Ken Olds

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Q: It is reported 75% of Australians over the age of 65 receive the full or part pension from the Government.

Compulsory superannuation was introduced into Australia in 1992 (26 years ago) for employees to have a percentage (now 9.5%) of their income invested into a superannuation fund to help fund their retirement years. The desired outcome was for people to be self-funded retirees as opposed to being reliant on government pensions.

The superannuation industry is a $2.6 trillion dollar industry with something like $26B of fees paid annually.

If after 26 years, 75% of Aussies over 65% are still reliant on the government it begs the following questions

1. Is the current superannuation policy working?
2. Who is really benefiting from the compulsory superannuation regulations?
3. Should superannuation be compulsory or voluntary?

We’d love to get your thoughts and opinions.

A: Interesting question. The current superannuation policy is working in theory, in that it remains a tax effective investment vehicle for most. This however needs to be weighed up with the flat rate of 15% against the tiered rate for an individual claiming the tax free threshold, perhaps there should be a tax free threshold for superannuation earnings also.

The compulsory contribution regime is supported and should extend further to ensure that it captures the self employed also. It is now too easy to avoid the compulsory contributions by changing employment type to a Contractor under ABN.

The biggest issue with Superannuation is the lack of trust from both the Government and the Administrators (Managers). Governments have demonstrated they cannot resist the temptation of dabbling with taxation policy which reduces trust from mum and dad investors. Combine this with Managers who gouge fees for financial planning, insurance and administration and there is no wonder the majority of the population are disillusioned.

How to fix it ?. I'm unsure, but the issue is about restoring trust. Perhaps a Royal Commission (lol).

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Q: Is it possible to guarantee one of kids home loan without having to be on the loan or the property?

A: Andrew. Hi and thanks for your question. In terms of guaranteeing children, this is possible where you are an existing home owner and have sufficient equity in your property. The guarantee that you provide would be for Security only, ie this could cover the absence of a deposit from the children and help them avoid the additional Lender Mortgage Insurance costs involved when borrowing above 80% of the property value.
Your name does not go on the title of the property that your children purchase, however you will have an additional mortgage on your own property.
In terms of servicing the requested loan, the children must be able to support the full borrowing amount from their own incomes. It is not possible to guarantee additional income, only additional security.
As mentioned by others some Lenders do this better than others, so it would be important to meet with yourself and the children to provide you the best solution for your circumstances.
Please give me a call if you would like to talk this through further.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: hi if you put down a 10% deposit on a house in NSW and before the contracts are exchanged you are unable to go through with the sale do you lose the 10% deposit?

A: Under NSW real estate law, you are automatically entitled to a five day cooling off period unless either
1) you sign what is called a 66w Certificate which explicitly waves your cooling off rights or
2) you buy under Auction conditions ( this could still be a negotiated sale post auction)
Post exchange, your contract remains “conditional” subject to cooling off rights provided the above two exclusions do not apply. At the end of your cooling off period, unless you specifically advise of your withdrawal from the contract, it will become known as “unconditional’ and then you are at risk for up to 10% of the purchase price.
Should you choose not to proceed, post exchange and within the cooling off period, the maximum penalty should be no more than 0.25% of the purchase price.
Given you have not been previously advised on these matters, it would appear you would benefit from a no obligation discussion from an experienced Broker
Please give me a call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Hi, we are looking around for finance to buy the freehold of a pub. We will be owner-operators and would like to know if any lender will base the LVR against the property and pub as a going concern only or will they consider the stock if it forms part of the contract of sale, thanks?

A: Rob. Hi. These transactions are normally structured in a way that works best for all parties ie, you should start thinking about one loan for the property purchase, one for the goodwill and then potentially a line of credit to fund stock purchases etc.
you will need to have a well prepared business plan, have the devious trading results for at least three years, some experience in the industry and most important a realistic cash investment or additional security.
If you would like to chat more then please call
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN ((275 536)

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Q: Hi, same question as last year. The RBA hasn't made any changes for 12 months or more so do people expect there to be some movement in 2018 and is now a good time to consider fixed rate options?

A: Jacob, Hi. As mentioned in the above answers, whether fixing is right for your situation is best given following an analysis of your needs and objectives. I would be happy to provide some advice on what rates are available and assist you with any scenario analysis around break even points of making any change etc.
To do this, I would need to have a little information on your situation, therefore should you wish to make contact I could begin working on a potential solution.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Was unable to do performance review this year as my manager resigned & then I went overseas on approved leave. While overseas, HR processed my performance review. When I came back, I told my next level manager & he kept assuring me I had nothing to worry about. But when it came to pay review, I was not given a pay rise. Now HR & management says it was because I was rated below target in performance review. When I disputed, they found small faults which were never mentioned to me. Is this unfair?

A: Hi there. Without being a HR specialist, it sounds very unfair. One thing you need to keep in mind is that your review period should only be reviewed on the pro rata basis that was available (ie ex holidays), however that said if you were never informed of any shortcomings then there should be no reason to not be rewarded ( at least) the average level.
To take the matter further, I would encourage you to assess your expectations based on previous years. If these have all been good, then throw in the discrimination card It is not your fault that your Manager resigned, and do not hesitate to ask why he/she was not requested to complete staff reviews prior to departure (whoops, do we now have Senior Management negligence)
From my view, you have no legal standing, but hoping that these comments provide some thoughts on your next personal approach.
Good luck
Ken

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Q: Looking to build a new home, and want to know if we pay stamp duty only on the land or the total of the house and land package?

A: Anna, hi. Stamp duty is assessed on the value that transfers to your name. Should you be buying the land only and arranging your own builder, stamp duty is assessed on the land value only.
However, if it is a package as you suggest and you are buying the completed dwelling in a package deal from the developer, then stamp duty will be assessed on the entire amount.
Would be happy to chat if you need advice on any finance options.

Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: I purchased a unit off the plan in in Newcastle for $550,000 last year. The property is due to be completed in February 2018 and the local agents have suggested the property has increased by 10% during construction. I used a deposit bond to secure the property and the finance was approved at 90%. As the property has increased to around $600,000 can I borrow 90% which would almost be the original purchase price? Is this possible?

A: Mitchell. Hi. Thanks for your question. If the date of the contract is greater than 12 months, there are lenders that will take into account the actual value as of today, however, given you are borrowing 90% of the purchase price and would have been pre-approved at that level, I would be suggesting that you allow any additional value in the property to reduce the level of Lenders Mortgage Insurance that you will need to pay and retain your finance budget as per the pre approval, or even less if you have managed to save additional funds since that time.
Please call me if you would like to discuss further

Best Regards
Ken Olds
Customers First Mortgages & Insurance.
Finance@AskKen.com.au
wwwAskKen.com.au
1300 ASK KEN (275 536)

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Q: I want to know that I will be eligible to get home loan for the property that will be around 670K in sale price. My annual income is around $63,000 before tax, single income, no dependent and credit card limit is $6000. This will be my first purchasing in property. I can get about $100,000 include all the fees and deposit for the property. Am I eligible to burrow rest from the bank? Is this good idea to buy a home in Sydney with $100,000 that I have? Thanks

A: Julia. Hi. Do you perhaps mean $670k in sale price ?
The figure you have provided could not be feasible with a $100,000 deposit and a purchase in Sydney region.
I would be happy to provide a private assessment, not in this public forum, should you wish to contact me.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
wwwAskKen.com.au
1300 275 536

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Q: Mum recently passed. Their are 4 children - eldest is executor of will, rest beneficiaries. Selling Mums house. Does beneficiaries have any say of how house is sold? Or does only eceutor have say? Does the executor have to keep beneficiaries informed? Can executor sell the house @ low price?

A: Amanda. Hi. I am not a Solicitor, but I can say that the executors role is to act in the best interest of the beneficiaries. If the house was to be sold at below full value, the Executor could be exposed to legal actions from the beneficiaries. Lots of issues to consider, ie your earlier post about drop in value due to easement. Yes, the Agent should have done homework and better informed you in this regard.
The only suggestion ( from outside the fence) is that you suggest to your Brother (the Executor) to obtain a private valuation to backup / support the Agents latest estimates.
Hope this helps
Regards
Ken Olds
Mortgage Broker
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)
www.AskKen.com.au

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Q: I am a health professional, have my practice I have house owned and 2 investment properties, the loan on them 3.5 million with ANZ, my house is debt free worth 2 mil, but it is in a cross collateral security with one of my investment property that has a loan of 2.1 mil, I have a business loan of 830 k with ANZ, my repayments for loan investment 13K a month and business loan 4K I guess the loan is fixed for 2 years , I want to build my house knock down and rebuild for 1.2 Bank don’t lend ?

A: Rob. Good evening. The knock down / rebuild situation with ANZ, in itself should not be an issue, provided you are going through a registered builder with fixed price contracts.
I would be happy to discuss the situation with you, with a view to ending with your home loan separated from the investment securities, ie break the cross colateralisation. I would need to understand more on the values of all properties to better advise you on this, but would be more than happy to chat.
Best Regards
Ken Olds
Mortgage Broker
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)
www.AskKen.com.au

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Q: I have been a contracting engineer for the past 10 years and with the one group until recently. My average annual income is $190,000. In early September I signed a 12 month contract with a new group with the opportunity to increase my income. My wife and I would like to look at refinancing, will this change have an impact? We have a loan of $675,000 and the rate is 4.3%?

