 Monday and Tuesday this week, I had the privilege of sitting alongside some absolutely inspirational women and men of the finance industry, as part of the Mortgage and Finance Association of Australia (MFAA) Opportunities for Women's panel meeting and lunch launch, presented by key lead researcher Jane Counsel.
The initiative seeks to deliver findings, consider actions and future initiatives for the finance industry, and particularly targeting inclusion and diversity in the finance industry, particularly around that of the participation of women. Questions discussed at length, were not limited to retention of women in the sector, but also the support of, and attracting more women to finance, and understanding the challenges that women face. Notable that while industry participation overall is on the rise, female representation has decreased from 28% to 25% in recent years, and understanding why, and what can be done to counter this trend, is critical to long term success. Aside from meeting some wonderful members of the broader community, including lender, and aggregator representation at the launch, it was also a pleasure to meet AFLW player Sabrina Frederick, who shared her story and experience, as a professional AFL player, who was wonderfully inspiring and a joy to listen to. Much thanks must go to Stephen Hale, Usha Dean & Mike Felton, along with the ever insightful, supportive and inspirational Jane Counsel, along with all of the other participants who welcomed me and my contributions so warmly.
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 The Reserve Bank of Australia (RBA) increased the official cash rate by 25 basis points to 0.35% at today’s board meeting.
This is the first cash rate hike in more than a decade and comes after core inflation grew by 3.7% over the year to March – well above the RBA's 2-3% target. With the latest inflation data, it shows that Australia had recorded the highest quarterly and annual increase in more than two decades. The last time the RBA increased interest rates was in November 2010. The official cash rate has been at a record low of 0.1 per cent since November 2020. Mortgage holders have been warned to prepare for a double rate rise. The cash rate is largely expected to jump by 1 per cent by the end of this year and reach 1.25 per cent next year. Lenders are likely to lift mortgage rates in line with the cash rate increase, which may result in big changes to variable home loan repayments. Reach out so we can review your home loan.  Mortgage brokers were responsible for 66.5% of all new home loans in the December quarter, according to the latest data from research group Comparator. That is not only a record for a December quarter, it's also a significant increase on the market share brokers recorded in December 2020 (59.4%) and December 2019 (55.3%).  Mike Felton, the CEO of the Mortgage & Finance Association of Australia, said the strong increase in mortgage broker market share shows that consumers really value the service, competition and choice that brokers provide.
When you visit a bank for home loan advice, the bank will only tell you about its own products, even if it knows another lender is offering a better home loan. But when you visit a broker, the broker will compare interest rates, loan features and borrowing criteria from a range of lenders. The broker will also negotiate with lenders on your behalf. That significantly increases your chances of getting a great loan that’s tailored to your unique circumstances.  When it comes to classifying debt as either ‘good’ or ‘bad’, borrowing to fund your education or buy a property are generally regarded as good debt, because both tend to deliver a return on investment.
However, you might not realise that taking on HECS-HELP debt can make it harder to qualify for a home loan and reduce your borrowing capacity. That’s because, if hundreds of dollars per month are being diverted from your salary to repay your student debt, that means you have less money to devote to mortgage repayments. So does that mean you should repay your HECS-HELP loan as soon as possible? Maybe yes, maybe no. On the one hand, eliminating your student debt could make it easier to get a home loan. On the other hand, student debt is interest-free (although it does increase in line with inflation), so it might be better to repay other interest-incurring loans first. Give me a call if you want to know the best approach for your situation or your child’s situation.  Buying a typical house will now cost you almost 30% more than buying the typical unit. CoreLogic has reported that, at the end of February, Australia's median house price was 29.8% higher than its median unit price – a record gap.  To put it in dollar terms, median prices are $791,400 for houses and $609,800 for units, which means the gap is almost $182,000.
That gap has significantly widened in the past two years:
On the other hand, it’s also possible the gap will narrow, because with houses looking relatively dear and units relatively cheap, demand might shift from the former to the latter.  The official data confirms what you might’ve heard anecdotally – property investors are very active right now. Property investors took out $33.7 billion of home loans in January, according to the Australian Bureau of Statistics, marking the second consecutive month in which investors set a borrowing record.  To illustrate how investment activity has surged in recent times, investors borrowed 67.8% more in January than the year before.
This increase has occurred throughout the country, with investment activity increasing by:
That means most property investors are finding it easy to secure quality tenants. It also gives many investors the chance to raise rents, because demand for rental accommodation is so high right now.  The supply chain shortages that have affected so many industries have hit property as well, with residential construction costs rising at the fastest annual rate since 2005.
Home building costs rose 7.3% in the 2021 calendar year, according to CoreLogic’s Cordell Construction Cost Index (CCCI). That said, the pace of growth might be trending down, with costs rising 3.8% in the September quarter but only 1.1% in the December quarter. Part of the reason costs are rising is because builders are struggling to get their hands on materials such as timber and metal products. Property developers and home builders are likely to be passing on at least some of these increased costs to people buying homes.  First home buyers can now save their deposit even faster, after the First Home Super Saver Scheme savings threshold was increased from $30,000 to $50,000.
