other than the potential to change the value of your property due to less investors being interested in established properties
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Q: How will the findings of the royal commission affect everyone?
A: Hi Stephen,
There was already a strong indication that trail commissions in Mortgage Broking would be banned. I believe that the reason for doing so is flawed, however it is going to happen and we will have to be prepared for it.
It will definitely affect my ability to continue to employ staff but we have over a year to meet that challenge.
For the introduction of “fee for service” there is a long way to go and hopefully a very large amount of consultation to be undertaken.
On the surface. it will deter marginal borrowers from using brokers and could lead to poorer outcomes for people not given education and choice as well as reducing competition currently provided by non-bank lenders and regional banks
Time to work even harder to grow mortgage broker market share and prove the value proposition to everyone in our communities and governments alike
Cheers
Scott
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Q: I have been working in the car industry for 8 months and my base salary is $45k and so far the average commissions are $5k a month. Should my employer being paying super on the base salary or base plus commission?
A: Hi Tony,
I’m not qualified to answer this so it is just my understanding. Your employer should be paying Super on all of your earnings.
On the Base salary they are required to add 9.5% Super (unless your contract specifically states total remuneration package) and on the commission they can either include Super as part of the total or add it on. This should also be covered in your agreement or contract.
That would be the first place to look and then if you are unsure, speak to your employer directly first and contact your industry body or FairWork if you aren’t happy with the answer
Best of luck
Scott
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Q: Hi, we need some advice.
One of our staff is never happy and continuously brings down the mood within the business and with a small team of 10, it’s very frustrating. The business is going well but it could be so much better and we are really worried about losing other staff because of the negativity. What is our best course of action, we don’t want to wait until it is too late?
A: Hi Christine,
I would suggest you engage an HR specialist who can review your position, check where you are up to and set up the systems that would allow you to take decisive action.
If you don’t have standard policies and workplace agreements in place, you are going to have to have an initial discussion about what behaviour you would like to see and how this person is missing your targets.
It can be a long slow process if you don’t have the policies and procedures in place from the start.
Best of luck
Scott
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Q: We have been informed NAB will be increasing the rate on our home loan by 0.16%, which is very disappointing. Our loan is $780,000 and the rate will now be 4.15% - should we be looking to refinance or is NAB just the first and the other banks will be increasing their rates soon? What is the best rate we could get if we did refinance?
A: Hi Henry,
There are better rates than 4.15% available in the market at the moment. I would suggest sitting with a broker so you can be assessed and compare the cost of switching with the savings you could potentially make to decide which loan is the most suitable.
If a loan is not suitable, it can cost you thousands of dollars so be careful to consider all features and costs not just rate
Best of luck
Scott
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Q: Hi there
We have a fixed rate loan of $620,000 that matures in Nov this year. We want to do about $150,000 in renovations and would like to refinance their existing loan and borrow the extra. Home would be valued about $950,000. Is this posisblea nd would there be any fees to break the fixed loan. What rate could we get?
A: Hi Lesley,
Your ability to borrow the $150,000 will be based on the potential future value of the home and your capacity to repay the loan according to whomever you bank with.
If you meet the criteria to borrow with your current lender then there wouldn’t be any need to break the fixed loan, you would simply add on an extra loan against the home.
If you do need to use another lender to qualify, the break costs could be anywhere between $500 and $5,000 depending on the terms of your current loan. It is unlikely in the current environment that you would face a big break fee with rates very low across the market. Just give your bank a call and ask.
Best of luck with the renovations
Regards
Scott
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Q: I am a self-funded retiree with a share portfolio of $300,000 with a high proportion of bank shares. I feel as though they will continue to be strong but would like to ask if others think the same?
A: I agree with Todd, and I too am not qualified to make a judgement.
I think that a ‘worst case’ scenario has been priced in already and selling would just be capitalising losses and missing out on the high dividend yield available.
Get professional advice before making these sort of decisions
Best of luck
Scott
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Q: Does an employer have to pay superannuation on top of bonuses or can they pay it out of the bonus?
A: It depends how the bonus conditions are written. It is quite common to pay it as “inclusive”
Speak with someone in your payroll or get out your bonus agreement
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Q: Hi, I want to buy a property and it will probably need to be an investment property. I’m 33, first home buyer, single, no kids, a $2000 credit card limit and no other debts. I have been in the same job for 3 years and saved $30,000 living at home.
Income is $98,000 plus super. How much can I borrow and does anyone have any suggestions as to where I should buy?
A: Hi Leah,
Great to hear you are considering investing or owning your own property. All of those factors are positive for purchasing a property with two main challenges. If you purchase an owner occupied property you could buy around $600k and pay little or no stamp duty. You would have 5% deposit which is very tight and would involve Lenders Mortgage Insurance.
If you were to buy an investment property you would have the extra income from rent but you would then incur full stamp duty and you would be left with no deposit and a 100% loan which can only be done with another security provided (usually by parents).
In terms of where to buy, I would try to avoid buying a one bedroom apartment as there are just too many of them. You might get a bargain but it is unlikely to rise in value with so many more being built. If it is possible to find a townhouse or unit for that price where you might like to live that would be great.
Loads and loads of considerations that I believe you would be best to discuss with a trusted experienced broker and accountant.
Best of luck with your goals
Regards
Scott
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Q: Hi, I was made redundant on 21 Dec and was expecting the final payout to be provided in the next pay run a fortnight later. The company then went into Voluntary Administration on 24 Dec and all remaining employees were sent a termination letter on that very day.
My question here is, do I stand in the same priority line as the terminated employees when the Administrator disburses any remaining funds? Am I one step down the line because the Administrator is not responsible for me? Or is this something I CAN take up with Fairwork and claim my rights?
A: Hi Charissa,
I’m not sure of the legal side. In Victoria, there is a fund that can pay out employee entitlements that are lost when a company folds. I would check if there is a similar fund in QLD and apply for your money through that.
As for where you stand as a “creditor” I don’t know the answer but I’m sure one of the gurus on here will be able to.
Best of luck
Scott
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Q: I am going to work as a contractor and charging $40 an hourly rate. Do I include gst in this amount of do i add the gst on?
A: Hi Trudi
This is a really important thing to get right. If you don’t mention GST then your price is legally required to be inclusive.
It probably depends who your clients will be. If they are mostly consumers I would quote $44 per hour if they are businesses, I would quote $40 plus GST. Same end result just a different perception
Good luck with the venture
Regards
Scott
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Q: We have been researching websites like RateCity and Finder where they saw home loan rates can be as low as 3.44%. Our rate is 3.99% and we contacted our broker and they said because we have only had the loan for a year we shouldn’t refinance. They said we could refinance but it would cost them money if we did and we would have to pay the fees on their behalf. Is this normal for brokers?
A: Hi Aleisha,
As Jacqui said, this shouldn’t happen.
First part, the bank will “clawback” some or all of the broker commission if you refinance within the first two years. This happens with all lenders so that brokers don’t keep churning loans.
Some brokers have previously written into their client agreements that if this happens, the client reimburses the fee to the broker so that the broker hasn’t done all of their work for nothing. This will be stopped from January 1st.
The customer has the right to change to a more suitable loan whenever they would like and the broker should be assisting them to do that research and help them through the process.
In our business, it is our responsibility to ensure that the customer is always given the information and the opportunity to change to a more suitable loan and we NEVER charge a client for any service
I hope that helps
Regards
Scott
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Q: Hi
I have purchased a computer and other equipment of substantial value for use in a business that I'm about to start. However I have not registered a LLC or other yet. Is it possible to still claim these purchases if the tax invoices have been made out in my name?
A: Hi Marcus,
I believe that there are ways around it. Definitely keep all of your receipts. Your accountant will sort it when you are setting up the company.
Best of luck
Scott
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Q: Hi, I would like to ask a question about buying a franchise/licence. The parent company is not calling it a franchise (just a licence) but the agreement looks and feels like a franchise and we have to commit to KPI’s and a 3 year term. If it is just a licence agreement does that mean the parent company is required to pay tax on our behalf or is that our responsibility – thank you?
A: Hi Tim,
I agree with Todd, you are definitely the only person responsible for the tax obligations of your business.
In regards to a franchise or licence agreement they are legally the same thing really. There will be stipulated rights and responsibilities and a fee to be paid for the privilege.
Definitely get a lawyer to look over the contract. Whilst there may be nothing that you can change, it is still important to understand each clause and condition and what impact or consequence each one has on you now and into the future. These would include succession and sale of the business as well because you want to know how to exit very clearly before you make the commitment to join the group
Best of luck
Scott
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Q: Hello everyone. I'm a first homebuyer looking into buying an apartment before this year ends. I have requested a section 32 and contract of sale from the vendors of 2 apartments. I'm more interested with the 2-BR unit and would like to put an offer (although it is below the selling price). Do I need a conveyancer to review both contracts for the 2 apartments, or is it OK to put an informal offer for the first one, and if the vendor agrees, I'd have a conveyancer review the contract before I formally sign it?
A: Hi Fae,
I would start with your bank, check whether the postcode or building type and size have any lending restrictions. Then when you know their maximum Loan to Valuation ratio (LVR) check that you meet their serviceability criteria.
I would suggest that if you think that there is any doubt or uncertainty that you write any offer “subject to finance with xyz bank”
Best of luck with the property search
Regards
Scott
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Q: Hi,
We have a family business and the accountant has it set up that my income is $40k more than my wife’s. We are looking to buy an investment property and also been advised to buy the property in my wife’s name. Does this sound like good advice and can we get a loan if the loan by using my wife’s name and will they look at both our income and the business profits?
A: Hi Marcus,
From a lending perspective, you can both be on the loan even if only your wife is on the title. You have to show how the property can provide a benefit for the non-titled borrower
Speak with your broker and accountant together if you can
Cheers
Scott
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Q: We want to buy a property in Port Macquarie with a view to relocate and retire in 5 or so years. Can we purchase the property through our SMSF, borrow money and then pay it off when we make the move?
A: Hi Luke,
Run the numbers, I would expect that there would be a better way to do this financially and also legally. The costs to do this inside an SMSF and then transfer to yourself again, would likely outweigh the growth in property prices in PM over the next 5 years anyway.
If you are 60 or older, you could investigate starting a transition to retirement strategy that gives you the income needed to borrow the money in your own name and then sell your current home to cover the remaining debt when you relocate.
Speak with a fully qualified accountant and adviser and don’t expect that you can play with the rules, it’s a massive risk.
Best of luck
Scott
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Q: There’s a lot of noise coming out of the Banking Royal Commission about mortgage brokers, the commissions they receive and their ongoing trailing income.
We’d like to ask, if as some are suggesting the mortgage broker model is changed to pay for service and abandoning trailing income what impact would it have on consumers in terms of home loan competition, interest rates, service levels, convenience and the cost for them to obtain a home loan ?
What impact would it have on the overall home loan industry?
A: If I had a crystal ball 🔮
I can only imagine that the Big4 would continue their current standard of care and interest rate margins would return to where they were before the broking revolution started by Aussie John.
Banks, the ABA and the Big4 basically commissioned the Murray inquiry and the Sedegwick report on behalf of their own interests to wrest back control of the mortgage market. If they manage to get their way, the consumer will be the biggest loser
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Q: Hello, my wife and I have been discussing buying a unit off the plan close to Sydney CBD. The loan have been approved but with the talk about the labour party negative gearing policy is now a good time to buying off the plan or should we look to a place like Newcastle or other regional areas and buying an existing home. Thank you
A: Hi Matthew,
Some great input from some very intelligent people in here for you.
My two cents worth, it’s just my opinion so again not trying to provide advice as I know nothing about your position or strategy, is to consider the type of property and the potential investment performance of each one.
Property investment is a growth game. The longer you are in it the better the chance of achieving growth so negative gearing shouldn’t be a major part of your buying strategy. Remember that you could “lose” money via negative gearing and depreciation and still get a CGT bill when you sell too
1. If lenders value this property 20% lower than my contract price can I still settle the purchase on completion
2. If I can’t rent the property can I afford no rent plus outgoings for a prolonged period
3. Is there scarcity in the product I am buying that will underpin demand for tenants and growth
4. When it comes time to sell, who will buy my property
Just a couple of thought starters
Best of luck with the purchase
Regards
Scott
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Q: Are there lenders happy to lend money for a start-up business.?
We have a detailed business plan available and want to borrow $40,000 – no security
A: Hi Margie,
Happy to? Probably not so much. Are there options, yes there are some. It depends on your whole financial position and what sort of risk the bank or lender would be taking
Probably best to speak to a business banking broker specialist
Best of luck
Scott
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Q: I have just set up my own business and want to ask about super. I’m a sole trader and just starting out so do I have to make super contributions based on the income I earn or can I wait until the business is making more money
A: Hi Dale,
Congratulations and good luck with the new venture. The answer depends on how you will take money out of the business. If you pay yourself a wage, then you do have to pay yourself Super according to normal rules.
Cheers
Scott
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Q: Hi, I finished up with my employer of 18 years yesterday and have a good sum of money to invest. What options are there to get a reasonable return instead of the money sitting the in the bank?
A: Hi Matt,
I guess it depends on your whole financial position, your life stage and your goals and expectations for your future.
If you have a mortgage you can immediately earn 4% tax free by putting into the loan or an Offset account.
If you don’t, then the options range from High Interest Savers accounts at the safe end through to speculative investments at the other.
I would suggest sitting with a financial adviser would be beneficial and worth any upfront fee you need to pay.
Best of luck
Scott
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Q: Hi,
I have a SMSF and finding it difficult to maintain it time wise. Is it possible to unwind and what do I need to do?
Thanks
A: Hi Jonah,
It certainly can be unwound, there are plenty of boxes to tick though. You will need to do this with an accountant or planner
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Q: Hi,
Are there any lenders that will look at 6 units on the one title?
Property is in Abbotsford and but we keep being told the maximum number of units is 4 – the refinance is about 65% of the value of the property. Any advice?
A: Hi Seb,
There definitely are lenders that will look at a 6 unit site. They aren’t likely to be household names. I have clients doing developments of 10, 29, 5 and 3 at the moment in Melbourne.
Are they already completed and sub-divided?
The valuation will likely be a key factor
Let me know if you would like to discuss further?