A: Shaun. Good morning and thank you for your question.
My initial thoughts are that your change of role should not impact in your refinance opportunities.
This advice is based on three things. Firstly that the line of work you are performing is not significantly different. Ie.Similar role/industry.
Secondly, that there was no significant gap in the changeover (less than six weeks)
And finally, that your Contract employment is not considered as self employment, ie, the employer deducts PAYG tax from your regular payments and you are not issuing invoices under an ABN.
I would be more than happy to meet with you and provide options from the range of Lenders I have access to.
Please give me a call to book in a chat. If you have at least 20% equity in the home, we will be looking at rates of well under 4.00%
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: We are thinking of fixing our home loan, probably for 2 or 3 years. Looking at sites like Finder and Mozo the 2 year fixed options are as low as 3.7% but the comparison rate is 4.6 – 4.7%. Why is there such a big difference and is now a good time to be fixing rates?

A: Kate. This is a very good question. In determining a comparison rate, there is a legal requirement to base it on a loan amount of $250,000 over 25 years. This may not be your actual situation. The other matter is that it will be calculated on ( say) two years of the good fixed rates you are looking at and then the remaining 23 years of the Lenders Standard Variable Rate with their current advertised discounts. This is called the Reversion Rate (post the Fixed Period)
Via a Broker, it can often be possible to negotiate a much better Reversion Rate at the front end of the deal. This negotiation would then bring down the Comparison Rate for your particular circumstance
If you would like to give me a call, I have a good calculator on my web site that will calculate true comparison rates for your circumstance. I would be happy to talk you through it and give you some good options to consider.

PS. I think now is a very good time to be considering a fixed rate, but in some cases it may be best to have a piece of both fixed and variable. Hope to speak soon.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
www.AskKen.com.au
1300 ASK KEN

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Q: Why is an investment loan on a residential unit block viewed as a commercial loan although the income and expenses are viewed as individual as per the tax office?

A: Craig good afternoon. The answer to your question may lie in the size of the development. If the complex of units consists of more than four, then most lenders will consider this as a Commercial proposal.
If you would like to give me a call, I would be happy to get a better understanding of your situation and discuss possible options.
Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Q: I own my old home outright (The house in my name ) we want to knock it down and rebuild a single storey, We are also have our names in a property in which to help our only daughter to buy, Currently we are living in our daughter new home because our old home is unsafe to live in.
My daughter and us have borrowed 1.2mil in order to buy her dream home, my wife and myself total income approx$95k
When my daughter get married how do we obtain a construction h/loan to build the old house ?Rob

A: Robert. Hi. Are your names on title to your Daughters home, or perhaps you have just provided a guarantee under a family equity policy.
If it is the later, there may not be such a problem.
Please give me a call for a chat.
Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Hi we are in a predicament. We live on a big block of land in our current home. We are in final stages with council for an approved DA to subdivide the land and build a new home on it. We will sell the one we are in and live in the new one. Problem is we have no money to finish the existing home, sell it and then build the new one. Once existing home sold we will be laughing however the bank won't lend us money to finish. We are stuck, any advice appreciated?

A: Angela, I would be happy to have a chat to talk through your options, if the interim problem is that you are biting off to much to chew with the construction of two homes. Have you thought of a two step approach where you do the sub division and complete your existing home only. You could then sell and enter the rental market for six months until the new home is built, potentially using largely your own money.
I would need to have a full understanding of your financial situation to advise if this could be achieved, however may well be worth considering.
Give me a call if you would like to chat
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: My husband and I have full time jobs. His income is 95,000 and mine is 72,000 and our home loan is ANZ, $490,000. We just checked our internet banking and the rate on the loan is 4.62% and we would like to ask if that is too high and what should it be. We do have a credit card limit of $5,000 but we very rarely use it?

A: Pam, Good afternoon. Thank you for your question and in short, YES. The rate of 4.62% does sound way to high.
I note that Nathan has mentioned a few ANZ options above that could be relevant for you. With the detail you have provided in conjunction with the Lane Cove area you live in, it would appear that you have ample equity to negotiate a better deal.
I am not too far away from you and would be happy to come and visit and provide you with a free home loan health check. We could start with ANZ and see what their best rate is. If they do not offer something competitive, I have access to approximately 25 different lenders that would all be happy to compete for your business at well below 4.00% for Owner Occupied homes. Some lenders will even offer a refinance rebate that could cover all your costs of any change.
Please take a look at my profile, I trust that you will see I am an experienced operator who will work in your best interests.
I can be available to meet at your home during the day / evening and on most weekends.
Please give me a call for a chat.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: I have saved $28,000 and found a unit I would like to make an offer on… around $600,000. My income is $110,000 and the mortgage broker I spoke to suggested a family guarantee loan but when he found out my parents had a loan on their property he said it wasn’t possible. Their loan is only $90,000 and they have plenty of equity. Is what the broker said right and are there any other options available?

A: Nick. Hi. Thanks for your question. With the level of equity in your parents property it should be possible.
There are three options.
1) you go with the same lender as your parents
2) your parents refinance to the lender you prefer
3) you choose a Lender that will take a second mortgage on the parents house.

Each of these options have further points to discuss, but would be happy to take a call from you for a chat.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: The bank just cut our rate from 4.52 to 4.35 and gave us the option of lower payments or keeping the payments the same as we have now. We are comfortable with what we are paying so does it mean paying the loan off earlier?

A: Anton, Good morning. As mentioned already, by maintaining your existing instalment amount with a lower interest rate, you will steadily reduce the overall term of your loan and should have access to redraw the funds as your advance payments start to build up.

I do note, however that your new rate of 4.35% still seems quite high (particularly if this is for an Owner Occupied home).

If you have been in the home for a little time and built up some equity you could be looking at Owner Occupied rates of well below 4.00%. It could be worthwhile meeting with a Broker and performing a 'health check' on that existing loan.

I am quite close to yourself and would be happy to visit you (day/evening/weekend) to provide you with an overview of the current market and assess your best options.

Please take a look at my profile and give me a call should you wish to set up a no obligation / no cost chat.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: We have two young kids and wanting to get into a home on Sydney’s North Shore. Our budget is $1.6m and the lower north shore seems out of our reach so we wanted to ask if there are some areas further north we should look at?

A: Stephanie, Good morning and thank you for your question.

As part of the service I offer, I can provide my clients with specific property reports for an individual home or the median prices across a range of Suburbs. These reports can be very helpful in determining where you might start looking. Keeping in mind of course the Suburb reports are based on averages.

I do not charge for my Broking services and would be happy to meet with you to assist in working through your objectives and perform a calculation of your borrowing capacity.

Should you like to book in time for a chat, then you are welcome to review my profile and give me a call.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: I live in Sydney and can’t afford to buy where I want to live. I would like to get some advice on regional areas where I could buy and use the rent to pay off the loan. Where would you recommend and why, thank you?

A: Vicky hi. I agree with Albert. While a technical analyses could get you into the market as an Investor, it could place your personal objectives, to live in your own home, many years down the track.
If you would like to have a no obligation discussion from a trusted advisor then please give me a call.
Best Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN (275 536)

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Q: I’m a lending manager for one of the major banks but thinking about becoming a mortgage broker. Can I ask about the challenges mortgage broker have at the moment, which aggregators you would recommend and what do I need to consider in relation to the commission structures?

A: Tina. Hi. Thanks for your question. This is not one that I feel suitable to respond to in a public forum, however as an MFAA Accredited Mentor it is something that I would be happy to meet up over a coffee and discuss.
If you would like to take up this opportunity then please give me a call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Business question... I'm thinking of leaving my employment and becoming a contractor. I think I have a handle on the things I need to be considering but would like to get some advice from people running their own business on how they found it starting out, what they didn’t expect and what they found work for them? Thank you

A: Tony, Good afternoon. What a great question and you are very wise in seeking some input prior to leaving your PAYG employment. I could give you a little information in terms of both advice and experience. From the 'Advice' side. the most critical thing to keep in mind is that should you need to borrow money (home loan etc), that Lenders can be very tough on self employed applicants. For example, most Lenders will want to see the business being in existence for a minimum of two years. In terms of assessing your income this can often be an average over the last two years, although there are some Lenders that will look at just one years taxation returns. Please also keep in mind that any lending assessment is based on your Net (taxable) income, and not gross business turnover, unless you are prepared to consider higher rate low documentation loan options. So, advice number one, If you do need to borrow some funds, then do this prior to leaving the PAYG job.

The next piece of advice (from the experience point) does flow on from above. That is you need to be able to fund your living needs during the start up period of the business. Most new business ventures take time to generate solid income and you will need a nest egg to get you through any start up period.

The third piece of advice that I might throw in is to be very comfortable about what you are offering on a personal basis, ie what will differentiate your business from the pack. I find that there are two key angles, one is the 'sales' angle and two, the knowledge / skills angle. You have not mentioned the type of business you are considering, but it is very important to make a self assessment as to which of these two angles you are best at and how you close any gaps you feel may exist. Of course a combination of both, will lead to more success.

Hope this advice helps and all the best with your new venture.
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: My husbands a builder and we want to extend our home loan to renovate but for the bank for some reason is taking forever to approve. We are thinking of refinancing but first wanted to see if other banks will look at our loan and building plans?