Kind regards
Scott
Scott.howellamobilelender.com.au
0435.474.498
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Q: About to sign commercial lease for the first time. The owner is offering 3 months rent free and the fit out which is about $25,000.... 3 x 3 years . They want a make do clause after the 3 years which we don’t understand.... is this normal?
A: Hi Phillipe,
I worked in the fast food industry for many years and the “make good” clause was a part of most of the leases that we held or that we entered into. It is a protection for the landlord that you remove any rubbish, restore the integrity of floors, walls and ceilings where you have installed equipment or other items and generally leave the space as a lettable asset in the same way it was leased to you.
I am sure that there are a couple of much more qualified people on here than me that can give you some more specific guidance.
Best of luck with the new venture
Regards
Scott
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Q: My wife and I work full time ..have a 3 year old in child care. We have $100,000 deposit from an inheritance from overseas and want to buy a home. My salary is $78,000 and my wife is a contractor and earns about $60,000. How much could we borrow?
A: Hi Gurinder,
There are way too many variables to give you an indication of your borrowing capacity and many regulations that must be adhered to in assessing a loan product to be suitable for you.
I would recommend you go and speak with a broker and provide them all of your information so that they can give you a strong indication of what you might be able to borrow. Anything less than that is just guesswork.
Best of luck
Scott
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Q: Hi, we are about to engage a builder for renovations and the quote has come in at $600,000. The builder is buying the materials on our behalf and we assume paying GST on the costs so if we breakdown the quotes should we then be paying further GST based on the builders overall quote?
A: Hi Tony,
The average builder either doesn’t understand GST or pretends not to so that they can charge you more. In theory, if they pay $220 for timber, there is $20 GST and the cost is $200. This cost should be passed on to you and when he adds $100 labour he charges $300 plus GST or $330.
He then claims the $20 input credit and sends the ATO $10
Just a silly question, have you considered a knockdown rebuild? Often when the quote is $600k the final cost becomes $750k and you may have been able to build a brand new home for $680k - just food to thought.
Cheers
Scott
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Q: Hi - I have been contracting for 4 years and just been using a business name and ABN. My income is now consistently $12-13,000 a month and wondering whether it’s time to set it up under a company – what would be the benefits to do so?
A: Hi Mel,
I would definitely speak to an accountant who would review all of your financial position and be able to guide you with a more informed view.
My understanding is that using a structure such as a discretionary trust may provide you options to defer tax on earnings or choose how to distribute profits, that you don’t get when you are a sole trader.
Best of luck with everything
Regards
Scott
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Q: Hi i had been working for an employer for 12 months and they did not oay super my question is if they were to pay what was owed do i have the right to ask for it in cash so i can oay it into my fund personally or do they just have to pay into a nominated fund i am not confident they will pay unless i ask fir cash but im unsure if i can ask legally for it in cash thankyou
A: Hi Nathan,
My understanding is that they would be legally required to pay it into a complying fund.
If you have trouble getting them to make the payment, you can report the non-payment. It would be preferable to give them the chance to pay it but they would likely have other employees in the same position as well.
Speak with your accountant and maybe ask them to send a nicely worded letter on your behalf.
“We have just reviewed our clients Super account for 2017/18 and have found that there have been no payments between X and Y dates. We would appreciate you making a payment of $ABC to our clients account within the next 14 days”. The accountants letterhead might get them moving.
Best of luck
Scott
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Q: We are on a variable rate loan at 3.82 and thinking about fixing all of part of the loan for 2 or 3 years. Is now a good time and what are the best fixed rates at the moment?
A: Good morning Mitch,
This is the big question flying around at the moment. The only true answer is “who knows”.
The reason for people to fix a loan is to take away the uncertainty and to protect against the likelihood of interest rates increasing during that fixed period.
My 2 cents worth is that I do expect rates will be about 0.50% to 1% higher in three years time. When will that happen, will it actually happen?
The things to consider are -
Do I anticipate changes to my personal circumstances in the next three years
What level of interest rates would cause my family stress
How fast are we currently paying down our loan
What features of our home loan do we currently use or would we need to use in the coming 3 years
If you would like to have a discussion please feel free to get in contact at any time
Regards
Scott
0435.474.498
Scott.howellamobilelender.com.au
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Q: Home Loan $523,000
Rate – 4.17%
My income – 97k plus super
My wife’s income – 102k plus super
Credit card limit $3k
2 kids 9 and 7
No other loans or debts and we have been in the same job for over 3 years
What is the best rate we could get by refinancing?
A: Hi Patrick,
With general information only, it may be possible to get a loan that would save you a significant amount. It would be subject to the LVR, the property type and location, your living expenses and your credit history among other qualifications.
The sharpest rates are in the 3.50% region for a no frills, non-bank lender that may or may not suit your overall short and long term needs.
Happy to answer any questions that you may have
Regards
Scott
0435.474.498
Scott.howellamobilelender.com.au
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Q: Hi
2 years ago we started a new business and spent about $300,000 so far. It’s not working out as well as we hoped and now thinking about closing it down and getting a job – the question we have is about the losses we have in business… can they be offset against the future income when we find employment?
A: Hi Sam,
The short answer is no! You can’t offset a company loss against PAYG income. I found myself in the same position 10 years ago and I maintained the company and the accounting of it until I started my current business 4 years ago. I am (slowly) offsetting both the trading losses and the capital losses against current income.
Best of luck with the new chapter.
Regards
Scott
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Q: I’m 46 and been in sales and business development for 20 years. I have had an idea in my mind for many years and would love the freedom of running my own business but the fear factor and financial commitments have always held me back. I’d like to ask other people’s opinion on how they took the first step, how hard they found it – the good and bad, thanks?
A: Wow Peter,
This is the best time in the history of business to be your own boss! I’m into my second business. The first one cost me half a mil and I went back and worked for employers for 8 years before starting this one.
I am very fortunate to have been in a very strong position at the beginning and have a very supportive and understanding wife.
Do your research, there are some business killers that you won’t be able to control and hundreds that you can. There are some great tools on moneysmart.gov.au for small businesses.
Be sure that the product/service you want to exploit has a growing market and be committed to making sure you offer it in a uniquely personal way. People don’t buy things, they buy feelings and they buy from people they trust or someone a good friend trusts and refers to them.
As Anurag said, it is year three for me too and it was only around March this year that I started getting people calling me every week instead of me having to make 50 calls per week to find new leads.
Stay the course, listen to coaches, professionals and experts and never underestimate the “Brand You” effect. Don’t forget to come back and launch to us when you are up and running!
Best of luck
Scott
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Q: Hello, my wife and I are in our late 60’s and have 600,000 in our self-managed superfund. We have 2 kids in their 30’s who are struggling to buy a home we would like to ask if it was possible for us to distribute the funds a gift so they could buy their first home?
A: Hi Peter,
I’m not an accountant or advisor but my understanding is that it is technically possible. You will need to see a professional to discuss the detail and the implications of your choices
You could try Rob Rich at Endorphin Wealth or James Wrigley who is on this forum for some quality assistance
Best of luck
Scott
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Q: Hi,
A year ago I started a new job and needed a car, my employer suggested a novated lease. I was made redundant last week and now they are saying the car is in my name so I have to keep making the repayments. Is this right… what are my options?
A: Hi Mel,
That is what Novated means, you own the car and as long as you work for the employer they will pay the monthly lease.
This isn’t understood by too many employees and a lot come unstuck.
Employers like them for exactly this reason, they aren’t locked in and it isn’t on their balance sheet as a debt.
I would suggest that you contact the leasing company and see where the balance is up to. You may be ahead due to underspending that could give you a month or two respite while you look for a job.
I wish you the very best
Regards
Scott
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Q: Purchased my first investment property in St Kilda and looking for an agent to manage the property. Any recommendations and what should their fee be?
A: Hi Nick,
I can second Pathway Asset Management. The co-owner Anna is fantastic
I’m sure they are around 8% but as Brendan has pointed out you will get the service you deserve in the end.
A well chosen tenant from an experienced caring manager is worth the extra couple of bucks a month
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Q: My family just inherited a large sum of money and i know we don't pay tax in the inheritance but if we invest in managed funds do we pay tax on the returns we get?
A: Hi Joseph,
Tax will be payable on all earnings. I would suggest you all speak to an accountant about how to structure the holding of the money and perhaps a financial planner to work on how best to invest the money if you aren’t going to split up the funds
Best of luck with it
Regards
Scott
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Q: How do banks assess income from bank share dividends? Is an averaged out income of $200/week from dividends considered the same as $200/week of income from a job?
A: Hi PJ,
If you can demonstrate the share income over 2 years using tax returns it can be used the same way as PAYG income with most lenders
If it is less than two full financial years it may only be accepted at the deeming rate for interest income.
All lenders will have slightly different policies
Cheers
Scott
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Q: Currently looking at a couple of commercial properties as an investment and want to know if the contracts have to say if the sale price is inclusive or exclusive of GST ..... do we also have to register for GST?
A: Hi Ben,
I’m not the expert but I believe that they must be inclusive unless it expressly states otherwise.
Yes, you will need to be registered for GST
Best regards
Scott
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Q: About to complete our first development of 4 units and so far have sold three and thinking of keeping one. Our question is do we have to pay CGT on the unit we keep… how does it work?
A: Hi Leo,
As James has said you would only pay CGT if you sell. A lot depends on the structure of the entity that developed the block. If you need to transfer the property between entities or to an individual director then a sale has taken place.
Definitely talk to your accountant and get the ducks in a row, it may save you thousands
Cheers
Scott
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Q: Attending my first auction tomorrow as loan approval came through yesterday. Does anyone have any words of advice or tips on bidding?
A: Hi Tim,
The loan approval is great, good on you for being organised. The tough part at Auctions is they are unconditional at the drop of the hammer (and 72 hours either side).
You have hopefully attended 15-20 auctions over the last few weeks and months so you know how they work. I would suggest to just be open and upfront. If you want to buy the property and you know what you would pay then bid early and bid confidently up to around 5% less that your expected price and then stop and ask the agent “is the property on the market”. If it is, you need to bid. If it isn’t, then you can hold your cards until they say they will pass it in and you then decide if you want the chance to negotiate further.
This is a really general overview but hopefully it makes some sense.
Don’t let excitement take you past your limit, there are always more properties
Best of luck
Scott
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Q: Hi
I work full time as digital marketer and do some freelance work after hours. My work salary is $78,000 so do I need an ABN and register for GST for my own work?
A: Hi Jamie,
You wouldn’t “have to” register for GST unless you expected to charge over $75,000 per year in the business.
It may suit you to be registered but that would be a question for your accountant who knows and understands all of your circumstances.
Cheers
Scott
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Q: First home buyers, my income is 92,000 and my wife 85,000 and we have been living the same property for 3 years and never missed paying the rent. We have saved 35,000…. have no debts and pay off our credit card each month. Can we get a loan and roughly how much could we borrow?
A: Hi Peter,
That’s great to hear, I wish you all the best for your home purchase.
In order that I could assess your current position and give you an accurate appraisal of your borrowing capacity I would like to meet with you and your wife to collect your information and answer any questions you may have, all with no obligation to use me and at no charge.
I can be contacted on 0435.474.498 at any time
Best regards
Scott
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Q: Hello,
I’m 48 and a late starter to superannuation and I have been thinking about salary sacrificing into my superannuation account.? Is it a good idea and is there a limit to how much I can salary package?
A: Hi Pamela,
Whether it is a good idea or not is very specific to each individual and their circumstances. A full assessment by a qualified advisor would be required to make that call.
You are currently allowed to contribute $25,000 per year at the concessional rate (including employer amount) and up to $100,000 in additional contributions which can be banked in any 3 year period as a lump sum.
I hope that helps a little?
Regards
Scott
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Q: Broker lodged our home loan with Westpac on 25 September and we have not got an answer yet, how long does it normally take?
A: Hi Tim,
Don’t be too worried, it is quite normal at the moment to have loans taking up to 21 days with Westpac and CBA being among the slowest.
Part of it is the volume of loans and part of it is the greater scrutiny of information.
Cheers
Scott
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Q: Super paid on top or deducted from commissions? What is the law and there is no workplace agreement in place !!!!
A: It is widely accepted that commissions and bonuses are all inclusive. If you did have an agreement, it could clear it up but the law doesn’t stipulate
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Q: We operate a transport business and have been using ABM accounting software for many years. Finding it very manually reliant and our accountant had said their moving all their clients across to Xero but we would like to get some opinions on how they find Xero , MYOB, Quickbooks or others – thank you
A: Hi Penny,
I use Xero myself. I enter everything on a monthly basis and at the end of the year, my accountant logs in, checks the main reports and completes the annual adjustments.
A streamlined system will definitely save you a significant amount of time and probably money as well
Cheers
Scott
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Q: Hi
Current home loan is $635,000, fixed rate ends in November. Property value is $900,000 and we have credit card balances of $15,000 and a personal loan of $10,000. Between my wife and I our combined income is $185,000 – no kids. Can we refinance all the loans into one and what is best rate we could get?
A: Hi Timo,
On that information it should be possible. It is important to conduct a full assessment and find you the most suitable structure for any debt you wish to take out.
Assuming this is an owner occupied property and that you have no other risk factors you should get a rate that at least starts with a 3!
If you would like to discuss in full detail please feel free to reach out on 0435.474.498
Regards
Scott
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Q: Hi I am considering buying 1 bedroom apartment as first home buyer in Sydney west and rent it out after 6 months as I will be away. I have 5% deposit. How secure is to go into property market now as its cooled down maybe I can be bankrupt and not find tenants.
A: Hi Michelle,
I think that there are much better options for you. I would recommend you speak with a number of professionals and take a trusted friend or relative with you.
I don’t know the cash flow numbers on a property in Sydney’s west but I would expect that you would have to contribute $200-$300 per week on top of the rent to pay the mortgage. Plus any period of vacancy, maintenance and other holding expenses and body corporate fees.
If this is likely to be a strain on your finances then I would steer clear and just keep saving for a bit longer
Best of luck with your decisions
Regards
Scott
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Q: I have a physiotherapy practice and want to relocate… are there any lenders who can help with loans equipment and fit out costs and is a deposit required?