A: Bec, Hello. Thank you for your question. There are many different ways that Banks will treat your request which will essentially come down to the size and significance of the renovations that your are undertaking. If you have informed the Bank that you are making significant structural changes, then your Husband would be viewed as an Owner Builder and would come under some pretty strict controls that can be in place for Owner Builders. There are some Lenders that could be more flexible with how you can withdraw equity from your property for worthwhile purposes, however it will depend on the value that you are requesting and the overall value of the home as it stands now.
Also keep in mind that should you wish to change Lenders and have already started the renovations, this could detract from the Valuation and impact a Lenders decision also. Lenders do not like half completed properties. Please give me a call and once I understand your situation in more detail I could give you some advice.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: This is about tax incentives - I currently live in a an apartment property that I have paid off to a degree but want to utilise the equity to buy a house. I understand that I can borrow 80% of the current properties value but unsure what sort of tax benefits I am going to be able to claim? Thanks in advance for your help.

A: Aaron. Thanks for your question. You can certainly use the equity in your current Owner Occupied property to buy investment property. The 80% level is not necessarily a limit but could turn out to be good advice.
Just because you choose to do this, it does not suddenly turn your Owner occupied property int a tax deductible situation. The tax benefits are around the 'purpose' that the funds are used for and not what underlies it as security.
Your investment property and all associated transactions would be tax deductible ( regardless of security used).
When you borrow against your own home for the deposit, take the money as an additional loan split, so your Accountant can easily determine the tax deductible and private debts
I have one lender who would set up the loans on your Owner occupied property at Owner occupied interest rates, even though you will use the money as a deposit on an investment property.
Please call me to talk through a detailed structure and obtain some lending quotes.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Is the LVR the same for purchasing commercial property through a SMSF as it is via normal channels?

A: Michael. The short answer to your question is 'yes' the LVR for Commercial property will be different. The standard lending margin for SMSF's has reduced from 80% to 70% (residential properties) for many lenders.
In the Commercial space this could be down to around the 65% level, however for a Commercial deal, I would canvass a few different lenders to see what could be available for you.
If you would like to chat, please give me a call and we can talk through the options.
Best Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN

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Q: My partner and I are earning good money, 120k and 80k and pay $1,100 a week rent. We have found a property we like and want to ask if it is possible to borrow 100% of the property, about $820,00?

A: Emily. As Nathan has mentioned, a 100% loan would only be available if a family member ( usually Parents) would be prepared to offer a security guarantee.
If this is a possibility for yourself, then please give me a call to discuss further.
I operate on a mobile basis and could meet with you to discuss.
Hope to hear from you soon.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Our credit history isn’t good because of a struggling business but all debts have been cleared. I have had a full time job for 2 and half years and my wife for 18 months and we want to see if we can buy a new home. Will our credit history stop us from getting a loan, what deposit will we need as we have around $60,000?

A: Jordan. Good morning. I would be happy to meet with you and discuss your requirements. Your credit history may not prevent you from getting a loan, however it may not be at prime interest rates. Keep in mind that if you pay a higher rate for now to get into the market, it does not have to be forever, you can refinance to better rates when the history is clear.
I would need to know more information as to whether your credit history involves just defaults, court judgements or bankruptcy.
Please give me a call if you would like to chat / arrange an appointment.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: How much should I pay for a 3 x 2bdrm block of Torrens title units that are currently uninhabitable and require a 6wk cosmetic renovation ($100k) for a combined income of $900/wk post Reno?

A: Bel. Good morning. Thank you for your question. The answers thus far around valuation and percentage yield hopefully gives you some guidance. I thought I would just add a comment from a Broker / Lending position.
You say that the units are currently uninhabitable, but only require cosmetic renovation. These terms potentially seem at odds. If a property is truly uninhabitable, then most Lenders will refuse to accept it as security regardless of value ( are they vacant at the moment ?)
It could be worthwhile having a chat over this as well as your longer term intentions for the properties. Are you going to fix them up for a quick "flip" (resale), or are you looking at this as a long term rental investment. The answer to this may determine the best form of finance that you might require.
Please give me a call if you would like to chat.
Best Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN (275 536)

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Q: If the agent accepts our offer and we request a finance clause aren’t they obliged to include the clause in the sale contract…. the agent is putting us pressure to exchange?

A: Aleisha. Hi. Thank you for your question. The standard process in NSW (non Auction) would be to have a five day cooling off period unless you sign what is called a 66w Certificate, which waives your rights to cool off. It is often possible to request the cooling off to be extended to 10 days, this then allows time for finance to be formally approved (assuming you are already Conditionally approved) and also time for pest and building etc.
if you exchange under these conditions you will be asked to pay a 0.25% non refundable deposit. This is "at risk" money, should you not proceed for any reason.
The benefit of exchanging in this manner is that it removes the property from the market and prevents you from being Gazumped. Without an exchange of contract, the property can still be viewed and open to offers from others.
I recommend you make an appointment to see a Conveyancer / Solicitor asap to get full advice.
Hope this has been helpful.
Best Regards
Ken Olds
Director
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: I’m a first home buyer and would like to know how to plan ahead for rate increases. Is there a way to calculate or budget to make sure I can still make the repayments?

A: Nikki. Hi. A good question that is very sensible to be asking.
When A Lender considers your loan application, they will build in a number of buffers in regard to your affordability. The first thing that they do is consider that interest rates may rise. Most banks will assess your affordability at a "stress" rate of between 7.25% and 8.00%. With actual rates on offer at around ( or below) 4.00% , this is a very big buffer.
Further buffers can also be applied if you are relying on overtime or allowances as part of your income.
In short, if you calculate your personal expenses carefully and can pass the Lenders calculation, you should be OK.
As part of my Broking service, I would be happy to model some scenarios to fit your personal circumstance.
Please give me a call if you would like to chat further.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Today the RBA decided to leave the cash rate at 1.5%.

The cash rate has not moved since August 2016 yet the banks have repriced a number of their loans in Dec 16, March 17 and again in June 17. The three rate increases (most recent by 0.30% on interest only loans) will conservatively generate in excess of $150M in additional revenue annually for each bank.

We all, along with the federal government need to be asking why? It'd be good to generate some discussion.

A: Paul, a very good question. The increases are quite absurd, and while some funding cost increase may have occurred it would not be at this level.
The Banks appear concerned how they are going to pay the .0.6% levy recently introduced. I feel it is already well paid for.
The issue is one of meeting government introduced "speed limits" on both investment and interest only lending. ASIC have supposedly been given a mandate to monitor Bank rate changes, they should immediately force every lender to publicly state their position against the required speed limits and make this a part of the quarterly profit updates that Banks provide. At least by doing this it keeps consumers informed and provides a much more transparent view than what the Banks are currently announcing to there customers.
Banks are very reluctant to provide this information on a voluntary basis. The regulators need to be stronger against the banks, not just let this pass to the consumer.
Regards
Ken Olds

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Q: Looking to borrow about $670,000 and a broker has quoted options of 1.3% off one of the banks standard rate and rate from a non bank called loanave. There doesn’t seem much difference between the loan but the rate is 0.26% lower - is it a safe decision to go with the non bank?

A: Jas. hi thanks for your question. As a mortgage broker myself, I have access to both Bank and non Bank Lenders. I do not believe thee is substantial risk in going with a non bank lender. Keep in mind you owe them money, not the other way around. I am not familiar with the Lender you mentioned however, if you are concerned, I would simply say keep all the money in the loan account and not run a separate offset facility that holds you 'savings'.
In advising my clients, I tend to suggest you ignore the level of discount offered. The important comparison is to use the Comparison Rate which will incorporate the discount plus any possibility that this may only be for an introductory period.
If you think worse case and a Lender went down, the first thing that would happen is they would on sell the loan and you may then find you are with a Lender that is not necessarily your own choice. if you are in order with your loan, they cannot call up and sell your house.
If you would like a second opinion on options available, I would be happy to take your call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Hi, I'm 26 and looking at investing in the property market.
I recently just received a substantial inheritance which I was not expecting. As great as this is, I'm a carpenter and have zero financial literacy about me and I don't want to just piss it up the wall.

I'm looking at getting some solid advice about purchasing real estate, what I should be looking for, how the whole system works, etc

Honestly. Any advice would be great?

A: Essh. Thank you for your question. As an accredited Mortgage Broker with many different Lenders, I am qualified to give you advice from a Credit perspective in regard to home loans. However, for your situation I would suggest that you book in with a good Financial Planner to determine if this is the best option for you.
Once you get the plan in place, and assuming it may involve borrowing for some property, I would be happy to chat with you on the available Lending options.
Hope this helps
Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Parents are thinking about buying into a retirement village and we would like to get some advice on the options and the contractual arrangements they need to be aware of. In one discussion it was mentioned they would lose up to 40% of the property when it came time to sell. Is this considered normal practice….. are there other options available?

A: Peter. Hello. I only have experience from my own Parents situation, where a daily accomodation fee existed for the first five years. Following this no further funds are deducted. You would need to check the contract if this equated to 40% of the entry price. Once the property is no longer required, it is returned to Retirement village at purchase price less the accumulated daily living allowance.
I recommend you take the contract to a local Solicitor for detailed advice on the contract to entered into.
If you need access to finance, I would be happy to chat.
Regards
Ken Olds
1300 ASK KEN

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Q: My partner and I live in her house and my property is rented out. If we buy a property to live in and rent the other two out, what is the best tax effective structure?

A: Con. Hello. The tax structure that you would need to follow is perhaps largely already in place due to the ownership of the existing two properties that will generate investment income. Purchasing of a new home to live in will not bring additional tax benefits while you are living in it. Perhaps if it is likely to become a future investment, then some tax advice would be wise.
For your partners home, you should seek some tax advice around depreciable assets and a Capital Gains Tax base. This will affect the baseline of future tax calculations, but is not necessarily an issue of structure.
If you need any advice on borrowing options, then please give me a call.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
www.AskKen.com.au
1300 ASK KEN

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Q: I’m looking at buying a property for long term investment and capital gain. What are the factors I should be considering and would a new unit off the plan be a better option or an older house with land?

A: Marcelo, Thanks for your question, however without the benefit of a Crystal Ball, it is one that has no accurate answer. If you consider the facts (particularly in the unit space of Sydney and Melbourne) there are plenty of reports available that discuss the high level of new units that will 'come to market' over the next eighteen months / two years. According to many experts this oversupply situation has a real potential to put downward pressure on the unit market over this period.
For those who are considering this type of investment with just the 'bare bones' 5% deposit and no ability to raise additional cash, I am currently advising that they stay out of this market (particularly now that existing properties in NSW have the same stamp duty concession for First Home Buyers).
For other borrowers a reduction in value of the future unit, may see them enter into an area of paying Lenders Mortgage Insurance which may not have been budgeted for. In this area it is important to look at borrowing capacities to see if this additional cost could e absorbed.
This whole area of financing is commonly referred to as 'Settlement Risk' in the marketplace.

So is buying property for a long term investment a bad idea ?. I do not believe so.

At the end of the day, there are only three types of investment (Cash, Shares and Property). Any other type of investment that you may view is either a hybrid of these or has these elements as their underlying backing. Don't get me wrong, you still have plenty of variations with International versus Domestic and Commercial versus Residential options etc.

Property has demonstrated itself to be an excellent option when historically viewed over the long term. In considering if this is right for you, you should discuss with your Accountant as to the taxation implications and then a Financial Planner to ensure it is the right investment for both your short and long term needs. If this is the case, you then should seek out the services of an experienced Mortgage Broker to help you work through the myriad of lending options available and find a product that suits your needs.

Hope this has been helpful.
Best Regards
Ken Olds
Mortgage Broker
Customers First Mortgages & Insurance.
1300 ASK KEN

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Q: Are there lenders or other options available instead of having to pay mortgage insurance …we need to borrow about 84 -85% but the insurance is so expensive?

A: Madly. Hi. There are Lenders that will go to 90% without Mortgage Insurance if one of the borrowers is in a Specialist occupation ie Doctor, Dentist etc.
if you would like to touch base with me, I could advise further.
Regards
Ken Olds
1300 ASK KEN

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Q: Can we claim immediate deductions for the cost we incurred by removing old carpet, repair ing floor board , sanding and polishing the floor in our rental property?

A: John. Hi. I am not a tax accountant, but the key word you used is "repair". The general rule is that repairs on a like for like basis are fully tax deductible. However, if the repairs constitute an improvement to the property beyond what previously existed then this should be considered for depreciation rates only.
Take the example of a damaged kitchen bench top in laminate. If replacing with laminate then it is a repair. If replacing with granite then that would be an improvement. Always best to discuss with your Accounted as to what can be tolerated by ATO before undertaking the work.
Hope this helps
Ken Olds
1300 ASK KEN

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Q: A builder has given us the options of a fixed price contract for our renovations or cost plus and we would like to get some advice on the cost plus option. Do people normally choose cost plus and how realistically can we monitor all the costs and hours worked? Is there anything else we need to take into consideration?

A: Yasmin. A cost plus model can be like a run away train. If you need to borrow money, the Lender will insist on a fixed price contract, unless you apply for an owner builder licence which has a number of other potential problems
Please call me directly if you need detailed advice.
Best Regards
Ken Olds
1300 ASK KEN

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Q: Hi easy is it to find a low interest loan for investment property without the attached application fees and not many fees and charges involved with added bonus features of a package with a credit card?

A: Maria, Hello and thank you for your question. As you are clearly aware, there are now premium rates in place for investment lending. Even more so, should you wish to consider an Interest Only option. I recommend that you look at some of the fixed rate offers in place at the moment, while the better options will most likely still have an annual fee, you will be obtaining some certainty for a period of time in a very uncertain market right now. Keep in mind that we are still at (or close) to historically low interest rates.
I have access to more than 25 different Lenders, if you would like to view some options suitable for your personal situation, then please give me a call.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)
www.AskKen.com.au

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Q: Looking for advice around the best potential structure for a company so that its assets are protected. Some accountants have suggested:

1. Setting up a private company and allocating its shares to a discretionary trust
2. Setting up a private company and allocating its shares to a discretionary trust where the trustee is a private company
3. Setting up a private company and allocating its shares to a discretionary trust where the trustee is another discretionary trust

Which do you recommend?

A: Just another thought to keep in mind, is that if you are seeking protection from a Lender against he assets in these structures, is that it is the norm for the Lender to ask for a personal guarantee to the liabilities of the borrowing entities.
Therefore, while you may have separation from a legal sense, you can still be sued and have your personal assets at risk under any guarantee that you provide
This would only benefit the lender and other claims/representations could be protected as advised.
Just a thought to keep in mind.
Regards
Ken Olds
Mortgage Broker
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: I heard a radio ad promoting Australian biggest home loan sale with Rate City. Is this just marketing ploy for the banks or will they actually be able to help borrowers get people better rates.

The ad said the sale goes for 40 hours, does anyone know how it works?

A: Tom, Good morning. In short this is a bit of a gimmick. The eight Lenders taking part are Community First, HSBC, IMB, ING DIRECT, Mortgage House, Reduce Home Loans, State Custodians, and loans.com.au.

People interested in the offer are told that they must self check the Lenders policies to determine if they qualify. A Credit Check will be performed once you register your interest and should you not be eligible, or simply find the products to be unsuitable, this will be a negative impact on your credit report.

There is a strong argument that this campaign is being performed in contradiction to the requirements of the National Consumer Credit Protection Act (NCCP). Under this Act a Credit Representative / Licensee is required to conduct a Needs Analysis and ensure that the product being recommended is not unsuitable, however here we have Rate City pushing through applications and performing credit checks without the proper preliminary work being performed, all under the disguise of what is described to be the "lowest ongoing variable rate". Given this cannot be guaranteed this terminology would also be a breach of the NCCP.

If ASIC were on the ball this campaign would be closed down before it commences.

If you would like a proper health check on your existing loan with recommendations that suit your personal needs then please give me a call. I will be happy to visit (over 30 Lenders available).

Best Regards
Ken Olds
Customers First Mortgages & Insurance
www.AskKen.com.au
1300 ASK KEN (275 536)

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Q: Hi, I’d like to ask the industry experts on simplyaskit about their opinion on the discussion about first home buyers being able to tap into their superannuation as a means to come up with the deposit to buy their first home. Is it a good idea and should there be any conditions or restrictions to accessing their super?

A: Hello Sophie. It is a very challenging question that you ask. On one hand there is "it is my money, why can't I use it" question. Then on the other hand, the superannuation funds are needed for your retirement.
While as a Mortgage Broker, I will admit having access to Super funds would make it easier for me to write a loan, I am going to say that I am against this idea.
Putting a couple of things in perspective, to have sufficient funds in superannuation to do this would require at least 10 years in the workforce. If this is the only way to demonstrate savings, then potentially the loan is unaffordable for that individual.
What the lobbyists should be working on is the abolition of Stamp Duty. This is the most unfair tax ever, where the ones who can afford a home loan pay double tax ( we already pay based on our income)
There are arguments that this will just push up Vendor demands however market conditions would quickly see this disappear.
If you would like to contact me for any additional advise ( from a 40 year professional) then I would be happy to chat one on one.
Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN

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Q: Why would this condition take so long to approve or deny?

A: Fabian. Hi from what you have mentioned it appears you are either waiting for a discharge and refinance of the guarantors property or perhaps a consent to a second mortgage. Your mortgage Broker should be able to inform you which it is. You have not mentioned the Lenders involved, but my experience is that either of these can take 10-15 days. I would never have suggested 48 hours.
I could not advise you on any alternate options without knowing a lot more information for yourself and your guarantor. The best thing I can suggest is that your Guarantor phone their bank and try to speed things along.
If this was all started at the contract signing stage, and you have a standard six week contract then you may be OK with the required time.
Check with your Solicitor / Conveyancer and keep them informed. They will be able to advise on the implications of going overtime on your settlement.
Good luck with it all
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Hi,
I have a joint home loan with my wife Of 400k that is linked to a offset account with 400k in it. My wife is not working now due to pregnancy and will not be working for a number of years.
We would like to purchase some shares in her name (because of her now low income) around 150k worth. Can she claim the interest on the 150k taken from the offset account. Can she claim all interest keeping in mind homeloan and offset are joint? someone mentioned me lending her the money? Loan structure?

A: Peter. Hi there. This is definitely one that needs tax advice, have a chat to an Accountant, but I suggest you consider a Margin Loan in your wife's name that could be funded from your offset account with a much smaller amount.
Hope this helps
Ken Olds
Mortgage Broker
1309 ASK KEN

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Q: When making an offer on a property where should your initial offer come in at?

A: Nadene, Good evening. Thank you for your question. However unfortunately there is no right or wrong answer for what you asking for.

The important thing is to do your own research. As a Mortgage Broker, I have access to an automated valuation system that provides a pretty good guide for most areas right across Australia. I simply need to know the property address and can then give you information on when and what that property last sold for, plus recent sales of comparable properties in that local area.

One key of course is to keep in mind that when you give an offer, it may not be accepted, but what you really want is to be close enough to draw a counter offer to gauge where the Vendor is at. A ridiculously low offer can often be deemed as an insult and the Vendor may choose not to deal with you at any level whatsoever.