A: Hi Sanjav,
There are quite a few lenders who have specific teams to look at exactly this.
It will take a full assessment of your business and personal finances to be able to place you with the most appropriate lender
Please feel free to contact us at any time
Www.mobilelender.com.au
Scott.howell@mobilelender.com.au
0435.474.498
Regards
Scott
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Q: Hi, we own our home outright (value $750,000) and want to create an investment portfolio with shares or a deposit on a property or both. It is possible to get a loan in place against the home without knowing which options we would choose, maybe borrow $250-300,000?
A: Hi Nathan,
Certain lenders would be happy for you to apply for a loan as a “cash out” only. You may need to provide a full plan or just a few lines of notes depending on the product.
You will still need to show ability to service the initial debt and potentially any further debt such as purchasing a property
Speak with an experienced broker who can target the app to the most suitable product and lender
Best of luck
Scott
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Q: Hi,
I have just moved from being an employee to a contractor – same role with greater flexibility. My question is what percentage of my income should I put aside for tax and is there anything else I need to consider, thanks?
A: Hi Megan,
There are plenty of things to consider such as Super and Workcover but also the time and cost of maintaining your business compliance.
It does depend how high your income is and how many expenses you will be paying yourself. I would start at 30% and that should cover tax and costs of compliance up to about $120k per annum.
You will need to have a closer relationship with your accountant so I would suggest you go and spend an hour with them and iron everything out at the beginning so you don’t get surprised or caught out down the track
Best of luck
Scott
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Q: Hello
I am a first home buyer and would like to get some advice to buy a home. I have been in the same job for 4 years and earn $90,000 a year plus super. No loans and pay off credit card each month. I have inherited $120,000 and would like to know what price range I could look at, stamp duty costs and what do I have to buy to get the first home buyers grant. What rates and repayments are possible? Thank you
A: Hi Susie,
As mentioned already, we can’t just make an assumption from the amount of information available so far. To maintain affordability over the long term, you should aim at about 30% of take home pay in repayments. That would allow you a loan of around $400,000. Buying for $500,000 with a 20% deposit plus costs would be relatively safe.
The savings that you have accumulated over the past 4 years would increase the purchase amount.
I would strongly recommend speaking with a financial adviser and/or an experienced broker who could guide you. Just be mindful, just because you “can” borrow more, doesn’t mean you should.
Happy to discuss further or answer any questions you may have
Regards
Scott
0435.474.498
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Q: Hi,
I am currently transitioning jobs and I have been asked if I would prefer PAYG or to be paid as a Sole Trader.
Can you please tell me if I am financially better to PAYG or be a Sole trader?
Rate per day I will be earning is $550 including super.
Any advise would be greatly appreciated!
A: Hi Jade,
Whilst I am not an accountant and you haven’t provided any details around the type of work or possible expenses involved, I agree with Brendan. An employer that wants you to be a contractor isn’t doing it to help you out.
The work and time involved and the discipline to pay everything on time yourself is a pain in the rear.
Don’t be fooled into thinking you will pay less tax, the only way that happens is if you make less money
Best of luck with the new role
Regards
Scott
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Q: I have a small business that has been going for a year and I need to access some capital to take advantage of two new contracts. No luck with the banks so I am wondering if it is possible to use some of my superannuation to invest into the business. We only need about $50,000, are there any limitations and do I need to set up a SMSF to do it?
A: Hi Antony,
Time to think outside the box. Have a meeting with your accountant and an experienced broker and together there may well be a solution hidden somewhere
The SMSF and super funds are out though
Best of luck
Scott
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Q: Hi, I have a young family and want to go back to work and thinking of starting my own mortgage broker business. Previously I had 8 years in lending with one of the major banks and wondering if I should just go out of my own or join a franchise type model. I’d really like to get the thoughts of others in the industry and to also ask what else I should be considering, thank you
A: Hi Melanie,
It’s a tough decision but I think the biggest one is cash flow. If you have strong backing and can afford to build a business yourself over 12-18 months then that’s great and would probably be the most rewarding in the long run.
However if you will need to earn a decent income fairly quickly then working for a franchise or possibly buying into a franchise could work.
I do have a broker with me who works part time and will have a sustainable business at about the 12 month mark having had zero experience when she started in October last year.
It doesn’t have to be hard but having a good plan and sticking to it will make all the difference
Happy to chat if you wish
Regards
Scott
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Q: I was just reading an article from a broker about rates dropping and thought:
What's the lowest Low Doc rate these days?
A: Hi Graham,
It really depends what the loan function is? If it is a low doc self employed loan then Bluestone who have just secured a major financial backer have dropped their specialist rates by up to 3%
The key take away from all of this is to ensure that your clients NEVER let themselves be sitting on a standard variable rate. There are always discounts and other products available to reduce interest and fees on your loans.
Subject to qualification of course!!
Graham Doessel - CEO - MyCRA (Specialist Credit Repair) Lawyers (LPH)
6 years ago
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Q: Hello, on a commercial property loan of $330k from a tier 1 lender we are borrowing about $120,000 through our SMSF. Are such fees usually requested by the broker, the broker wants to charge $1,000 upfront? ? Is this standard industry practice for non resi loans or a matter of which broker can get away with these fees from the borrower?
A: Hi Fiona,
I think that the broker is really just looking to get paid for the significant amount of work that they will be required to do.
I don’t charge clients any fees, a choice that I have made in my business.
Although applying for your loan isn’t “worth” the small commission, I would be hoping that you appreciate the service you receive and recommend me to your family and friends.
It is your choice. For perspective, the real estate agent will probably earn about $10,000 for the same amount of work.
Best of luck
Scott
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Q: I was reading in the Financial Review that I could potentially rent out my SMSF investment property to a family member as long as it is done at a commercial rate. I much prefer to rent to someone I know. Is this true?
A: Hi Adam,
I don’t believe that is true. A residential property must be rented at arms length and cannot be rented to a related party.
A commercial premises can be rented by the owner
Best you speak with an SMSF expert before going too far down the track
Cheers Scott
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Q: Hi there
Got some great responses last time I posted here so hoping for a similar result!
I am a beneficiary of a deceased estate split into 3. We recently put the property up on Airbnb for some rental income whilst we wait for the property to be sold.
We did some work to the property readying it for lease such as painting walls, purchase of linen, crockery etc.
1) Can these expenses be claimed? Obviously it's work done prior to being leased but integral to be able to do so. Or does any receipt need to show that the date of purchase was AFTER the commencement date of lease?
For our tax returns, we will be splitting income/expenses between the 3. The property had no TV or Vacuum and so one party paid for these items out of their own personal money as they will take these items as soon as the property sells.
2) Will their be any red flags if one party claims higher expenses despite splitting income by 3?
Looking at it now, I guess if the answer to question 1 is 'NO' then question 2 is probably void as these items were obviously purchased before our first tenant.
Thanks so much for assistance. Great community of help!
Steph
A: Hi Steph,
I think a trip or call to your accountant may be in order. I believe that the painting and any structural repairs can be claimed but the personal items can’t be.
You can look up the ato.gov.au for guides to rental properties which are pretty comprehensive
Best of luck
Scott
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Q: Hi, we have seen the Purplebricks ads about no commission and wanted to ask if it is right that you pay a fee upfront and don’t get a refund if the property doesn’t sell?
A: Hi David,
Yes, I believe that is the case.
Cheers
Scott
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Q: Our home loan has always had a variable rate currently 3,97% and we're wondering if now is a good time to be fixing the rate. What is the best 2 and 3 years fixed rate - loan is $720,000?
A: Hi Susan,
I agree with George, the structure of your loan to suit all aspects of your life and your short term goals will create a sustainable outcome for you.
In your interview with a Broker you should spend time discussing other finance commitments, future finance needs, current and future income and your living expenses including any expected changes (both up and down)
It is very important to choose the most suitable combination rather tag just the cheapest rate.
You should be offered two or three options and the broker should explain why they have chosen and recommended each product.
If you would like to have this discussion and look at your options please feel free to give me a call on 0435.474.498 at any time
Kind regards
Scott
Scott.howell☀️Mobilelender.com.au
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Q: Hi, mortgage broker put our home loan application to Westpac on 13 August and we are still waiting for approval and the finance clause finishes this Wednesday. We are very worried and don’t want to lose this home, is there anything we can do?
A: Hi Maria,
Whilst this is extremely frustrating, unfortunately it isn’t uncommon at the moment. All lenders are being increasing forensic in their review of applications and this is adding anything from 5-15 days to the application process.
Your broker should be able to provide the current status of the application and also request an urgent escalation to have the file assessed.
Failing that, your conveyancer should contact the vendors solicitor and request an extension of the finance clause
I hope it all works out for you
Regards
Scott
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Q: Politics in Australia, you have the floor
What’s the one message you’d like to convey to the leaders within the Australian Parliament in relation to the way they are governing, leading, operating and managing the best interests of Australia and it’s people in both the short and long-term?
A: I think that is the challenge and the opportunity. To govern and lead at a Macro level instead of dabbling in micro special interests.
What we currently get is “this is what we will give you in the next two years” populist handouts.
The government needs a vision for 2030 and a plan to get there.
We have 3 levels of government (massive waste) but for it to work, they need to get back to
1. Govern in the National Interest (Fed)
2. Manage essential services, health and education and public entities (state)
3. Manage communities (local)
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Q: Where do I find a loan shark in Adelaide that will take a chance on me for a loan
A: Hi Cameron,
What I believe you are looking for is a specialist lender. Perhaps you could provide a brief of what you are looking for?
Feel free to to call on 0435.474.498
Cheers
Scott
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Q: I have heard that when applying for loans, the major 4 banks now have access to each others banking data (with your consent when applying) to prove discretional spending and other loans held in your name - is this true?
A: Hi PJ,
I don’t believe that this is the case . . . Yet!
At the moment, you provide your consent for the lender to access your credit file and credit history from a reporting agency (usually Equifax)
Some lenders do require bank statements and credit card statements as part of the application and they do use these to verify your disclosed debts and household expenditure. These are only statements that you provide or other accounts held at the same bank.
NAB has begun data sharing and the other 3 will likely come on board from September.
Currently just over one quarter of institutions have started sharing
Comprehensive Credit Reporting will add much more data to your credit file which could be either good or bad for each individual consumer
Once all lenders are sharing data, information about credit limits and 2 years repayment history will be on your file.
I hope that helps a little?
Regards
Scott
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Q: Hi, I am 30 and earn 87k pa. My boyfriend is 27 and doesn’t have an income (but will in the next few years). We have combined savings of around 150k.
My question is: what is our best move? Continue to save and put down a chunky deposit on a place in Perth (where we plan to live in a few years) and then use equity to buy an investment property or the reverse? Buy an investment property in the interim that I can service with my income. Orrrr start a share portfolio?
I’m feeling the opportunity cost of not doing anything right now.
A: Hi AK,
Great to see you have started planning for this. As James said running straight into something may bite you later if the strategy isn’t well thought out.
I heard a great new acronym the other day JOMO! The joy of missing out. Don’t let fear guide your decisions.
In terms of whether to buy a home in Perth or elsewhere now versus investing in other assets, it may well be worth speaking to a broker who could give you 3 or 4 scenarios based on current and projected income as to what you may be able to achieve over the next 10 years.
My opinion would be to buy something you can afford on your own now in a metropolitan suburb that has strong appeal to families and is well serviced. These tend to grow faster than outlying suburbs or apartments that would be in your price range.
If you would like to have a no obligation appointment to gain some further insight to your actual situation, please don’t hesitate to give me a call on 0435.474.498
Kind regards
Scott
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Q: Hi I am 68 and retired. My accountant has suggested I put all the money from my superannuation account into an income stream as the profits are now being taxed at 15%. However I must withdraw 5% every year. At present I don’t need this money Wouldnt I be better off to leave it in the accumulation account where it is earning a reasonable amount? If I withdraw it I will have to pay more than 15% on any earnings. Or should I just travel more?
A: Hi Susan,
I am neither an accountant or adviser so this is purely personal opinion.
I would leave it in accumulation as 15% of earnings is a relatively small amount and your balance should continue to grow by at least 4%* net of tax - easily covering current inflation.
Unfortunately none of us has a crystal ball.
Perhaps it’s worth getting a second opinion?
Best of luck
Scott
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Q: Looking for some general advice in this kind of situation:
- Purchased investment property within a company structure for the purpose of renovation and subdivision to sell on
- Market and personal circumstances have changed and so now the primary purpose of this property is to hold for capital growth (rental income does not cover interest repayments)
- Property is on >800sqm of low density zoned land on the northside of Brisbane and has good long term growth prospects
- Selling at this point would most likely lead to a small loss due to sales costs involved
- Due to the holding structure, the is a small land tax bill every year which would not be an issue if held in my own name
- There is a potential to proceed with original subdivision plan in the distant future (most likely >5 years)
Would it be wise to wait till the capital growth covers these losses and sell the property to break even OR hold on for capital growth in the much longer term, knowing it is in a structure that won't be eligible for the capital gains discount in the future?
A: Hi PJ,
Great question! I am sure that there are lots of people in your situation, whether in company structure or in personal names who are asking this exact question.
The decision would have to take into account your entire financial and personal situation and none of us can guide you appropriately in this without those facts.
Meet with your accountant and advisor and put everything on the table and then you will be able to weigh up your options
When you see it all on paper, the most appropriate path should become clear
In general terms, I would look to hold for the long term. As you say that could be 5-10 years down the track.
Best of luck
Scott
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Q: Interested to get people’s opinion on how the banking royal commission and the stricter lending policies of the banks will have on the housing market in Australia?
A: Anybody’s guess Peter!
I don’t think that the Financial services RC will have much impact on lending. The majority of issues were related to advice and collusion in the banking networks.
Overall though a stricter application of lending criteria -that were already in place-will slow down investor lending and will likely take about 3-4 years to return to normal.
Just my opinion, I think that 1 and 2 bedroom apartments will underperform for up to 5 years but will be stabilised by a reduction in new projects.
If I had a crystal ball . . . . .
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Q: The rate on our home loan is 3.81% …$670,000 loan. We see rates advertised at 3.55% and wondering if it is worth refinancing? Is it worth it and what questions should we be asking?
A: Hi Amanda,
Your rate is ok but it could potentially be worth looking at other rates. It really depends on your circumstances and what features or functionality you want from your lender.
If you did discharge your current loan and there were no penalties, the cost of moving is approx $600 plus any application or package fees on the new loan.
You would need to save 0.10% to break even, assuming that neither lender changed their variable rates during the period.
An added bonus is that some lenders offer cash back to cover these costs too.
Give your broker a call and ask them to assess your position and your needs
Good luck
Scott
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Q: I know salary sacrifice cap to Super is $25k per year (incld employer contribut) and up to $100k after tax. I received inheritance - paid off mortgage, and have balance in term deposit atm. Once that money comes off term deposit, is that classed as after tax and can I contribute $10k straight into my super as a one off?
A: Hi Jacqui,
As I understand it yes, that would come under the non-concessional contribution cap which is currently $100,000 per annum but can be loaded together up to $300,000 in one lump sum.
I am sure that the accountants on here will clarify the rules
Cheers
Scott
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Q: Hello - we are selling our business and will have a couple of hundred thousand to invest. At 51, with little to no super should we put the money into super or invest in managed funds so we can access to funds?
What returns should we set our expectation on managed funds?
Thank you
A: Hi Blair,
Congratulations on the success of your business! Now it’s time to keep yourself in the 5% and make sure you continue to be successful.
As James said, a clean, structured and tax effective exit has to be first consideration and then understanding your goals, needs and wants for the future is key to defining your investment strategy after that.
Best of luck
Regards
Scott
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Q: My wife and I are discussing life insurance and want to ask if the policy should be for the same value as our home or mortgage, thanks?
A: Hi Steven,
It is very much up to you as to the amount of cover you want to get. You need to look at a number of factors as well as your mortgage such as your age, any dependents, your income earning potential, your other assets and any legacy you would like to leave.
Best place to start would probably be a financial planner/adviser who could help you to work on a total wealth and protection strategy.
There are a few very good ones on this forum who will likely jump in with their opinions for you
Best of luck
Scott
0435.474.498
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Q: Hi, 6 months ago I started as a BDM for a print solutions business and finding it really difficult to get to the managers who make the decisions.
Does anyone have a couple tips or ideas I could use, very frustrating?
A: Hi Belinda,
Totally agree with James. Provide lots of free information that gets the right people clicking on your posts.
The second aspect of LinkedIn is that when you have the correct person you can direct mail them.
If you are interested in reaching out, I have three LinkedIn gurus in my network and I also have a couple of great campaigns for using direct mail
Best of luck with everything
Regards
Scott
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Q: I have a horrible credit rating and currently unemployed but I need finance for my next venture. I have more than enough equity in my home for what I need but who or how do I go about getting a loan, who should I be looking to speak with?
A: Hi James,
Let’s not mince words, you are pushing the proverbial up a big hill.
Depending on your structure and who owns the house, it may be possible to get a commercial low doc loan using the house as security. You will have a very tough time showing that you or the business can repay the loan.
I would recommend you meet with a Commercial finance broker and they can give you the policy that may suit you best, then work with your accountant to prepare a submission accordingly.
Best of luck
Regards
Scott
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Q: Hi,
I have a mix of direct shares and managed funds in my super. The return for last year was 15% which was good, but our financial advisers has shared some concerns about the market and the potential for volatility. They’ve made a suggestion to consider a cash out strategy into a diversified portfolio of managed funds. The return may not be as high but there’s less risk. Is this considered a good strategy at this point of time?
A: Hi James,
I’m not an adviser so I can’t direct you either way.
15% isn’t really that good for the last 12 months if what you are in is considered risky? Are you currently paying fees to achieve that return?
I would suggest you get a second opinion and maybe a third but it has to take into account your personal situation regardless of what the market “might” do
Best of luck
Scott
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Q: Our farmers continue to experience tough times due to drought. What suggestions do people have in relation to Government and community assistance to help provide some relief?
A: About 8 years ago, I made the suggestion that we should run a pipeline from the Wonthaggi DeSal plant up to the Murray River and allow unlimited water rights at Metropolitan water prices to give farmers a chance to operate a fully sustainable economic business model whilst building eco-tourism and reducing the government cost of the DeSal plant.
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Q: Hi
I have a 216 Dollars paid default that I got from origin energy in 2016 as I moved my house and didnt find out abt the bill until I got the call from the debt collector and was paid straight away.
My question is, I have my own cleaning business that has gross income of around 90000.
I want to buy a brand new car worth 50 to 60k next year around May or June.
How hard it will be for me to get the car loan if I come up with 10 to 15 k deposit aswell.
Also, how hard will it be for me to get a 1000 or 2000 dollars limit credit card from my bank like right now.
I just dont wanna try if it's going to get rejected as that affects the score, I've been told.
Any help will be appreciated.
Thanks.
Bunny.
A: Hi Bunny,
The first place to start would be to get your Equifax report so that you and your broker are aware of how the default is listed and to make sure that it shows as paid.
You can order a free report once each year.
When you have the report and assuming that the paid default is the only mark. You should be able to access a small credit card and next year you should be able to take out a secured vehicle loan for your business.
Unfortunately there are no guarantees that policy will not change or that a particular lender has an appetite for credit at the time you apply so it would be best to have the broker call your preferred lender and discuss the situation before any applications are lodged.
You are on the right track
Good luck
Scott
Scott.howell@mobilelender.com.au
0435.474.498
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Q: Should financial literacy such as savings plans, credit scoring, personal finance, credit cards, interest rates, home loans, interest calculations, buying and selling and the value of money all form an important component of the high school curriculum?
A: Definitely YES!
I am constantly stuck on the points of credit scoring or taxation when involved in discussions at all levels.
“It isn’t worth me working an extra shift because I’ll pay too much tax” is a common one
“I’m thinking of applying for a credit card so that I can improve my credit score” is another
These days customers have no genuine understanding of what serviceability is or how it is measured as well.
I think if a 17 year old was able to start their plan to buy a home with tools at their disposal we wouldn’t get the “smashed avo” discussion at all.
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Q: I have been offered 4.09% fixed for 3 years and the variable rate is 3.69% for a split loan. The 5 year rate would be 4.29%. Would it be better to go for 3 or 5 years?
A: Hi Margot,
As the two gentlemen have suggested there is no way of answering this without a crystal ball and some Tarot Cards. Seriously though, this is a very personal decision that should be made after considering all of your current and future income and expenses and your life stages.
Fixed rates can be great for your peace of mind.
If you are in a position to pay down your loan aggressively, I would possibly stay variable. If you only pay the minimum then fixing may be a good option - only choose the 5 years if you are very confident that you don’t expect changes in your employment or moving house etc in that time.
Best of luck
Scott
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Q: Hi
I have quite a bit of equity in a property I purchased through a smsf. Is it possible to refinance the loan, increase the borrowing from 50% to 70% and use the funds as a gift to my kids to help them buy a property?
A: Hi Oliver,
Sorry to say, James is correct. You can’t do anything with the equity unless you sell the property and you can’t use it personally until you are in pension phase
Cheers
Scott
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Q: My husband is 36 and been in the same role for 6 years earning $97,000. I’m 34 and have had same role for 3 years and income is $82,000. We don’t have kids, credit cards or any loans and have received an inheritance of $190,000. We currently pay $800 a week rent. We would like to ask how much we could borrow and what rate could we get, thanks?
A: Hi Sharyn,
Whilst everything will be subject to verification and a full assessment, you would start by aiming to cover 20% plus costs using the $190,000. You haven’t mentioned your own savings or other assets but you could buy for approximately $750,000 on that basis. You can potentially borrow more than 80% as well, that would attract Lenders Mortgage Insurance.
Why not give Jacqui or Peter a call and catch up with them this week?
Best of luck with the search, very exciting to get out of the rent cycle
Cheers
Scott
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Q: Hi,
We have bootstrapped our business but need capital to grow. A lot of roadblocks from banks and others for finance so we are thinking of offering a convertible note to raise $70,000. Has anyone got any experience with doing something like this and what do we need to look out for?
A: Hi Jason,
This is the biggest challenge for SME’s every day.
You mentioned that you have hit roadblocks with lenders, have you had a commercial broker look at your financials?
As the other guys have said, there are a number of instruments that may be available to you that your bank hasn’t offered or considered.
Some examples are cash flow finance, asset finance, invoice/debtor finance or a general charge business loan.
If you would like some further guidance feel free to give me a call and I will try to connect you
Cheers
Scott
0435.474.498
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Q: Hi,
just a quick query. Any advice would be greatly appreciated.
My partner and I wish to purchase a home for 990k
We have 400k as a deposit and that is in the form of an apartment we have a sale contract on.
We have 25k in savings and we have an income of 6k nett a fortnight.
The issue is that I myself can not be part of the loan - I previously separated 4 yrs ago and had to take a part 9 debt agreement to continue on in life.
Without my income, my partners is 2k a fortnight,
however - for the past 12 months, one form of my income (superannuation) has been paid into her account and never touched (2k a fortnight). Will the bank be able to take this into account? What are her chances alone on that income to be approved?
I am asking because we would like to place our offer and don't want to be stuck in the dark.
Regards,
PartnerA1
A: Howdy Pardner!
There are a lot of things going on in your situation that need to be discussed, verified and then tested with a lender.
One immediate concern that I have is that you have mentioned you are already receiving some payment from your Super. Are you in transition phase now? Lenders will look for comfort as to how you will earn your income for future years and what your exit strategy would be if you were to stop work completely.
We can get around the part 9, however, to have you on the loan would attract a higher rate and risk fee from the lenders.
The best thing you can do is meet with a broker and lay everything on the table, they will be able to guide you as to what options you have now and what you can do to improve your credit application in the future.
I am very close by if you would like to grab a coffee and discuss further?
Cheers
Scott
0435.474.498
LL Consultancy L
7 years ago
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Q: Hi
Going to my first auction tomorrow. Whats people’s thoughts on the best strategy to take. Should we wait until it hits the reserve price before bidding?
A: Hi Rick,
Confidence is king! Make sure you know your preferred price and your maximum price for the property.
I have attended a few Auctions where one bidder confidently bids immediately for each rise, stating the bid they want to make not just putting up their hand. Other potential bidders are intimidated by their control and tend to back off, meaning the property can be passed in to you below the reserve price. Then you have to be tough in negotiating one on one and decide how much you want the home. If you would like to send me the address 0435.474.498 I can send you an auto-Val report today.
Best of luck for tomorrow
Regards
Scott
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Q: Hi, I am 26 and have been with the same company for 5 years and my super is about $25,000. Is that enough to have a financial planner now or should I wait and just use the superfund through work?
A: Hi Abby,
I would doubt that having a financial planner would add value to your super with that balance but as the other guys said, a planner can guide all of your wealth building and investment if it is right for you.
I would start by checking that the Super you are currently in has appropriate insurance for your age and your needs and charges less than 1% in total fees.
Best of luck with everything
Regards
Scott
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Q: If our home was valued at $500,000 what can we borrow with no mortgage insurance? Thanks
A: Hi Frank,
As Nathan said, 80% for most lenders and 85% for a couple.
It is possible to gain an up-front valuation from many of our lender panel so that you don’t apply unless you know that the valuation is going to stock up.
If you would like any assistance with that, please feel free to give me a call at anytime on 0435.474.498
Cheers
Scott
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Q: Hi - We have a contract cleaning business and used all our savings and profits to build the business. It is now making good money and my accountant said it would be worth around $400,000. We pay $700 rent a week and we want to know if it possible to buy a home using the property and the business as security. We would like to buy around $600-$650,000? Thanks
A: Hi Mina,
Not in my understanding. You could use the business income for servicing but the business has no value to a mortgage lender.
If you are making $200,000 per year, the bank would be questioning why you don’t have 5% in savings
I would suggest it’s time to pay yourselves wages and save some money outside the business if you are looking to buy a house.
By all means speak with a broker who could outline what lenders will be looking for so that you can get yourselves ready
Best of luck
Scott
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Q: Hi
Our home loan is with CBA $540,000 and the property would be valued around 800,000… we both work, 2 kids 8 and 10 and we don’t like credit cards. The rate is 4.19%, what is the best rate we could get by refinancing?
Thank you
A: Hi Phoebe,
As Peter said, the rates in the mid 3’s are accessible provided that you meet the criteria for each lender around property type, Loan to valuation ratio and serviceability.
The only way to provide a proposal for you is to conduct a full assessment and needs analysis.
It will cost you $588 to leave CBA and may cost you up to $600 in application fees for the new loan so it needs to provide you a rate that is around 0.2% better to break even. This is very achievable in the current market.
If you would like to book an appointment you can give Jacqui a call on 0431.156.001 or myself on 0435.474.498 at any time
Kind regards
Scott
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Q: Hi there, over the past 12 months our business has grown from just my husband and I to 7 staff and keeping track of salaries, payroll tax, the insurances and super is not a part of our skill set. We really need help but don’t want to put on anyone full time.
Does anyone know of a bookkeeper that can handle all of this or are we better off going through a payroll agency, any recommendation would be helpful?
A: Congratulations Kerry-Anne,
Sounds like you are doing really well. A local part time bookkeeper is probably your best option.
4-6 hours should do it?
Best of luck
Scott
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Q: Starting a new job in two weeks and need a car for work. We have quite a bit of available funds in our redraw and Instead of getting a lease I thought I would just use the redraw and pay a lower rate.
What car expenses can I then claim through tax and do I need to complete a log book for travel?
A: Hi Greg,
I like the way you are thinking. Buy the cheapest, suitable reliable car that you can. (Something from a demo to 2-3 years old that you will drive for 6-8 years) Negotiate an awesome “cash” price and keep all of your receipts as well as keeping a thorough compliant log book.
You’ll save a fortune compared to getting a new car on a lease
Good luck in the new role
Regards
Scott
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Q: Hi there, I was made redundant 4 months ago and had a novated lease with my previous employer. I have now been offered a 'vehicle hand back option' regarding the car from the Lease Protection insurance company. They will cover up to 25k (less car payments and petrol costs already paid) if I hand back the car to the financier. The current payout figure is 39k on a 2016 Jeep Grand Cherokee. Is there anything I need to consider before I decide?