If your offers are genuine and within a range of some decent research, you should be able to keep the conversation open. At the end of the day, this is what you are looking for.

Hope this has helped and give me a call if you would like any further specific information / advice.

Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)
www.AskKen.com.au

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Q: We are currently looking at a 4 bedroom home in Engadine for $940,000 and have $150,000 to cover deposit, stamp duty and legal fees. My husband’s income is income is $136,000 and I work permanent part time and earn about $67,000. We have 2 kids under 10….. no other debts and would like to know how much we might be able to borrow, thank you?

A: Anne. Good morning. There are a number of variables that we need to consider, which would need to cover a suitable amount for living expenses, the purpose of the purchase (owner occupied or investment) and the most suitable term for the loan.
There are then two answers to your question. First being the level of income to support the loan. You appear very strong in this case (potentially over one million). The second is the amount of deposit you have to complete the purchase based on the maximum borrowing levels against the security. With $150k however this could also exceed one million, dependant on your appetite to pay a Lenders Mortgage Insurance premium.
I would be happy to make an appointment to work through these figures in more detail and answer all of your questions.
Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN (275 536)

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Q: hi, with a new investment property is now a good time to be fixing rates and can you fix an interest only loan?

A: Michael. Thank you for your question. It is not possible to give you a perfect answer on the question "is now a good time", however it can be said that we are at historical lows for interest rates generally and that we are seeing Lenders in recent days start to raise investment rates. So we can certainly say that things are trending upwards at the moment and giving some consideration to fixed rates would be prudent.
In regards to the interest only part of the question, the answer is 'yes', however some Lenders will have an additional premium for interest only.
Please give me a call if you would like an overview of the current available rates.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN
www.AskKen.com.au

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Q: HI ME AND MY WIFE ARE IN OUR MID 50S WE NEARLY OWN OUR HOME WE HAVE ANOTHER PROPERTY WITH A GRANNY FLAT WE STILL OWE AROUND 35% OF THE PROPERTY VALUE WE WANT TO SELL OUR PRINCIPLE HOUSE AROUND AGE 60 TO PAY OF OUR DEPTS AND HELP OUR CHILDREN WITH A DEPOSIT FOR A PROPERTY WE WANT TO MOVE INTO OUR INVESTMENT BECAUSE WE WANT TO RECIEVE THE PENSION?

A: Rudi. Good evening. Thank you for your question. In regard to moving into your investment property as a place to live, particularly while the Granny flat stays leased, is something to get some good financial planing advise on from someone very experienced in the Capital Gains Tax arena.
In regard to helping your children, it appears you would have sufficient equity in the investment property to assist in a Guarantor capacity right now.
Your children would need to be able to support the loan repayments under there own steam and your guarantee could cover for the abscence of a full 20% deposit.
Please give me a call if you would like to discuss this in more detail.
Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN
Finance@AskKen.com.au

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Q: A couple in our community hold a private fundraising event each year. They ask local businesses for donations in the form of vouchers to raffle off. Attendees buy tickets with cash and this covers the days activity, food and alcohol. A cheque is then presented by the couple through their business name to the recipient. The couple then claims the amount donated on their taxes. Is this legal?

A: Sarah. Hi. Thanks for your question. I am going to answer from a commoners viewpoint, as I note no on else has yet provided a response.
The concept of a business writing a cheque as a donation to a registered organisation and claiming a deduction would in itself not be a problem.
The issue lies in the aspect that they are collecting money from the public and then serving (selling) alcohol. To collect money from the public under the pretence of a community fund raiser would normally require to be registered with the designated organisation. This would mean that a receipt is to be issued to the person paying, for them to claim for there donation (not for the organiser to claim all deductions).
By collecting money in return for the provision of alcohol requires you to hold a liquor licence of some form.
I would suggest that several laws / regulations are being breached here. It would only take someone to complain to potentially have a very sticky investigation being commenced.
Would be good to have some input from the Taxation experts on the panel in this regard.
Should you have any needs on the home financing front then please give me a call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Im in the building game, just wondering if when invoicing, do i charge Tax on the whole of the price (labour and materials) or just gst on the labour alone, as materials have already had tax applied at time of sale from my supplier, meaning the taxman would be getting a double slice of pie as tax then has been applied to the materials twice?

A: JB. Hi. To make things quite clear, it is called a Goods & Services Tax (GST) for a very good reason. It applies to both the goods and services you provide in dealing with your customers.
In regard to the goods you purchase for the final delivery to your clients, you are entitled to claim what is called an Input Tax Credit. The end result is that by the time each person ( in the business supply chain), charge GST and claim their Input Tax Credits, then ( the net) GST is only paid to the Tax Office once by the end Consumer.
If you are unsure on any of this, then I recommend you engage the services of a good bookkeeper, else you run the risk of some nasty surprises from the ATO
Regards
Ken Olds
Mortgage Broker
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: How often should I review my mortgage?

A: Kerry, Good morning and thank you for your question. There are many experts (and I am in agreement with them) that suggest you should review your mortgage at least every two years (or at the expiry of a Fixed Rate term).
Lenders continuously introduce new and repriced products for "new customers" to keep a competitive edge in the market place. If you are not benefiting from these competitive advantages then it may be possible to change Lenders and save some significant money.
Prior to changing however, it can also be a good idea to ask your existing Lender to consider a more competitive rate so that you avoid the costs of changing to a new Lender.
Some Lenders (on certain products) will offer to reimburse enough money to cover your refinancing costs.
A good Mortgage Broker will work with you each couple of years to provide you the market information you need to determine if your current Lender remains the best option for you.
Should you wish to touch base with me, I would be happy to provide you a quick comparison over the phone and then we could decide if it is beneficial to meet for a more detailed conversation.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)

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Q: Not so much a question but a comment

A good friend has been with the one lender for 10 years and after 4 weeks of hesitation they finally called the bank about the interest rate on their home loan.

One call and 5 minutes later the bank had dropped the rate from 4.75% to 4.09% - the 0.66% rate cut will save them thousands

I’d love to get some feedback if anyone has had or knows of a similar experience - please share

#simplyaskit?

A: Paul, good morning. This can happen quite often, in fact just this week, I was successful in getting a client paying 4.65% down to 3.83%. ($800k Loan). The change was agreed to via a short email to the Lender even though I am not the assigned Broker to this client. The change is currently being processed and clients are very pleased.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
wwwAskKen.com.au
1300 ASK KEN

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Q: I’m trying to help one of my kids buy their first home and want to get some advice on the options available. Can I just be a guarantor or do I have to be on the loan with them and what else do I need to consider?

A: Peter. Good evening. Thank you for your question. Just to clarify with information already provided, you can assist your Son with a Family Guarantee that would cover any shortfall he may have in the deposit.
From the loan servicing perspective, your Son has to be able to demonstrate that he can afford the loan, by passing the Lenders income test.
The guarantee could be backed up by a mortgage over your property or via the lodgement of cash that would be held on term deposit.
Please keep in mind that passing the servicing test will not necessarily lead to an approval. Your Son is about to take on a large commitment that will require him to meet the regular repayments. If he has not shown a pattern of savings (or having a current rent commitment that is about to cease), some Lenders will classify the risk as unacceptable.
Perhaps your Son has sufficient savings to cover stamp duty and Legal's ? This is the preferred scenario that the lenders will look for.
As another alternative, where your income could assist your Son to get a foot in the property market is to consider an investment property in joint names. Your Son will be in the market, but this type of transaction needs to be planned carefully to ensure it fits with each of your long term goals.
Please give me a call if you would like to talk through the many options.
Best Regards
Ken Olds
1300 ASK KEN (275 536)

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Q: My partner and I are looking to merge our finances (we aren't married, but have two kids and have been together for five years). We both own investment properties and I have shares in the business I work for. Any tips?

A: Al. Good afternoon. With a five year relationship and two children, you guys are definitely a couple. Some people may suggest an agreement between yourselves acknowledging who introduced what values to the relationship should it ever end, however with Children involved, my experience is that such agreements are not worth the paper they are written on.
From a borrowing status, there is no difference between married or de facto.
Should you be thinking of putting each other's names onto property titles held in a single name, then I understand that you can get stamp duty exemptions. Please take both legal advice and also taxation advice on this, particularly if they are investment properties.
Should you have any need for financing or even a health check on the existing loans, then please give me a call
Best regards
Ken Olds
1300 ASK KEN

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Q: I often see banks and car loan providers advertising their comparison rates. What exactly is a comparison rate and is it the best way to compare mortgages and loans?

A: Tom. Hi. Thank you for your question.
The comparison rate simply prices in the standard fees charged over the life of the Loan and converts this back to an overall interest rate. The concept allows you to compare all lenders equally.
It is s legal requirement to quote comparison rates on a 25 year loan term. If you do not intend to stay in the loan for that period, then it may not be the most important thing to look at.
Give me a call if you would like more info
Regards
Ken Olds
1300 ASK KEN

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Q: We had home was valued last week and the valuer was in the house for no more than a couple of minutes. The broker said the lender arranged the valuation but how do we know they get it right when they pretty much walked in and walked out?

A: Andrew, Good afternoon. You have an excellent question and I understand that you potentially feel disappointed with the result of just a five minute visit. I recommend you wait for the report / value to be advised to you prior to being disappointed. Who knows the value may land right where you are hoping.
The process of valuation is made very easy these days with the availability of so much data on-line. You can be assured that the Valuer would have done his research prior to applying. The level of ease is demonstrated in the fact that most Lenders now offer free valuation inspections, something that was always a paid service many years back.
I will have to admit that I am not in agreement with telling the Valuer how to do their job by providing them details of neighbouring properties / written description of your house etc. What do you think of people who tell you how to do your job ?. The answer is that you will show less respect, not more.
You and your Broker would have discussed the potential value of your home prior to him/her organising the inspection. This gets captured in the Valuation request as "Customers Estimate", so they already know on arrival what you think and have already done their comparisons. The purpose of the valuation inspection is to quickly identify if there are any standout features that warrant an above average assessment or alternatively, any damage / essential repairs that could lower the value.
Once your Broker gets the report back, he/she will be advised of what nearby properties were used as comparisons. If you or your Broker feel the value is "underdone", then it is the Brokers role to find three additional properties that warrant the valuation report to be revisited/challenged. I have had moderate success in these circumstances when the additional comparative properties can be found.
It appears you are on the way with your refinancing, however if you do need any expert advice, then I would be happy to chat.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)
e: finance@AskKen.com.au

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Q: I’m thinking of selling in the new year and instead of giving it to a local agent I reckon I could sell it privately and save some money. I have spoken to buymyplace but I saw the question about purplebricks the other day and want to find out what the difference is between the two?

A: John. Good afternoon. I'm just checking into the platform following a very busy Christmas. I hope that your day was enjoyable.
In regard to your preference, Purple Bricks would get you an internet presence, but your real need is to find local buyers. This is clearly the value of local Real Estate Agents.
The do it yourself process would not be that hard, but no advertising means no sale. If you are in a street that has lots of drive by traffic, have good social media connections and feel confident about negotiating with purchasers thengive it a try. Provided you are not in a rush, the only thing you can lose is time.
If you want assistance in setting a price I could provide you with some property and suburb reports that will help (my shout - just contact me privately).
Of course I would be more than happy to discuss any future financial needs you may have.
Give me a call. The property reports can be yours without any extra obligation.
Good luck and hope to speak soon
Regards
Ken Olds
1300 ASK KEN
finance@AskKen.com.au

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Q: I'm thinking of using Purplebricks to sell my house when they start in Sydney next month. They appear to do everything a traditional agent does and I've estimated it would save us about $65,000 in fees. Are there any catches, seems too good to be true?

A: Steve. Hello. I have read a little about Purple Bricks starting up in Australia, but unless you are talking about a multi million dollar property, real estate commissions are no where near $65,000
How do they suggest they will "save" you this much. ????
Please give me a call if you want any seriously professional advice.
Regards
Ken Olds
1300 ASK KEN
finance@AskKen.com.au

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Q: Why is it that I could get about a 0.50% lower rate on my home loan with my bank if I was a new customer? Shouldn't existing customers be getting a lower rate for loyalty? Is this just happening at my bank or with other banks as well? Seems unfair!

A: Steve, Hello and thank you for your question. As a mentioned by others, it is very true that Banks, in offering very competitive products to new customers, do not acknowledge the loyalty of existing customers. Some banks are so brazen about this issue that they actually show in their fine print that the advertised competitive rates are for "new" customers only.
This is one of the main reasons that many experts recommend you have a health check completed on your existing home loan at least every two years. Another reason is that Banks do not recognise the increasing value of your home and therefore the lowering of their risk, which could often entitle you to a lower rate.
I have access to over 25 Lenders and I would be happy to conduct that health check on your behalf. I am based in Western Sydney, so quite close.
Let's get together and find a way to start saving you some dollars.
Best Regards
Ken Olds
1300 ASK KEN (1300 275 536)
email: - finance@AskKen.com.au

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Q: I have a desire to pool my wife's superannuation with mine and invest in a property. I understand that I must move into the SMSF to do this but what are the practical steps associated with the plan?

A: Jimmy. Hi. Thank you for your question. The SMSF process is quite detailed, however having yourself and your wife as joint members would not be issue.
Prior to taking the jump to set this up, it would be very beneficial to cover the broad basics and do a comparison on SMSF borrowing, versus simply borrow in your own names with the benefit of Negative Gearing assistance.
With your potential to go through SMSF, things to think about will be
x The cost of setup,
x The cost of running (much higher with multiple members),
x The cost of borrowing ( also higher than a negative geared investment)
x The borrowing capacity of the fund
x The cost of loan establishment and trustee setup needs
x Ensuring sufficient liquidity remains in the fund

Lots to consider, however I would be happy to provide further info if you wish to give me s call
Regards
Ken Olds
1300 ASK KEN

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Q: We have found a house we want to make an offer and we have saved the 10% deposit. I have just started a new job and still on probation for another month, will this have any impact on us obtaining a loan?

A: Chris. Good morning. The respondents have given you all the appropriate words of caution, so I will not repeat anything, other than saying you now have some good advice and ideas. My main reason for adding this comment is that I note how close we are in location ( I am placed in Glendenning) and could be available to meet during the day or evening, should you wish to chat and cover off all the options.
Best Regards
Ken Olds
1300 ASK KEN

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Q: I have just started investing in Acorns. ($2,000 + $25 per month + rounding up of my purchases) Is this a good investment or do think I am wasting my time & money?

A: Michael. Such investments are very speculative to say the least. Often turn to failure and at the ripe old age of 59. I am yet to see anyone profit from such a venture.
Di you have a cooling off period by any chance ?
Fair chance you are buying into a venture where the trees have not even been planted, let alone the time they take to bear fruit, be harvest and then for the Managers to tell you there was no profit. Don't get me wrong, your venture may be quite legal and above board. Profit is another thing.
An investment property ( also not guaranteed) but perhaps a lot better investment could be a much better way to go.
Let me now if you would to like to chat.
Regards
Ken Olds
Mortgage Broker
1300 ASK KEN

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Q: My husband is looking to purchase a new car for our business and when he asked the finance person at the car yard about their rates, they only wanted to tell him the monthly payment. Is there a way we can calculate what the interest rate is?

A: Hello Liz. If you can let me know the following information, I should be able to reverse engineer the data to inform you of the rate.

Amount Financed
Term of loan
Payments required in advance or arrears
Instalment Amount (monthly)
Residual or balloon amount at end
Type of finance being offered ( Chattel Mortgage or Lease)

Please provide the detail to my email finance@AskKen.com.au
Look forward to hearing from you
Regards
Ken Olds
Mortgage Broker
1300 ASK KEN

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Q: We are looking to buy a new home and would prefer to buy before we put our own home on the market. Is that possible, can you still obtain bridging loans and what are the issues we need to be considering before we start looking?

A: Frances. Good morning. Thank you for your question. Yes. Bridging loans are certainly still available. One of the first things in considering which lender will to approach will be the answer to the question of what loans ( if any) are expected to remain after the sale of your existing home ?
Bridging loans, given there short term nature can have some additional costs in higher application fees. Other things that come to mind in choosing the most suitable option for you is,
A) who is your current lender ? This could be the cheapest option
B) understanding how lenders assess your repayment capacity at two critical points, ie when you have two loans running at the same time and then again for whatever loan remains at the end.
C) bridging loans are normally for a maximum period of six months and many lenders will require an undertaking from you that you are prepared to "meet the market" if your home is not sold in this period.
These are just a few of the key points.
I would be happy to hear from you and make a more detailed assessment for your personal situation.
Please feel free to call me on
1300 ASK KEN (275 536)
Regards
Ken Olds

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Q: We have recently taken out a mortgage but have had to go with a loan that has a higher than average interest rate because of a small issue on my husbands credit file. Assuming we make payments early, how long until we can refinance at a lower rate?

A: Michelle. Hi thanks for your question. On the good side you were successful in getting your finance 'over the line'
Your ability to refinance however at what is known as 'prime' rates will not be assessed on your additional payments.
Rather, it will be based on who you incurred the credit issue with, how long ago was it, and what was the value. For the purpose of this reply, I am going to assume that the issue is now fully paid.
I would be happy to provide additional advice but would need to read the credit file to do so.
Please give me a call if you would like to chat further
Regards
Ken Olds
1300 ASK KEN

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Q: When we got our home loan early this year the rate was 4.22% and since then the RBA has cut rates twice but when I looked at our rate online it is showing 4.02%. Should we have received more than 0.2% rate drop?

A: Tom. Hi. You are certainly in the right place to be asking that question.
If you have seen two RBA rate cuts since taking out your loan and only benefiting by 0.2% then your lender has been extremely conservative.
Don't get me wrong, every lender has held back in passing on the cuts.
Depending on your circumstances, there could be an opportunity to refinance you into a significantly better deal. I could provide you with some recommendations that may quickly repay the cost of refinancing. I would however need to gather some addition detail to do so.
Please give me a call if you would like to discuss further
Best Regards
Ken Olds
1300 ASK KEN

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Q: What's the maximum variable interest rate that I should be paying on my home loan? Not fussy about the lender - I just want to know the range of rates that are considered acceptable if I refinance.

A: Justin. Good afternoon. I assume that by "maximum you should be paying" means the cheapest rate that generates you the best savings.
I can offer a current variable rate of 3.54% (3.55%. Comparison) under certain conditions which would be.

Property Usage = Owner Occupied
Loan to Value Ratio = < 80%
Location = Sydney Metro Area only
Employment = PAYG only (not self employed)

If this sounds like your situation then you could qualify. If not, call me anyway and I will provide best option for your situation.