A: Hi Fiona,
Unfortunately you have already chewed up $30,000 in value, selling or handing back the car isn’t going to get a cent of that back.
Lesson learned!
Drive it until it dies (10 years plus) and avoid Novated Leases like the plague
Best of luck with it
Regards
Scott
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Q: I am discharge from part 9 on feb 2017 still showing bankruptcy on my credit file what to do ? Can u remove bankruptcy from credit file?
Thanx
Kamal
A: Hi Kamal,
A truthful listing on your credit file can’t be removed. I would recommend you call a free financial councillor service to confirm this but don’t pay a credit repair company until you have that clarified
It can take anywhere from 3 to 5 years to come off your credit file.
Focus on saving and paying all of your bills on time and you can still qualify for lending for worthwhile purposes with some lenders
Best of luck with it
Regards
Scott
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Q: Is now a good time to think about a fixed rate for our investment loan?
A: Hi John,
Impossible to say what will happen with interest rates. The choice and the decision lies with what you feel comfortable with.
Most experts expect that it is more likely that the next move will be 0.25% up, possibly within a year and then another within 18 months.
Banks and other lenders can, have and will continue to change rates according to their own funding and cost structures as well.
If you have surplus income and a strong cash buffer you may take the risk and stay variable, whereas if cash is tight and a small increase would make things difficult for you, it may make sense to fix some or all of your loan.
Only hindsight will tell us what was the correct choice, so speak with your broker or an adviser and do what makes you sleep best at night
Best regards
Scott
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Q: Question on behalf of my mum, she is 78 and still very active. She is looking at buying a house and land package near Goulburn for $450,000 as an investment. Mum owns her own home valued at $1.2M and an investment property valued at $1.6M and she lives off her super. Apart from the super she has around $200k in savings and would use $150,000 to purchase the property. With a strong net asset position would she be able to get a loan of $300K and what lenders would look at a loan like this?
A: Hi Jack,
Could she do it? Yes! Possibly. The lender would be assessing your mums ability to make the repayments and what the purpose and the exit strategy would be. They would look at a whole range of variables that would be very specific to your mum and these could include the expected rate of return the type and location of the property, the ongoing income from Super and other investments and her actual living expenses.
Just because it ‘could’ be done, doesn’t mean it should.
Get lots of professional advice!
Best of luck
Scott
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Q: My husband is set on buying a handy man franchise costing us $40,000 to join. He is very good around house and I think he can do it himself but he thinks he needs support and the brand. For us it is a lot of money and how do we know they will support him with new customers?
A: Hi Angie,
I have been involved in 4 franchise systems, twice as franchisee, once as employee of the franchisee and once as employee of a franchisor.
The system is amazing when it works and it is horrendous when it doesn’t.
As Brendan and Todd have said already, you are paying a significant amount to basically buy a system and a database. If your husband wants to be busy and have the flexibility of being self employed then great, but don’t expect big money. Most of these business make wages and then don’t even sell for what you paid after 5 years.
If he wants to build a profitable business and one day employ a couple of people, I would think that going it alone, whilst slow and painful to start may be a better option.
Speak to at least 5 franchisees and don’t be afraid to ask “what was your NET PROFIT for the past two years”. Remember every franchise has winners who make a great income and will rave about the brand. They also have a percentage of franchisees who are disillusioned, disheartened and bordering on bankruptcy.
Either way it will be hard work and you need to do lots of research and get plenty of expert advice.
Best of luck with it
Regards
Scott
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Q: Hi,
I am 48, single, no kids and been working for the same company for 15 years. I recently set up my own SMSF with $320,000 and would like to get some advice on what people think is the best long term strategy, purchasing a residential property, buying shares or managed funds. Can you buy an apartment with SMSF or does it have to be house with land?
A: Hi Eliza,
That is the $64,000 question isn’t it. I agree with Brendan, what you do inside your SMSF has to compliment what you have outside and vice versa.
Do you own a home yourself?
Do you have other investments?
How long do you intend/need to work for?
These are just some of the questions you need to consider.
I imagine you want income and growth from this investment, maybe an apartment doesn’t fit that as well as other forms of property?
Start with your accountant and find an experienced adviser for the long term
Best of luck
Scott
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Q: Hello, a mate prompted me to check our home loan rate with ANZ - 4.49%, the loan is $780,000.
If I call them on Monday to ask about the rate what would be a reasonable expectation for them to reduce the rate by?
A: If it’s owner occupied and principal and interest it should be under 4% so if you don’t get that, I would suggest you call a broker.
Feel free to call at any time
Regards
Scott
0435.474.498
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Q: Being able to help people is the cornerstone of a successful business.
We would love for people to be able to share a story of how you were able to help a particular customer in 2018 and why it put such a smile on your face?
A: Really proud of this one!
A young mother on a forum I am on was distressed as her bank had pulled out of funding their home construction as the builder had already started the project before the bank came to value it.
I offered to look for a solution and was able to find a private lender in NSW who were able to take on the build and they will settle on Tuesday and get on with their family’s dream.
It took me about 10 hours of work and although I’m not being paid, the outcome is worth every minute.
"If you are looking for a broker or advice in regards to lending I highly recommend Scott Howell. He went above and beyond for us!
We had been let down by a previous brokers recommended to us ie not following up, not keeping us up to date with progress and also not trying very hard when they found out our situation wasn’t a straight forward one.
Exceptionally happy with Scott "😊
🌟🌟🌟🌟🌟
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Q: Hi, we need some advice about our home loan application
We are due to go to auction on Saturday and been waiting for our mortgage broker to finalise the approval. It has been 4 weeks and we have been promised each day this week the approval is on its way. We are obviously concerned, what should we do and can we call the lender directly?
A: Hi Regina,
This isn’t good but it is possible. Westpac for example were taking 16 business days before they were even looking at a file for the first time.
Your broker should probably have been aware of this though and applied for a conditional approval through a different lender.
As Ross said, don’t bid at Auction or within three days immediately before and after the auction without having the conditional approval in place
I’m just around the corner from you if you need any help?
Regards
Scott Howell
0435474498
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Q: We have been renting for over a year and found a property we would like to make an offer for around $1.2M. We would only need to borrow $650,000 but have had a few credit issues in the past and sold our previous home to clear all the debts …. the credit report is not clean. We both work full time and would like to know if we could still get a loan and what the rate might be?
A: Hi Sophie,
The specialist space is very much a case by case basis. Depending on the strength of the deal and yours is quite strong from the LVR angle, you may actually be better off going with a Big 4 bank as they will accept more risk than a subsidiary or regional lender will, at much better rates than a typical credit impaired deal.
I would suggest that you don’t make an offer until you have been fully assessed.
You need to meet with a broker and put everything, including the credit issues, on the table and work out your strategy from there.
If you would like to discuss further, I am happy to answer any direct questions that you have and help provide some guidance
Regards
Scott
0435.474.498
Scott.howell@mobilelender.com.au
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Q: Hi,
I want to buy an investment property to help set up my two kids, 17 and 15.
I know they can’t borrow money and the loan will be in my name but what’s the best way to set this up.
Can they be on the title or will it have to be a private agreement and what are the CGT and stamp duty implications should they end up owning the property over the next 10 – 15 years?
A: Hi Gary,
Definitely a question for a very good accountant.
My understanding is that you would be looking at a discretionary family trust as the most efficient way of transferring ownership, however the tax and compliance rules and costs can also be significant
I would recommend you get a couple of opinions and map out the costs and benefits over 10/15&20 years
Best of luck with it
Regards
Scott
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Q: I have a full time job and work casually most weekends so I can save to buy a home. So far I have saved $15,000... will home loan lenders consider the money I earn on weekends as well as my full time job?
A: Hi Trish,
Yes, depending on the length of time that you have had the position. Some lenders will take 100% and some will reduce it to 80% or even 50%.
To purchase your home, as Steven said you will need an absolute minimum of 5% of the purchase price plus the costs of the purchase such as mortgage registration, Conveyancing and title fees
Best of luck with it
Regards
Scott
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Q: If we were gifted $50,000 and had a private agreement to pay it back over 5 years could we use it as a deposit on our first home? Sale Price is $760,000.
A: Hi Emily,
The short answer is no and the long answer is probably no. Sorry.
1. A gift is non repayable and must be clearly defined that way
2. You would need around $80,000 as a minimum contribution for a purchase of $760,000
3. You should not borrow $700,000 without showing that you have the capacity to save/repay $5000 per month over an extended period of time - known as genuine savings.
There are structures that allow for people to purchase a property without a deposit or genuine savings but you would need to have an in depth discussion with a solicitor, the gifting or guaranteeing party and your mortgage broker. There are risks involved.
Best of luck with your future plans
Regards
Scott
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Q: I run a small business with 3 staff and the business is going ok apart from staff issues. Their work is great but after 5 years I feel I would be making more money for my family if I chose to operate on my own. With super, taxes, paperwork and their personal issues.. it is wearing me down and I’d like to get some advice from other business owners who may have or have been through a similar experience. I do feel obligated to support them but at what cost, thanks in advance?
A: Hi Sally,
The bane of most businesses existence! Business would be great if it wasn’t for staff and customers 😂
I agree with Scott though, over the 5 years your business has likely changed quite a bit and your staff and the business landscape have changed dramatically. If you have the opportunity to work with a great business adviser to get your focus back and build systems into the operation you will surprised at the uplift you can get in morale and output
Worth a go in my book. I have a sales coach and a business systems adviser
Best of luck
Scott
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Q: We have too many loans and want to see if we consolidate a $485,000 home loan, personal loan $7,000 and 3 credit cards $17,000. The rate on our loan is 4.29% with Westpac and the house would be worth around $750,000.
Can we get a lower rate and what would the repayments be? thanks
A: Hi Megan,
The short answer is yes you can. The long answer is that you will need to undergo a full assessment and analysis of your financial position and your goals and needs before we can recommend a product for you.
If you are able to tick all the boxes for a base variable rate home loan you would definitely get a lower rate.
If you jump on our Facebook pages Jacqui Milway (Keysborough) or I would be happy to meet with you to make the assessment
Best of luck
Scott
0435.474.498
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Q: What would be considered an ideal mix between shares and property when developing an investment portfolio?
A: Hi Jerry,
That really depends on your risk appetite, your age, your current asset position and your current and future earning capacity as well as another bunch of variables.
Mine is 60% property outside Super, 10% shares outside Super and 25% shares and 5% cash inside Super but that is far from perfect for me it just worked out that way over time.
There is no substitute for really thorough planning and a detailed personalised strategy
Speak to an adviser - it will probably save you thousands
Best of luck
Scott
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Q: I am looking at opening an SMSF but I am not experienced in this area. What should I be careful of when approaching a Financial Planner (ie. questions I should ask), amid the media coverage of the Royal Commission?
I am not interested in taking on products that the Financial Planner might offer. I want financial investment advice and I also want the Financial Planner to manage the SMSF as I have compliance concerns if I were to do it, myself. Thank you in advance.
A: Hi Julie,
Great financial planners will make you a lot of money and save you a lot of money. And poor ones can do the opposite.
Understanding the regulations involved in SMSF and the cost of maintaining compliance is critical. If you have a decent amount ( probably over $250k) to put into the fund then it can be a good vehicle but make sure you have a clear strategy in place first. This is LAW!
Take your time and think through your options
Best of luck
Scott
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Q: Hi,
2 friends and I are starting a property renovation business where we help people with the designs and renovations with their own properties. We hope to one day to buy, renovate and sell properties as well and would like to get some advice on the things we need to consider in setting up the partnership?
Thank you
A: Hi Caitlin,
As Brendan has articulated, this is likely to be a very long list. To me a very important thing that rarely gets enough thought and preparation is the exit strategy.
What do you do when one person wants to leave, to sell or to retire (or worse happens)
An old quote “everything ends badly, otherwise it wouldn’t end” is so very true in relationships of any kind so be sure to have everything covered and adequate insurances in place
Best of luck with it
Regards
Scott
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Q: We owe $25,000 on credit cards and finding is hard to make the repayments, we are a month behind and we want to see if we can refinance the cards into our home loan. The home loan is ok as we have made it the priority. The loan is $360,000 and the property is about $520-530,00 – is this possible?
A: Hi Frank,
As Peter said, you can roll credit card debt into a home loan. Based on the estimate of the value of your home you would stay under 80% lending which is great but you must be up to date and stay up to date.
You will need to have your full financial position assessed and your broker will have to make sure that the loan is not unsuitable to you.
If you would like help with this, I have a number of clients in Geelong, Colac and Ballarat and I would happy to come and meet with you.
Best regards
Scott
0435.474.498
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Q: Hello
My business has been operating for 10 months and we have just secured a couple of new contracts which means I need 2 new staff. As the business has just started to grow I am finding it difficult to get the finance needed to take advantage of the new contracts. Is it possible for me to invest some of my super into the business? I have $220,000 in super and only need about $40,000
A: Hi Matt,
Congratulations on the new business, great to hear it is growing. I don’t believe that you can use funds from your Super, whether it is self managed or not. You could potentially purchase commercial premises and your company could rent the space but I think that is the only option. I am sure some of the accountants on here will clarify.
A separate question - if you have secured contracts and have priced in a profit margin why do you need to borrow money? Are the contracts back-ended such that they won’t pay until after all of the work is completed?
Is it possible to have a progress payments option so that the client pays a deposit and you aren’t funding the customer along the way?
I hope you find what you need and can concentrate on growing and building your business
Best of luck
Scott
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Q: I am looking at an apartment off the plan in Newtown… completion late 2019. It is 50 square metres plus a small balcony and a garage on title. Before I pay the deposit can I ask if it is possible to get a loan on this type of property as an investment?
A: Hi Sam,
Given the answers you already have been given and the additional information you have provided there is a chance that you could get approval for this property when it is completed. You have zero chance of getting an unconditional approval now.
Nobody knows what your financial position will be next year, how property values will change or how lender policy and government regulation will change.
Tread carefully!!
Cheers
Scott
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Q: What is the maximum fixed rate term, can you get a 10 year fixed rate?
A: Hi Jackson,
You an get a 10 year fixed rate with some lenders. The downside being that whilst you may be hedging against increases so are the banks and the rates are generally above 7%
Five years you can get around 4% with a few different lenders so that it probably much more worth looking at.
Feel free to call if you wish
0435.474.498
Regards
Scott
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Q: Hi, we are buying a new home at Ambervale, Price $599,000. We are both working and combined income is $130,000 and have no other debts or credit cards… we have a 2 year old at day care and want to borrow $500,000. What is the best rate we could get and does the loan have to be with one of the banks? Thank you
A: Hi Marion,
Straight off the bat, you are going to be borrowing above 80% of the valuation of the property so that crosses out a number of the “cheap” rates that you see advertised. Other than that there are quite a few variables that will affect whether a loan is suitable for you and then the rate you will pay - specifically in that order.
I would recommend you contact one of the brokers who have answered your question here and provide the rest of your information for them to assess you fully.
It will be well worth the time down the track.
Best of luck
Scott
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Q: If we do some minor renovations on an investment property - about $40,000, how much of it tax deductible?
A: Hi Melissa,
It depends on the work. If you ‘need’ to replace something that is damaged it can be an expense in the current tax year. If you choose to do capital improvements then they would be added to the capital base of the property and may possibly be depreciable or may need to simply be accounted for if/when you sell.
I would speak to your accountant and discuss in detail what you plan to do, how much it will cost ect prior to getting anything started
I would expect that the money borrowed to pay for the renovations would be deductible
Again, check with your accountant and make sure you get all of your questions answered first
Best of luck
Scot
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Q: Where is the best place at the moment to buy an investment property for around $600.000?
A: Hi Pascal,
This is impossible to answer so instead of trying to I’ll offer the criteria some of my clients have explained to me when financing investment properties.
1. Buying for cash flow/yield - these buyers want to minimise the monthly cost of the property and are looking for a strongly rentable property usually in a cheaper area which will be cash flow positive in the short term
2. Buying for capital growth - these buyers generally have higher incomes and can afford to negatively gear the property for the long term and will buy in a better area even though the rental yields are lower.
You will probably fit somewhere in between and I would suggest that you sit with an accountant and a planner to decide how you want the property to work for you and over what time frame
Best of luck with it
Regards
Scott
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Q: Hi,
Self-employed and about to buy a new car – is it better to get a lease and finance the car or use the redraw on our home loan?
A: I guess Tim, my answer would be that it depends how much income the vehicle is going to generate.
If you are rewarding yourself with a toy, then put it on the home loan. If it is an income generating asset in the business then get a chattel mortgage/finance lease in the business
Best of luck
Scott
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Q: Hi , I'm looking for some advice on the following.
I'm 50 , working full time , married. We have combined super of 330k , 200k savings , A mortgage of 250k. The house is valued at 550k.
My goal is to pay of my home and live comfortably into retirement. Should I put the 200k onto the mortgage , or into my super, or invest it to gain more growth?
On top of that Im looking at having a career break for 12 months.This would be unpaid.Any help would be great.
A: Hi Paul,
Sounds like there is a bit going on in your life at the moment and a bit of thinking to do about your future.
If you want to live comfortably in retirement, I would suggest you see a financial planner/advisor about how to invest tax effectively whilst still a lifestyle that you can be happy with for the next 20 years.
You obviously have personal reasons for the career break but you will have to make up your own mind about what sacrifice that will be to your retirement
Best of luck with it
Regards
Scott
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Q: I would like to ask if there is a way to keep track of how our super performs including the fees online … like we can with our home loan?
A: Hi Rick,
It really depends on the fund. I am with HostPlus and I can see everything as often as I want to.
Give your Super a call and ask
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Q: Looking to buy a block of land in Nelson Bay and build in 5 years for our retirement. Price $450,000. Can we use SMSF to buy and how much could we borrow? We do want to live in the property when we retire in 10 years?
A: Hi Angie,
Sam is absolutely correct. Do you have another way of freeing up equity outside Super to purchase it? Could you transfer an existing investment property into your Super freeing up your borrowing capacity outside Super?
These are just random suggestions of course. I would highly recommend you speak to a financial planner and set a course for your retirement and then see an experienced broker (not from the planners office) to go through how you might finance those aspirations.
It will be well worth paying a couple of grand to make sure you act within the rules, tax effectively and for your long term benefit.
Best of luck with it
Scott
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Q: Our rate went from interest only to principal and interest 6 months ago and the rate is 4.19%. It seems high, what's the best rate we could get?
A: Hi Katherine,
I agree with Jacqui, there are a huge number of variables that determine your eligibility for a particular lender or product.
Assuming you are PAYG employed, have a metro low density property, borrowing less than 80% for owner occupied purposes then you could get those rates around the 3.6% mark for P&I repayments.
Meet with a broker and go through all the aspects of your needs and current situation and then the right loan will become clear
Best of luck
Scott
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Q: Hi, is now a good time to be fixing some of our home loan, current rate is 3.99% variable?
A: Hi Lindsey,
Any time is a good time to fix if it meets your needs and goals over the fixed period and beyond.
I currently have a number of clients who are fixing up to 80% of their loan and leaving 20% variable so they can clear that portion during the fixed period.
Reasons not to fix include - the cost involved if you sell your house or have to refinance during the fixed period. The possibility that rates will go down further. The limitations on the amount you can pay extra into your loan. Not many fixed loans have an Offset facility.
Reasons you may want to fix - peace of mind that your repayments won’t change. The expectation that rates will rise during the fixed period.
Have a detailed discussion with your broker and then make an informed decision that best suits your individual situation and needs
Best of luck
Scott
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Q: I run a small business… does anyone know if the $20,000 tax incentive still available before 30 June?
A: Hi Taj,
Just don’t buy useless crap under the disguise of a tax deduction. If it doesn’t make you more money, it costs you money!
Cheers
Scott
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Q: Wife and I in our mid 50’ss with not much super. Looking to downsize from a family home worth about $1.6M into an apartment block, Purchase price $950K including costs. We are both still enjoying working so should we look to place the funds into a managed fund where we can get access or our super? thanks
A: Hi Marcus,
I’m not a financial adviser, this is just my opinion. I don’t see this to be a great option for you. Your family home will likely increase in value at a superior rate to the apartment and the capital gains on your family home are tax free.add to that the process of selling and buying will chew up the best part of $100,000.
I’d love to see you go and get a second opinion and some professional advice
Best of luck
Regards
Scott
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Q: Parents have been running the family business for 20 years and now ready to retire. We have tried the sell the business ourselves but now believe we need a specialist, does anyone know of a good business broker?
A: Hi Tony,
I agree with James - they need really good advice before they do anything!
This is every “baby boomers” nightmare. The business they have run for 20 years may not be worth anywhere near what your parents want or need to sell it for.
I have had clients get awesome results by bringing in a mergers and acquisitions consultant who rather than just being a broker, will assist you or your parents to extract value and package the business in a way that doesn’t need your parents as key people. This can be a 12-18 month process but it can result in up to 3 or more times better results.
If you do just want to sell quickly try Denise Hall from Xclusive Business Brokers. They have offices in Sydney and Melbourne.
Best of luck
Scott
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Q: Hello, I earn $120k a year and looking to buy an investment property to get into the property market.
My parents have offered to help but I have some questions as I don’t want to expose them.
If they give me 10% deposit can I borrow 90% or do they have to be on the loan?
Do they have to be on title and do they have to mortgage one of their properties?
A: Hi Sally,
The short answer is no they don’t need to be on the title or the loan. You would have to meet all of the lending criteria of course.
I am right near you if you would like to have an appointment to discuss your needs and goals?
I can be contacted through our website, www.mobilelender.com.au on my mobile 0435.474.498 or find me on Facebook
I look forward to being able to assist you on your property journey over the coming years
Regards
Scott
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Q: We have had our home loan with Pepper for 2 years after having a small credit issue. The rate is 5.2% and we would like to know if we have options to refinance. Is 2 years long enough?
A: Hi Jerry,
It depends what the default was. If it was a finance company you will need a good explanation and you will still be affected by your credit report. If it was a utility or telco and you paid it off, you have mainstream options available.
If you would like to discuss, please give me a call anytime 0435.474.498
Regards
Scott
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Q: What is the best superfund that has the lowest fees and best returns?
A: Hi Steven,
James has hit the nail right on the head. Any financial product has to fit your needs whether it is a home loan, insurance product or your Super.
I would suggest that you speak to a financial adviser who will have the initial discussion with you at no cost and if you don’t like their suggestions move on.
Low costs are important especially when you are in pension mode but chasing high returns will likely see you getting burned.
Best of luck
Scott
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Q: I’m looking at buying an investment property at Newtown $700k… instead of putting it with an agent I want to put it on Airbnb. Can I still borrow 90% and will lenders consider the rental forecasts, thanks?
A: Hi Jason,
Further to your updated question, you can potentially borrow 90% for investment purposes
Provided that the lender and the mortgage insurer are happy with the valuation risk
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Q: With the first home buyers grant, how much would I need to have saved?
Secondly, how difficult is it finding a private lender?
Thanks so much for any advice.
A: Hi Laura,
You must have saved at least 5% of the purchase price in order to apply for a home loan. You could then potentially borrow 95% and add on the lenders mortgage insurance charges to the loan. With the grant being $20,000 if you build a new property.
This is a fairly high risk option though as you would not have any equity in the property and would get nothing back if you had to sell.
Private lenders generally ask for 12-15% interest and will only deal with commercial lending so I’m not sure that you would be able to find one.
I would be happy to answer any other questions you may have.
Thanks and regards
Scott
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Q: We like the idea of having some of our home loan fixed ... we have been offered 3.56% variable but the 3-year rate is 3.99%. If there is no likelihood of rates moving then should we just choose the variable rate?
A: Hi Georgie,
The variable rate is great and the 3 year rate will give you peace of mind. I believe that we are likely to get one official rise in November as a test for returning rates back to the mid 5’s longer term. It is purely a guess of course.
The other thing is that lenders who source funds from open markets rather than from deposits will face pressure as we saw with ME bank lifting rates 0.14% this week.
I would recommend you went with something like 75% fixed and 25% variable so you have the flexibility to pay as much extra into the variable as you can during the fixed rate period.
I don’t know your personal circumstances so please discuss with a professional before making the final decision.
If you would like to discuss further, please feel free to give me a call on 0435.474.498
Regards
Scott
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Q: Fun Friday,
Can you name a movie quote that gives away the film without saying the title?
A: Say what again! I dare you, I double dare you
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Q: Our home loan is 50% variable and 50% fixed….. and the fixed term is about to mature. The variable rate is 4.39% and they have offered 2 years at 3.99% and 3 years at 4.09% or make it all variable. Are these the best rate available on a 620k loan?
A: Hi Kathy,
You have already said the loan would be under 80% which is great, I also assume this is for your owner occupied loan.
Depending on any credit history issues, your income and expenses and the type of property, you really should be able to get under 3.75% for variable and for fixed
Feel free to give me a call on 0435.474.498 if you would like and I can discuss any other factors that you will need to consider
Best of luck
Scott
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Q: Hi,
I’m a first home buyer and looking to buy a property around $650k. I have $300K in saving and will need to borrow about $400K. I have run my own business for 3 years and wanting to split the loan 50% variable and 50% fixed for 3 years. What are the best rates available?
A: Hi Lisa,
While rate isn’t the most important part of the process, you will find some very good rates around 3.75% - assuming these fit your circumstances. Not everyone can access the rates you may see advertised.
I would strongly recommend you sit with an experienced broker who will have 25+ lenders to choose from and can tailor a solution that best fits your needs.
If you would like to discuss any specific needs, feel free to give me a call 0435.474.498
Have a great day and good luck with your new house
Kind regards
Scott
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Q: We want to buy an investment property in Port Macquarie, Price - $720,000. We own are own home and want advice if we can use the equity to buying the property and cover all the costs. Our home would be around $330,000. Can the property in Port just be in my husband’s name as he works full time - income $85,000, thank you?
A: Hi Debbie,
There are a few more variables such as age, living expenses, other debts, dependents and the rent you would receive.
Potentially you could borrow 20% plus costs against your Tamworth property ($180,000) in both names and then complete the purchase with an 80% loan ($576,000) in your husbands name.
I would suggest you sit with a broker AFTER you discuss your goals and needs with a financial planner to completely understand what you are going to do and why.
Best of luck with it all
Regards
Scott
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Q: Hello, I am 59 and want to start planning for my retirement. I would like to get some feedback in relation to the proposed changes to superannuation if the Labour government wins the next election. I have $400,000 in super and now quite nervous about how it might affect my retirement plans. Can someone provide some advice?
A: Hi Julie,
It will be well worth having a plan to meet your short and medium term needs but I wouldn’t be worried about political noise.
Any actions you take will put you in a stronger position regardless of any changes.
It is just my opinion but neither party will be silly enough to mess with retirement savings other than at the edges of benefit limits
Best of luck
Scott
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Q: Hi,
I have a question about my home loan as the interest only period expires in early May. I want to keep it interest only but the bank has said no and it will be principal and interest. There is no problem making the repayments but I would just prefer interest only. Is refinancing my only option?
Regards
Zac
A: Hi Zac,
I would ask you a few more questions before looking at refinancing. Do you have any debts other than this loan? Is it owner occupied or investment? What are you medium term goals and financial needs?
If it is owner occupied and you could get an interest rate below 3.80% there is no benefit in paying interest only just to lower your repayments by a couple of hundred dollars per month.
I would suggest you go and sit with one of these three guys and put everything on the table, you will probably be surprised by what they can get done for you
Best of luck
Scott
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Q: Our home loan has been fixed for 3 years as we wanted certainty in the repayments and haven’t paid off much off the principal.
We want to pay more now but have been offered 3.89% for 3 years. Should we fix again or have a variable rate so we can pay more?
A: Hi Isabel,
Fixing is great for your peace of mind. Depending on your circumstances your broker may suggest a split loan.
If you have the capacity to pay your loan down by $100,000 over three years, you could have a $100,000 variable split and have the rest fixed. This could potentially fulfil both needs for you and save you interest along the way
Happy to have a chat if you would like to discuss further give me a call on 0435.474.498
Best regards
Scott
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Q: I have just set up my own business, what’s the best way to choose a superannuation fund. What questions do I need to ask?