Regards
KEN Olds
1300 ASK KEN

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Q: With the predicted 30% drop in apartment prices due to oversupply and the number of defaults from Asian buyers...are we likely to see a drop then flow onto house prices overall?

A: Marilyn. Hi. A very interesting question. There is certainly plenty of discussion around the supply level of units to come onto the Sydney market over the next 18 months or so. The impact on values due to this cannot be entirely certain, but there are plenty of experts suggesting it will have an impact. A 30% drop however would be bordering on a "crash" and I think whoever suggested this is extremely pessimistic. On the good side of this equation is that the level of construction is not concentrated in Sydney City, it is well spread across the broader Sydney area and that is suggested to cause some comfort on the valuation pressures.
The level of future defaults will also be an interesting area to watch with all lenders tightening the rules for Non Resident applicants.
Buying property should be considered a long term view. If you go back across history, there has never been a bad time to buy, provided a long term view is taken. (Every high has superseded preceding highs).
Your decision to buy should be based around your personal needs and objectives, and then if a pure investment view is your focus, an alternate strategy for other classes of assets (cash / shares etc)
If you would like to talk through options, even outside of Sydney, then I would be happy to have a chat.
Best Regards
Ken Olds
1300 ASK KEN

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Q: Which lenders are still accepting foreign investor loans and what are the criteria or conditions?

A: John. Good evening. Given you operate in the Broking industry, you will be aware that the clamp on foreign investment is getting near impossible.
I got one away with Latrobe recently. Not a prime rate and it was a Commercial property.
I suggest you have a chat with them
Regards
Ken Olds

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Q: I'm looking at a 1 bedroom apartment for an investment, what percentage of the value will I be able to borrow? I don't see the benefit of it is too low to have the property negatively geared.

A: John. Good morning. Thank you for your question. Whenever I hear of a 1 BR apartment, I immediately think how large is the floor space ?
All lenders will have a restriction on size for smaller apartments. For many it must be greater than 50 sq m, however there are others that will go as low as 40sq m. When calculating the size, you must do this by excluding any balcony or parking areas.
At less than 40 sq m, you would be restricted to an 80% borrowing level. If less than 35 sq m then this becomes a case by case scenario, however you may be able up to borrow at 65%
I am assuming the apartment is not going to be used for student accommodation, because this also has lender restrictions.
Always keep in mind if you already have your own home with good equity, then you could possibly structure the investment debt at 100% plus costs.
Please call me if you would like more information.
Regards
Ken Olds
1300 ASK KEN
E. finance@AskKen.com.au

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Q: Trying buy a unit in St Kilda but finding it difficult to obtain finance as it's 41 square metres. Is 50 squares always the minimum - any advice of which banks might help?

A: Michael. Hi. I do have lenders that will accept units as small as 40 sq m. But this must be the living space, not balcony or car space.
If you can send me the property address, I have access to some lenders security registers that will allow me to check the specific complex for suitability.
Hope to hear from you soon
Ken Olds
1300 ASK KEN
Finance@AskKen.com.au

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Q: I'm about to buy a home, how much should I allow for conveyancing? Are there any other fees I should be aware of?

A: Michelle. Hi, When assisting my clients prepare a budget for their purchase I normally allow $1,600 for Conveyancing. Within this amount there is normally enough to cover your Pest & Building Report or Strata Management Audit.
If the property has substantial value or other unique features it may be necessary to move your budget toward the $2000 mark.
A Conveyancer can often be cheaper than a Solicitor, so it is worthwhile shopping around.
If you would like any information on mortgage options then please give me a call
Best Regards
Ken
1300 ASK KEN
Www.AskKen.com.au

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Q: Is it possible to claim the GST for the expenses on my investment property?

A: Lisa. Hi. Thanks for question. You cannot specifically claim back the GST incurred on costs associated with your investment property.
Even if you were registered for GST in your own business operations, you should keep the Investment property and the business operation separate.
However, given GST does makeup the total cost of a purchase or service, then that cost (inclusive of GST) can be claimed as an expense against the investment property.
Should you wish to get a health check on your mortgage needs, then I would be happy to have a direct conversation.
Best Regards
Ken
1300 ASK KEN
Www.AskKen.com.au

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Q: I am a first time buyer. What is the % deposit I should be aiming for to get a decent rate on a mortgage?

A: Rosa, hi. There are essentially three basic types of loans.
1) variable rate professional package. These loans are priced for the risk being taken on. Therefore you should aim for a 20% deposit to achieve the best rate.
2) basic variable rate loans. These loans are often not priced for risk and you can be eligible for very good rates up to 95% of the home value
3) fixed rate loans. Again there are lenders that will do fixed rate lending without significant pricing for risk. Therefore these remain a good option if you do not have the full 20% deposit.
Please call me if you would like a full assessment for your personal situation
Regards
Ken
1300 ASK KEN

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Q: If I received conditional approval for a credit card, but now I don't want to go ahead with my application, does this affect my credit score?

A: Katrina. Hi. As you have applied for this card, there will be a record of the application against your credit profile. This does not mean it will 'adversely' affect your credit score. Your credit score becomes a history of several of your past events over a long period.
If you apply for any other loan in the near future, I simply recommend that you make your lender aware that the previous application did not proceed.
Hope this helps
Ken
1300 ASK KEN

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Q: Who has the most competitive home loan rate in Australia currently??

A: Ben. Good morning. The best variable rate that I could offer you right now is 3.54% for an owner occupied loan at Bank of Sydney.
As the old saying goes however "conditions do apply".
If you would like to check your eligibility / suitability for this loan, then please call me directly.
Regards
Ken
1300 ASK KEN

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Q: when do i have to pay mortgage insurance?

A: Joe. Hi. Thanks for your question. I could outline three types of scenarios. Firstly, it is important to understand that it is the Lender who becomes protected by the "insurance". The cost of the premium is passed to yourself.
1) prime loans. This is where you have a fully documented loan, either PAYG or self employed and can demonstrate your servicing capacity. In this instance you would pay mortgage insurance once your Loan to Value (LVR) ratio exceeds 80%. I have however seen some lenders extend this to 85% in certain scenarios, or even 90% if you happen to be employed as a professional medical practitioner (or equivalent)
2) The second scenario is for self employed people who are not able to produce full financials and tax returns. In this instance you may be relying on your Business Activity Statements combined with a self declared income amount. If this is the case you would pay Lenders Mortgage Insurance (LMI) when the LVR exceeds 60%
3) The third category is if you may not be in the prime lending space, ie you may have an impairment on your credit file.
In these instances it may still be possible to obtain a loan, however you would be subject to a "Risk Fee" on the entire amount of the loan regardless of LVR. Risk Fees often run in the order of 0.75% to 1.50%. A risk fee provides a Lender with the same protection as LMI
Please give me a call if more info is required.
Regards
Ken
1300 Ask Ken
Www.AskKen.com.au

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Q: If I have my superannuation invested in a wrap solution - what funds, if any, can I access before retirement? Is it all off limits or can I access part of it now?

A: Justin. This is a question for a qualified Financial Planner / Accountant, however, depending on your age your super may be split into preserved and non-preserved components. The Non-preserved component could be accessible, however there will taxation implications. Please seek the appropriate advice.
Is the "wrap solution" that you speak of under a Self Managed arrangement ?
If so, you may be able to borrow for residential investment property. If this is the area of interest, then please give me a call to further discuss.
Best Regards
Ken Olds
1300 ASK KEN
www.AskKen.com.au

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Q: If selling 50% share in an investment property, how is the capital gains tax calculated?

A: Michael. Hi. I have noted your question with interest and based on your previous questions I am going to assume two things.

1) the property is held for investment purposes (potentially you also hold equity in an owner occupied property? ) and

2) you are going through a family separation.

If I am correct, I have been there on a personal basis and could provide you with some good suggestions once knowing your full position. My suggestions of course would be subject to Accountants confirmation and I could link you up with quality advice in this area if needed.
If you would like to chat more with someone who can associate with your circumstances, then please make contact on a direct basis.
Look forward to hearing from you
Best Regards
Ken Olds
1300 ASK KEN
Finance@AskKen.com.au
www AskKen.com.au

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Q: I am keen to use the equity in my home to invest - maybe real estate. Maybe another option. Does anyone have any firm advice on the available options at the moment?

A: Jimmy. Hi. Thanks for your question. In regard to "firm" advice, that would be a little difficult without getting a better understanding of your needs. At this point, I can simply say that I have access to many lenders who would allow you to access the equity in your home for worthwhile investment purposes.
From a target perspective it is good to remain below an 80% Loan to Value Ratio (LVR), by doing this there would no insurance iciest involved, however it would be possible to go to a maximum of 90% of the value of your home.
I note you are relatively close and I would be happy to meet with you to discuss strategies, loan structures etc.
please give me a call if you would like to chat.
Best Regards
Ken Olds
1300 ASK KEN
www.AskKen.com.au

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Q: We want to use our Super to purchase Land and we don't have enough in Super, can we use what we have for a deposit?