A: Hi Ingrid,
Is this for you to contribute for employees or for yourself? If it is for yourself, you can start by just contributing to your existing fund. If it is for employees, you can pay into their existing accounts as well.
If you are starting a new fund for yourself or an employee, I would choose Hostplus or an industry fund for your business. They have very low fees and are easy to deal with as well as having performed very well over the last 5 and 10 year terms.
Best of luck
Scott
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Q: I work 20 hours a week in my office job and have my own florist business where I operate from home
I’d like to know what I claim for my own business and working from the home office, thank you?
A: Hi Kris,
There are a number of deductions you can make for your home office and many are very specific to the way you operate your business and other factors that would need to be discussed.
You could start at the ATO website as they actually spell out the type of deductions and the records that need to be kept to make a claim
www.ato.gov.au
If you have an accountant, I would suggest you spend $150 to have a consultation and get yourself set up properly.
Best regards
Scott
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Q: I am thinking of buying my first investment property. Would you recommend a negative gearing strategy and have the loan interest only or should I go principal and interest and look to create more equity?
A: Hi Margot,
This totally depends on the rest of your financial situation as well as your age, your appetite for risk and investment goals.
Let’s say you want to invest for capital growth over the long term. It is likely that the highest growth opportunities exist in well regarded, well serviced areas. Properties bought in these areas are typically higher priced and have low rental yields. It is probable that you would be negatively geared on these properties.
If you want to invest for cash flow, you would need to purchase a lower priced property that has a higher rental yield and would potentially be positively geared.
Please discuss with your accountant and adviser but the ideal property in my opinion will meet the market for capital growth whilst providing you with positive cash flow from day one.
The only people who lose money in property are those that are forced to sell. Make sure it is something you can comfortably afford even if things turn a little for you or for the market.
Great to see you thinking of your future
Best of luck with everything
Kind regards
Scott
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Q: Hello, I am new here. I have difficult time deciding if I should add an extension to my home. We definitely need spare room and we have found amazing architects in Melbourne (http://www.superdraft.com.au/melbourne-architectural-services) but I still don't know if this is going to pay off in the future. Any advice, experiences? Thanks
A: Hi Catherine,
Welcome aboard! I am sure the many different experts on here will guide you and assist you to make your decision.
As already mentioned, there is no crystal ball, however comparing the selling prices of the type of house you are planning to build and getting the plans ‘valued’ will give you a better insight.
If you would like, I can send you a suburb report that will show you the median and recent sales prices for as many different scenarios as you would like to compare - at no charge.
Please feel free to give me a call and I can come and meet you and your partner and discuss your plans 0435.474.498
I look forward to meeting you
Kind regards
Scott
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Q: We are finding it difficult to save as we have 4 kids, paying $800pw rent and lived in the same home for 3 years. I earn $120,000 and my wife $55,000 … is there a way to borrow given we pay so much in rent, thanks?
A: Hi Sam,
I agree with Michael, your first action is to analyse your budget and your spending to understand what your priorities are.
A 4-5 bedroom home around Kellyville will likely cost at least $1.1m which means repayments would be assessed at more than $7000 per month which would be inviting disaster.
You could look at homes in a less expensive area and try to utilise a family guarantee but definitely get some help and advice.
Best of luck
Scott
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Q: Can I use funds in my SMSF to invest in a business and are there any limits in terms of how much I can invest?
A: Hi Tony,
As I thought, better to let Brendan advise you. As Brendan says, just because you “could” doesn’t mean you should
Best of luck
Cheers
Scott
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Q: Can I use funds in my SMSF to invest in a business and are there any limits in terms of how much I can invest?
A: Hi Tony,
I’ll leave it to the accountants on here to give you the formal answer but what I understand is no, you can’t invest in a business through your SMSF.
You could purchase a commercial premises in your SMSF provided that met with your documented investment strategy
Cheers
Scott
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Q: We own our home and investment properties worth about $1M ..no debt. I have only been in my job for 2 years so don’t have any long service leave. My wife and I are 57 and in good health and thinking about travelling for 12 months, we have have 50k in savings. Where is the best place to get a return in the rental income while we are away?
A: Hi Nick,
Great to see you in a strong financial position and planning to get out and live a little while you can. I’m not an adviser and would need much more information to help guide your decision. With 12 months or less to invest and not a huge amount of capital to get started, I would recommend something like an ING high interest on-line account. Speak to a trusted advisor and discuss your longer term goals and risk appetite before going too far down the path
Best of luck and have an awesome holiday
Cheers
Scott
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Q: I have tax losses from a previous business and about to set up a company with a new partner. Can I transfer the tax losses across to the new company?
A: Hi Mario,
Speak with your accountant before you set up the company. There are ways to re-structure the existing entity that could possibly allow the losses to be carried forward. If it is a new entity you simply can’t do it.
Best of luck
Scott
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Q: I set up my own marketing business 12 months ago and have just won 3 new contracts which will mean putting more staff on. We have one cornerstone client on a 2 year retainer at 15k a month and would like to ask if it is possible to get a 50k business loan to help fund the new staff?
A: Hi Beth,
Congratulations on the growth of your business. You have very exciting and sometimes daunting days ahead.
Whilst you could potentially get a loan to assist your cash flow, I would recommend you speak with your accountant about the projected cash flow and budgets before you do.
Ideally loans should only be used for growth assets of the business - paying interest on wages is not sustainable.
Be sure to consider outsourcing and contractors as a way of limiting your risk in the short term.
I can introduce you to a couple of great employment compliance specialists who could help you to write contracts, agreements and policies to protect you and your business as well.
If you would like to have a discussion please feel free to call at any time on 0435.474.498
Kind regards
Scott
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Q: My wife and I are quite risk adverse when it comes to investing. We are about to receive a sizeable inheritance of about $700,000 and want to ask if we should buy an investment property or put the money into super as we’re in our early 50’s and both still working?
A: Hi Rick,
You have a lot of researching and thinking to do. I would recommend you call 3 or 4 financial advisers/planners and accountants. Two you know or are introduced to and two you’ve never met. They are all going to want to get hold of your investment, insurance and superannuation and will probably all have different opinions.
For what it’s worth, I’m not an adviser but if you are happy with your current home and you are contributing to super you may want to invest in a couple of moderately priced properties with land (read not apartments). Which you could leverage at around 40% and create a small positive income.
As I mentioned, this is not advice, just an opinion - everybody has one after all.
If you would like a review and some guidance on the finance side of things, I am happy to help at any time.
Good luck with your choices.
Regards
Scott
0435.474.498
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Q: Just bought a pub freehold and we will be owner-operators. We are going through the insurance process and been told we need to insure the pub for 60% more than the purchase price. Does that sound right or would we be paying a higher premium unnecessarily?
A: Hi Michael,
I think that Todd and Brendan are probably correct. A business freehold will rarely sell for the full value of the building and the operating business so you are looking at the full replacement cost.
If you haven’t already, get an insurance broker on the task for you and compare a few more quotes.
Best of luck
Scott
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Q: We are keen to buy in the area we currently live, approx $1.2m. Like to know what’s the maximum you can borrow with and without mortgage insurance, thanks?
A: Hi Angie,
I agree with Jacqui, there is more to understand before giving you an accurate idea of your borrowing capacity. Basically it comes down to two factors, the Loan to Valuation ratio needs to be less than 80% in most cases to avoid mortgage insurance so in your case to purchase for $1.2m you would need $240,000 deposit plus costs of stamp duty etc - around another $65,000.
The second factor is servicing the loan. It is impossible to guess how much you can service so I would recommend you sit with a broker to discuss your full financial situation - Income, expenses, assets and liabilities plus your anticipated needs for the short and medium term.
If you need any assistance please feel free to give me a call on 0435.474.498
Best regards
Scott
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Q: We have a small loan, 150k on our home probably value about 900k and an investment loan for 460k and value of property 600k. We spoke to a broker about refinancing and they suggested combining the two loans into one loan over our home and leaving the investment property with no debt. Is that a good idea?
A: Hi John,
On the surface that sounds crazy! I can’t imagine what their rationale would be other than to try to attract an owner occupied interest rate. I don’t know your personal circumstances but I would expect you are deducting the interest portion of the loan against your rental income.
For diversification, I would be comfortable with you maintaining exposure to two different lenders and keeping the titles separate so that they can be transacted separately at whatever time you need to.
It is also possible to utilise some equity from your family home to purchase another property at a later date of that fits your strategy.
I wouldn’t do it but by all means get another opinion. If you would like to discuss your options and see what we can do feel free to get in contact on 0435.474.498 or visit our website www.mobilelender.com.au
Cheers
Scott
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Q: Is it possible to apply for a commercial loan when investing in a block of 6-8 units (residential tenancy, units registered together as one). I understand there would be a lower LVR in this scenario but just wondering if this is possible.
Would a commercial loan take into consideration my own serviceability from my own personal income?
Thanks.
A: Hi P M,
It may be possible, you would need to provide a bit more information. Are you constructing the units or buying them as a rental income proposition? Are you a builder yourself?
In terms of servicing you can use all verifiable income that is clearly yours such as wages, distributions, investment income and rents.
Sit down with an experienced broker with both Commercial and Residential knowledge and they will take you through your options once they understand more about the deal and your financial position.
Best of luck
Scott
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Q: I have an interest-only loan with Westpac at 4.84% and owe $680,000. If I change to principal and interest what is the best rate I could get without paying an annual fee?
A: Hi Rikki,
As the other brokers have said it isn’t as simple as just giving you a rate. If this is an owner occupied loan, it should be a priority for you to be reducing the principal and subject to a full assessment you could qualify for a loan in the 3’s.
Basic loan products are generally cheaper at subsidiary and second tier banks and have a small upfront fee with no ongoing charges. These can save you if the offered rate is similar. However with a loan of $680,000 a $299 annual fee is equal to only 0.04% so I wouldn’t say no just because of the fee.
Arrange a meeting with an experienced broker and they will spell out all of these choices for you in terms that are specific to your circumstances.
Best of luck
Scott
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Q: I have the 15% plus the cost to buy a property, $850,000 – is there a way around having to pay mortgage insurance?
A: Hi Ben,
Nathan is correct, it may be possible to avoid LMI if you are one of the professional occupations that some lenders accept as lower risk. It may also be possible to go with a lender that doesn’t charge LMI up to 85% LVR, as stated though you generally get charged higher fees and a higher interest rate by these lenders.
If you would like to sit down for a full assessment, I would then be able to compare the options available amongst the 29 lenders that I deal with.
Give me a call if you would like
0435.474.498
Regards
Scott
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Q: We just started to get things in place to sell our unit but we have found a house we would like to make an offer. We don’t have access to funds to exchange on the property straight away so if we apply to increase our home loan from $300,000 to $800,000 could they let us use the funds to exchange?
A: Hi Mary,
Very exciting!
Your loan would depend on many factors but potentially you could purchase the property as you are suggesting.
To increase your loan with your current lender, you would need to be able to show that you can service the increased loan amount and that there is enough equity in the home to stay under the required loan to valuation ratio. If you have time tonight or tomorrow night, I would be happy to meet with you to do a full assessment and explain more about your options?
Give me a call if you would like?
Kind regards
Scott
0435.474.498
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Q: Hi, I’m a small business owner about to buy a new car. What is the luxury tax threshold and what are the implications from a tax perspective if I’m $5-10k over the threshold?
A: Hi Marco,
I agree with Brendan, unless you are in the luxury car business why are you thinking of throwing away thousands of dollars?
If your accountant said you need to spend some money or you’ll get a big tax bill, you need a new accountant.
I’m a finance broker (not an accountant) and I would be suggesting you invest further into the business, into growth/income assets or into Super.
Just my opinion
Best of luck with it
Regards
Scott
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Q: Hi can someone tell me how can I remove commercial default in my Veda report? Is there a way to take to the court get an order to remove it.
A: Hi David,
I understand that a default can only be removed if it is incorrectly applied to you or the stated time has expired since the default was rectified.
If it is wrongly applied, you should be able to have the company that registered it remove it or you can use a company like Credit Repair or We Fix Credit who will both charge you to work on it.
I hope that helps a little?
Best of luck with it
Regards
Scott
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Q: hi, i am a first home buyer and looking at a home for $335,000… what’s the minimum deposit I need?
A: Hi Trish,
Great question! I’m sure plenty of first home buyers are wondering the same thing.
As Tim said you need to show that you have “genuine savings” of at least 5% of the purchase price. There are still a few lenders that will lend you 95% and add the mortgage insurance onto the loan balance.
The absolute minimum then is 5% plus the cost of Conveyancing, mortgage registration and any lender fees. In your example that would be approximately $18,000
If you have any further questions feel free to add them in the comments
Kind regards
Scott
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Q: My parents live overseas and have offered to help with my home loan. If they were to pay something like $1,000pm do I have any obligations or issues in regards to tax?
A: Hi Maxine,
As Stephen has said, you can no longer have a guarantor or third party for the payments on your loan. If you need the assistance of your parents income, they must be on the title and on the loan. Depending on the income type and the country of origin, some lenders won’t accept foreign income for servicing of the loan.
What you could potentially do is have your parents gift you a lump sum to reduce the amount you borrow and then they are not on the title or the loan.
Happy to discuss further if you would like
Regards
Scott
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Q: My wife and I have our own separate superannuation. If we set up an SMSF can our individual super be rolled into the one SMSF so we can buy 2 or 3 investment properties?
A: Hi Kerry,
As Glenn and Brendan have said, this is definitely possible but it is also highly regulated. An SMSF loan is set up as a “non recourse” loan which means the lender can’t take any other assets from your Super fund if it goes bad. That means more risk for the lender and they charge much more for these loans in fees and interest.
I would suggest you get in front of a trusted financial adviser who will map out the pro’s and con’s of SMSF and not just one who sees the $5000 per year in fees they will charge you to administer it!
I am more than happy to discuss and assist you with the lending aspect and to give you some further information, please don’t hesitate to get in touch
Kind regards
Scott
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Q: We’d like to ask about the costs associated in transferring the title of our family home from joint names to one? Do we have to tell our lender and does it mean we have to refinance, thank you?