A: Nathan. Hi. You have raised an interesting question. I will make an upfront assumption that you are already operating a self managed super fund.
Any asset purchased by the fund must be at arms length from yourself as an individual and you are not allowed to derive a direct personal benefit from the asset (ie it must be a pure investment).
As a guide, a classic motor car could be deemed a suitable investment, however if it is garaged at your own home then you are deemed to be receiving a benefit and this would be a breach of the rules.
A further example would be a piece of artwork that is hanging in your own home.
For the land purchase that you are thinking of, it would need to be 100% owned by the fund. If you were to have any personal ownership then you would most likely be in breach of the superannuation rules for investments.
From a lending perspective, loans to SMSF for property purchases are normally restricted to house and land. I am not aware of any lender that will lend for vacant land or even a construction package.
If you are looking at getting exposure to property with smaller amounts of money, then the purchase of units in a managed property fund could be a suitable investment.
I recommend you speak with an Accountant experienced in running SMSF's for further advice.
Regards
Ken Olds
Mortgage Broker
1300 ASK KEN

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Q: 3 yrs ago I was introduced to MLM business the women who introduced me to it told me to get an ABN number I did but then I didn't do anything with the MLM business, and I didn't do anything with the ABN. Can I just cancel it or should I do tax return?

A: Asha. Good afternoon. I am not a Tax Accountant, so am unable to give specific Tax Advice, however you can cancel an ABN at any time it is no longer required. If you registered in the capacity of a Sole Trader, then your personal Tax Returns, should have captured all the business activity (in your case - None). You should also look into whether you registered for GST, although if you have not been requested by the ATO to do the Business Activity Statements, it is likely that you are not GST registered. Google the term "ABN Search" you will find a free website that will inform you of your ABN / GST status.
If you are looking to borrow money and your ABN remains registered, many lenders will ask for evidence from your Accountant that the ABN is not trading and has no outstanding liabilities. Could considerably slow down a loan application. If you never intend to use it in the future, probably best to close it off. You can re-active again in the future if the need arises.
Hope this helps
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: If I am refinancing to another bank, will I need to pay stamp duty?

A: Lewis. Hi. Just seen your question on Eccho Me.
The answers that you will have seen are accurate to a degree.
There is no Stamp Duty applicable as this is paid on the transfer of land only.
If the property is a residential property this would be the end of the story.
If the property is a Commercial property there is another potential of what is known as Mortgage Stamp Duty. This could be charged on a change of Mortgage.
In NSW Mortgage Stamp Duty was abolished for transactions after 1st July just gone.
Other States have different dates for the abolition of Mortgage Stamp Duty on non-residential properties.
If you would like to get further advise then please give me a call.
Regards
Ken Olds
Customers First Mortgages & Insurance.
1300 ASK KEN

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Q: What are the benefits (if any) of paying your mortgage repayments weekly over monthly?

A: Bill. Hi. A good question that is very often answered incorrectly.
Paying Fortnightly versus Monthly will only have a small impact. Do not get me wrong, the quicker you get your dollars into the home loan the better off you are.
The trick in suggesting paying Fortnightly saves years off the loan is in that you pay "half" the monthly amount every fortnight. As said by another respondent, effectively paying thirteen monthly payments every year.
So is the secret, actually in paying Fortnightly. ? No it isn't ! The real secret is to simply pay "extra", either Fortnightly or monthly.
I recommend you leave the weekly, Fortnightly, monthly selection to tie in best with you personal salary / cash flow cycle.
Please give me a call if you would like a professional health check on your existing loan
Regards
Ken
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: When is a good time to get back into the property market I sold for a great price and am getting a great return for my money.but I am now renting?

A: Louie. Hi. A very good question indeed. Unfortunately we do not have a crystal ball to see what will happen to property prices in the short term. All I could say is that historically, there has never been a bad time to buy property, with each market high point exceeding any previous highs.
At the moment, you may be happy with the return you are getting on your cash funds, however why are you paying someone else mortgage with those rent dollars ?
It would be difficult to see how re-entering the property market for your own home could be a bad decision, given you are renting right now.
If you would like assistance to prepare a budget and select from a great range of lenders, then please give me a call
Regards
Ken
1300 ASK KEN

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Q: As a young investor, what bank is the most accessible for a home loan for an investment?

A: Tom. Hello. Your question is quite a general one however the Investor lending regime has changed quite a bit over recent months. Lenders will now charge a higher rate for Investment loans over what they would for an Owner Occupied home loan. It has been many years since this was previously the case, but it seems this will remain the case for the foreseeable future.
Your choice of most suitable lender will depend on your personal situation. While the lending concepts all remain the same you will find niches around length of employment, the Loan to Value Ratio you are requesting, size of the property, possible post code restrictions just to name a few.
If you would like to obtain additional (personalised) advice, then please give me a call
Ken Olds
1300 ASK KEN

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Q: I got pre approved for a $420,000 home loan 6 months ago and now the bank say I can only borrow $390,000. If my situation is the same how can the bank change their mind like this?

A: Jackson. Hi. The reason for your lender now offering a reduced borrowing amount could be due to many factors, however the reason will fall into one of two criteria.
Firstly The security offered. It is possible that the valuation on the property has fallen short of the purchase price and the loan request is now outside the maximum lending criteria. Alternatively the property may be subject to lending restrictions in regard to size, location etc that would not have been known at time of pre-approval.
The second probable cause is your capacity to repay. Not all lenders offer a "fully assessed" pre approval process. Your original application may not have been fully assessed in regards to source of income, use of overtime / bonuses etc. Ln addition to this the lender may have increased the required buffer necessary to cover living expenses, other continuing commitments etc.
if the property is to be used as an investment, it is also possible that changes have occurred in regard to the allowance of rental income, usage of Negative Gearing allowances etc.
I recommend you check with a Broker who has a good range of Lenders to calculate your borrowing capacity across a broader rang of lenders than the one you are currently dealing with.
Please call me if you need assistance
Regards
Ken O
Customers First Mortgages & Insurance
1300 ASK KEN

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Q: Coming from Europe, any chance to launch LIBOR linked mortgages in Australia?

A: Daniel. Hi. LIBOR refers to the London Interbank Offer Rate, although I'll bet you already knew this. It is used by Australian Banks when accessing funding at a Wholesale level. This is just one of many avenues available for Lenders within Australia. I have also seen LIBOR based rates being available to large Corporate borrowers although the more common avenue for business would be a margin over the 90 day Bank Bill Rate (BBR).
For residential home loans at either a Owner Occupied or Investor level you would be looking at either a Standard or Base Variable rate, or their advertised Fixed Rates. Depending on the product / risk mix, it may be possible to negotiate on what you see advertised.
Hope this helps
Regards
Ken Olds

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Q: I want to get into the property market but can’t seem to save enough to buy in Sydney. I’ve saved $20k and was thinking if I should use the money to buy an investment property in the country?

A: Hi Greg. Hi I hear what you are saying. Saving for that deposit is tough, particularly when you need to add on the cost of stamp duty plus the potential of still paying rent.
I note I am quite local to you and would be happy o meet and fully discuss your situation. I could help you build a budget and time frame to achieve your goals, whether they be in Sydney or elsewhere.
Please give me a call if you would like to chat.
Regards
Ken Olds

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Q: Hi has anyone had any dealings with U- Bank? Good or bad? Im thinking about refinancing my home loan with them for their online rate of 3.74%.

A: Di. Good morning. I am a Broker and therefore not able to deal with U Bank. However, what I know of them, they are extremely "do it yourself" (no call centre).
I have financed a number of people that have started the U Bank process and then sought more professional service.
What I do know is this.
1) they do not have a call centre of any great value
2) they will only lend a maximum of 80% of the security value
3) they do not allow multiple properties as security, a real issue if you wanted to use the equity later to obtain an investment property

I recommend you read the blogs on their site to help make your decision.
I note that I am reasonably local to you and would be happy to offer any services.
Regards
Ken Olds

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Q: If you have a variable home loan and interest rates increase, does your repayment amount stay the same and just the interest portion of the repayment amount increase?

A: Bill. Hi. I endorse the previous comments from Scott Howell. Absolutely the correct answer, however, I add my two cents worth for the following reasons
1) Interest rates are currently falling, so if you have actually experienced an increase in recent times, then it would be a perfect time to review your needs.
2) I note that we are quite close in physical distance. Therefore should you wish to meet and discuss, I would be happy to be available.
Please feel free to call if in need.
Regards
Ken Olds

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Q: Does the term of my home loan always have to be 30 years? What if I want to put some pressure on myself to pay it back earlier?

A: Jimmy. If you have a variable rate loan, then you can normally make extra repayments without a penalty. Any extra payments (provided they stay permanently against the loan) will work toward reducing the loan term.
The term of the loan can be reset to less than 30 years. Essentially the difference is whether the Bank sets a minimum payment that must be met, or you flexibly just place extra money to the account when you can afford it.
Please give me a call if you would like to discuss options.
Regards
Ken

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Q: How much lower could rates go this year? Will fixed rates fall in line with the cash rate if it drops further?

A: Noah. Hi. Fixed rates normally travel ahead of the market. In the lead up to the most recent RBA cuts, many lenders were quietly reducing fixed rates in the two / three year terms.
What will the cash rate do for the rest of year ? If only we had a Crystal Ball.
Please give me a call if you would like to have a chat around any options
Regards
Ken

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Q: I have been searching the comparison websites for the cheapest home loan rate and found an online lender at 3.63%. Does that mean I can't use a mortgage broker to help me through the loan process ?

A: Jon, you can certainly use a Mortgage Broker, however Brokers are restricted to the Lenders that they are aligned to through their Aggregators. Most Brokers will have in excess of 20 Lenders.
The rate that you are looking at for an online Lender is possibly not open to any Broker channels.
If you are internet savvy and have straight forward needs, such a service could provide you good benefit. However if you do not have a full 20% equity or your needs are more complex, then I recommend you seek the services of a Broker.
I do not charge for my advice. Please give me a call if you wish to chat
Regards
Ken

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