A: Hi Ingrid,
I don’t know the answer to whether you would incur stamp duty or not but you would definitely have to tell your lender and definitely have to refinance.
From a borrowing point of view, this may cost up to $1000 when you factor in discharge fees and registration of mortgage etc.
I would suggest you get an answer on the stamp duty and any accounting implications first and then see a broker to be sure that the refinance can be achieved ALL before you start any transfer.
Best of luck
Scott
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Q: We are looking to spend about $100,000 on renovating our home. We think it worth about $750k and we owe about $300,000. I have had a lot of experience as a project manager and instead of contacting a builder we want to project manage the renovations and the tradies ourselves. Will that impact our ability to borrow the money for the renovations?
A: Hi Martin,
I also agree with Tim. Meet with an experienced broker who will assess your borrowing capacity and the loan product that will suit your needs and you should then be able to borrow the money you need (subject to verification) to complete the project on your own terms.
Best of luck with the project
Regards
Scott
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Q: Hi,
I’ve been contracting for the same 3 business for 3 years and averaging around $130,000 a year. Will I need tax returns to obtain a home loan or will letters from the business owner be enough?
A: Hi Jamie,
It appears that you are using your ABN to invoice these three businesses rather than receiving payslips from each?
As a self employed borrower, you could verify your income in a number of different ways.
There are many lenders who only need one tax return, however you must also provide the notice of assessment to verify the return. If you haven’t done tax returns the rate will likely be higher.
I would recommend you sit with an experienced broker who will collect all of your financial information to assess and decide upon the most suitable path to take. Your income isn’t the only variable in deciding your suitability for a loan so it is not possible to say whether you will be ok without understanding a lot more.
Best of luck with your search
Scott
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Q: I am employed full time and paid a salary.
On the weekend, I have been paid for photography services that I have provided. I have received $4000 so far.
How do I need to report this to the ATO? At the end of the financial year add this money to my annual income?
If so, is the tax rate 35%? Can I claim all expenses as tax deductible such as, travel, equipment etc.
Thanks
A: Hi Andrew,
These are questions for an accountant but yes, generally speaking you are right. You would be a sole trader and your income is added together and you can deduct eligible business expenses.
You would pay tax at the marginal tax rate for whatever your taxable income is for each year
Best regards
Scott
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Q: Hi, we have 90k in the bank and found a house we want to buy for $710,000. The bank will lend us $639,000 but we would like to spend about $15-20,000 as soon as we move in. Is it possible to get a loan with only 5% deposit and cover the stamp duty. My income is $82,000 and my wife is $75,000, thanks?
A: Hi Eddie,
Very exciting times for you!
As Jacqui and Craig have said, there are many more questions to ask before we can say whether you would be able to do what you propose.
Do you have any dependents?
Do you have any other debts?
What are your current monthly expenses and what do you expect them to be when you live in your home?
I would strongly suggest that you do sit with a broker and discuss all of your current finances and what your future goals and needs are.
Great brokers are looking to work with you for the next 15 years not just “sell you a loan”
Best of luck with the home
Cheers
Scott
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Q: Hi want to invest in something paying more than nabs term deposits were do I start?
A: Hi Michael,
The answer will depend on a lot of factors about your financial position and your short and long term goals.
In term deposits you should be getting at least 2.7%
If you have a home loan, you would effectively earn the equivalent amount of your home loan interest rate and it is tax free
If you would like to consider other investments, I would recommend you sit with a financial planner so that you can weigh up more options including shares, managed funds and property to name a few. These all depend on your financial position, your income and your goals.
Best of luck with your investing
Regards
Scott
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Q: I use a bookkeeper for my business BAS, and an accountant for my tax. The bookkeeper enters all the business data on an Excel spreadsheet which I give to the accountant with the rest of my information. I've discovered that the bookkeeper has made a major error every year (for 6 years) by entering my receipts incorrectly, so I have paid a lot more tax than I should have. The accountant has had the original documents as well as the spreadsheets. Should he have checked the spreadsheet data??Thanks!
A: Hi Meroula,
I have to agree with Brendan. I am a small business owner and I do all of my own Xero each month and prepare my own BAS and quarterly P&L. My accountant has access to the Xero data so he extracts the summaries at year end.
If my accountant was to check every invoice or every entry my $2275 annual bill would be over $10,000 at the very least.
The cost of Xero is $50 per month including payroll and bank reconciliation. A bookkeeper who knows Xero could enter all of your stuff in about 2 hours per month at about $50 per hour.
As for catching up and fixing the previous years, get onto it now so that you don’t miss the opportunity.
Best of luck with your new software and your new bookkeeper.
Regards
Scott
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Q: Hi all,
First time user.
My income is three times that of my wife. We also have kids. We are looking at an investment property and were wondering does it matter who we put our investment property under and who collects the income?
We were also looking at possibly putting the investment property and our principle place of residence in a trust. What would be the benefits of a trust?
I appreciate your help with the above.
A: Hi M R,
This is a deeper question for your accountant or financial adviser. It should take into account your expected time to hold the property, whether it is new or established, the net cash flow and net tax effect.
I’m not an accountant but I would say, if you plan to hold until retirement go 99% in your name so that you can deduct taxable income against your salary and pay CGT after you have retired.
If you are trying to make a capital gain to be realised before you retire, I would go 50/50 to average the tax deductions while you hold and reduce the capital gains tax when you sell.
Get some advice specific to your current position and your goals and strategy before you buy.
If you would like some assistance at all please don’t hesitate to get in touch
Best of luck
Scott
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Q: land Was purchased for $62,000 in 1998.upon divorce in 2003 land was valued at $220,000 which half total was paid to x-wife.now land is valued at $700,000 how much capital gains tax will I pay if I sell?
A: Hi Luis,
As David said you would be facing a significant capital gains tax bill if you sell now. I would recommend you visit a good accountant and find out what would be the outcome if you build on the block and move into it for at least 12 months? I don’t know your situation or the details of the CGT law in your case but it is worth looking at all of your options.
If you would like some contacts, I will be very happy to assist
Cheers
Scott
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Q: My family is about to receive a bequeathment of approx $200K in fully franked shares.
Our house is would be approx valued at 1.1m on the open market and our outsatnding mortgage is $440k.
My personal super is only $50 plus thousand and my wifes approximately $100k
I am 60 years old my wife 55
We plan to firstly cash in shares to repay immediate debt of approx $25k.
Is my (our super) worth topping up at the max $35k each?
Should we keep any shares as is or cash in total to reinvest?
A: Hi Richard,
I’m not an adviser! My preference would be to reduce your mortgage now as that interest is a dead weight on your finances.
Then because you will need to pay $1600 less per month on your mortgage I would top up your super by the pre-tax amount equal to that.
Give James a call or speak to another financial planner to ensure you do the right thing for your long term goals.
Best of Luck,
Scott
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Q: Hi, my name is Roger Francis and I am currently a self employed Handy man with a good income per week of around $2400 including being maintenance person for many organisations and with regular employment.
I ran a cafe which went bust and still hold the lease which is amassing rent at $7000 per month for which I am 3 months in arrears.
I need advice on how to go about applying for a home loan to cover this and future rent and to buy a house at the same time?
A: Hi Roger,
I am sorry to hear that your cafe went south, but I commend you on digging in and trying to get back on your feet.
Have you made a pay out offer to the landlord? I would be trying to negotiate a 3 or 4 month settlement that gets you out of the lease permanently rather than waiting for them to find a tenant. There is no motivation for them to advertise if you keep paying monthly.
A property lawyer might be able to shed some more light on your options.
If you can’t pay out the lease, the rental obligation will stop you from purchasing your home until it is finished so it could even be worth paying more to clear the commitment.
You are in a tough spot and I would highly recommend seeking individual advice
Best of luck
Scott
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Q: Hi. I’m 55 and been operating my own landscaping business for the past 10 years and now starting to think about selling it. The business averages around $120,000 a year but how do I value it, how do I know what its worth?
A: Hi Vince,
It is really hard to value a business that involves a large service portion such as landscaping. Is the purchaser buying contracted income or tools of the trade? What is the net profit of the business when you take out your personal expenses?
I would recommend you call a business broker and have a chat.
Best of luck with the sale and with your next venture
Cheers
Scott
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Q: Hi, my wife has just had a baby and will be off work for 12 months and we would like to get some advice on lowering our home loan payments. The loan is $420,000 and we currently pay $520 a week… the rate is 4.07%. I work full time as a contractor and earn between $1700 and $2,000 a week. Could we refinance or are there other options?
A: Hi Paul,
As others have mentioned there are many options in the market for refinancing or you could negotiate a plan with your lender.
Your rate is ok for a self employed person and depending on the consistency of your income and your living expenses you may or may not get a better deal elsewhere.
I would recommend that you give Jacqui or Peter a call and just see what your options are. It won’t cost you a cent and you will have a clearer picture.
Best of luck
Scott
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Q: Hello, we sold everything (house, etc) 4 years ago and have been living in a caravan, touring and working around Australia, henceforth the caravan is our home. We would like to upgrade to a newer model and I would like to know if we're eligible for a home loan to do this? Thank you. Kind regards, Lea Hickmott.
A: Hi Lea,
Sorry to say, no! You can’t get a home loan (which is backed up by a mortgage) over a caravan/motorhome. You could potentially get a chattel Mortgage, which is similar to a car loan but you would need to meet all of the borrowing criteria in the same way as a home loan.
A good broker will have options for you to consider.
Best of luck
Scott
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Q: With all the scrutiny on real estate auctions, how is it the property owner can still make a bid to buy their own property?
A: Hi Maddie,
Hopefully you have only experienced a Vendor Bid. This is a legal bid to notify to the buyers that the property is not yet at the reserve price and that the potential buyers will need to increase their offer in order to buy the property. This method is designed to help at properties where there is only one serious buyer at the expected price and the Auction would otherwise stop at the first bid.
Only the Auctioneer can make a vendor bid and he/she must state “Vendor Bid” when doing so.
If someone is bidding in the crowd on behalf of the owner, they are breaking the law and they should be reported.
I hope this helps in some way.
For the official policy and related laws I would suggest you contact the Real Estate Institute and ask for help
Best regards
Scott
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Q: Hi,
We have been renting a property for the past 4 years.
It is a one story subdivided terrace house, which shares a block with the adjoining house.
My question arises from the fact that on our rental agreement our property is stated as being '1/4a', however when we attempted to change our address with the voting polls we were informed that '1/4a' is not a registered address only 1/4 is, this is backed up by auspost.
Is this a breach of our rental contract?
kind regards
A: Hi Aaron,
This is a lot more common that you might think. I worked on the Census once before and it happens all the time.
I really don’t know if it is a breach of contract - in an Auction contract a property is described as its title description and then stated “commonly known as number xyz”
If you need to pursue this, I would recommend contacting the REIV first and then a solicitor if you have a case to argue.
Best of luck
Scott
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Q: Hi.
My partner and I bought our first property 5 months ago. Now I need to relocate interstate for a 2 year assignment. I am looking at renting it or selling it. What is the best way to go about it?
Thanks
Jason
A: Hi Jason,
Renting both ways is probably the easiest financially. Two years is generally too small a time period to benefit rom capital growth versus the costs involved so that’s a good choice in my opinion
You may also have to consider if you received a first home owners grant and any implications for that?
Cheers
Scott
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Q: Hi.
My partner and I bought our first property 5 months ago. Now I need to relocate interstate for a 2 year assignment. I am looking at renting it or selling it. What is the best way to go about it?
Thanks
Jason
A: Hi Jason,
Congratulations on getting your first property and on the work assignment. Some of your decision would be financial and some of it personal or emotional.
My thought would be keep it if you can reasonably comfortably afford to. This would keep your feet in the market and make it easier for you returning to Melbourne in 2 years.
Will you be provided property interstate or will you have to rent/buy something there?
If you need to buy, you may need the capital to do it but you would also drop a significant amount in selling.
Happy to have a chat if you are interested to dig a bit deeper
Best regards
Scott
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Q: Hi, We are struggling financially with credit cards & other debts. We can manage comfortably with Mortgage repayments it's all the other debts which are crippling us. I have seen when searching online that you can keep your home & car if you declare bankruptcy? Is this possible?
A: Hi J,
Im not a financial adviser or counsellor but this is my thoughts on it.
As Brendan and Caroline have said Bankruptcy should be a last resort and very rarely a good option. Entering into a part 9 is probably worse.
Make an appointment with a free financial counsellor and if you can make sacrifices and make it work, great! If you can’t, sell up and start again. A bankruptcy will affect you for between 9 and 12 years, making anything from renting a house to holding a credit card extremely difficult if not impossible.
Sorry to offer the bad news but you must act quickly and decisively
Best of luck with it
Regards
Scott
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Q: Hello. I am working on a 2018/19 draft budget for my Marketing team at a new company. I’ve been give a report, which shows these columns
1) 2016/17 Total Actuals...
2) YTD Actuals...
3) Current Budget...
4) 2018/19 Draft Budget... and
5) 2018/19 Variation.
I’m a bit confused as to what each colum means especially 1), 2) and 3).
Can someone help explain. Thx?
A: Hi Lina,
Only guessing but here goes
1. The total spent on marketing last financial year
2. The amount spent so far this year
3. The budget allocated for this year
4. Your budget for next year
5. The difference between expected total spend this year and your budget for next year
Good luck with it
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Q: We are considering whether to buy an established house, or a new home and land package. What are the risks involved when buying a home and land package? Any tips for doing this?
A: Hi Ansopny,
From your previous question, I am assuming that you plan to live in this house. In that case, the main risks and benefits mentioned will still apply.
The cost of new can be up to 20% more than a similar sized existing home just for the privilege of getting a new home and it will potentially take 5 years for the market to recognise that price.
It can take 12 months from start to finish for a volume builder to move in to a home and up to 2 years for a smaller builder or even more. There is a risk that it won’t turn out like you expected.
If you buy established, you can get in to the home in around 60 days and you get what you see. Here, the trap is that you also get its problems that can be quite costly down the track. Get a qualified building and pest inspection on any existing home as part of the contract of sale (not possible at Auction).
My personal preference for an owner occupied property is to buy established where the infrastructure is already in place like schools, medical, transport and shopping.
Best of luck with your search
Regards
Scott