The scheme lets first home buyers salary-sacrifice pre-tax income into a dedicated account within their superannuation fund – up to $15,000 per year and now up to $50,000 in total. There are two ways in which the First Home Super Saver Scheme benefits first home buyers. First, the money they deposit into the scheme is taxed at 15% rather than the income tax rate, which is 19% for someone earning up to $45,000 and 32.5% for up to $120,000. Second, when first home buyers eventually withdraw their money, they’re allowed to withdraw their original deposit plus about 4.7% interest, which is a higher rate of interest than they’d earn through a regular savings account. Withdrawals are generally taxed at the marginal tax rate minus 30 percentage points.  Home loan activity reached a record high in December, according to the latest data from the Australian Bureau of Statistics, in a sign the property market remains strong. Australians committed to $32.8 billion of mortgages in December, which was 4.4% higher than the month before and 26.5% higher than the year before. The breakdown was:
 One reason so many Australians are entering the market is because it's been booming over the past year.
Another is that despite speculation that interest rates might increase later this year, rates are at ultra-low levels and would still be very low even with a rate rise.
Today, celebrating International Women’s Day, with these wonderful, inspiring, supportive women, and a perfect opportunity to celebrate all that we do as not only mortgage brokers, but as friends, sisters, and mothers. 🧡
As a woman, running a business, leading from the front, today made me realise that I need more days like today. What I think many might be surprised to know, is that of the many mortgage brokers I know, is that we are not in competition, there are many clients who value what we do, and in fact, we are often support and collaborate to ensure that not only we continue to grow and evolve as brokers, but also to ensure that we are all focussed on the success of our clients and support each other in our endeavours. We are a community, and a fiercely proud, brave, and driven community of strong women at that. Proud to be one of every day, but especially today on International Women’s Day. 🧡  There's a house building boom going on right now, partly because of the now-concluded HomeBuilder incentive and partly because interest rates are so low. Building work started on a record 149,345 new detached houses in the year to September 2021, according to the latest data from the Australian Bureau of Statistics.  If you’re planning to build a new home, please note that financing residential construction projects is more complicated than getting a standard home loan.
Lenders require more paperwork – all the usual documents, plus a copy of your building contract, building plans and building specifications, as well as quotes for any additional work you might be planning. The way lenders pay out the loan is also more complicated: instead of giving the money in one lump sum, they distribute it in five ‘drawdowns’ as the build reaches key milestones. If you want to build a new home in 2022, give me a call – I can talk you through your options  With rents climbing steeply in many parts of the country, 2022 might be the ideal time for younger Australians to enter the market. The average rent paid by a tenant living in a capital city was 7.4% higher in the December quarter of 2021 than the same quarter of 2020, according to Domain.  So if you’re a first home buyer, you might be wondering – what can you do to save a deposit? Options include:
 Home loan activity is at historically high levels, according to the latest data from the Australian Bureau of Statistics. Australians committed to $31.4 billion of home loans in November, which was 6.3% higher than the previous month and 33.2% higher than the previous year. Owner-occupier borrowing was up 7.6% on the month and 17.2% on the year, while investor borrowing was up 3.8% on the month and 86.9% on the year.  Want to enter the market this year? Here are three home loan tips:
 With a clear passion for supporting the financial and professional success of women, Get Smart Financial founder Rachael Bland was inspired by strong female role models from an early age.
Her company name Get Smart Financial was encouraged by the lead female character Agent 99 from popular spy comedy show Get Smart which she spent a lot of time watching growing up as a child of the Seventies. Working for the Spy Agency CONTROL in Get Smart, Agent 99 was a mysterious female spy who spoke Chinese, German, French and Spanish, was an accomplished dancer, a violin and harp player and a talented singer. “Her character was diverse, challenged, smart, quirky and non-conformist and I totally relate,” Rachael said. While Agent 99 was trying to take control of spy agency KAOS in the fictional world of Get Smart, helping customers take better control of their finances was one of the key motivating factors in the establishment of Rachael’s mortgage broking business nine years ago. She established her business after spending more than ten years in mainstream lending, and as a single parent of three young children at the time, having the flexibility to run her own business, was also critical to the decision to branch out on her own. Rachael believes that helping her clients fulfil their financial dreams is an honour and the thing she enjoys most about being a mortgage broker. “Very often clients are not just wanting a loan or just a service, they are looking for someone to understand their vision, their dreams and their goals,” she said. “Anything is possible, with commitment, the right team all working together, and great advice, and to be a part of the journey when a client comes to realise this, is just so fulfilling.” Her passion for encouraging customers to take control of their finances, especially females, has been borne from her own experiences raising three children as a single mother. “50 per cent of marriages in Australia with children, end in divorce, and when this occurs, 80 per cent of those single parents are women,” she said. “Of those 80 per cent, around 40 per cent will live at or below the poverty line. That means of every 20 marriages, 10 will end in divorce, 8 women will be the primary or sole caretaker of children, and 3-4 will live below the poverty line. “Take notice, you need to know, your friends need to know, all young women need to understand this, it is critically important.” The importance of being financially literate is a message that she constantly impresses on her children, now young adults, and their friends. “Understanding your superannuation, what compound growth is, what capital growth is and that financial independence is a good thing,” she said. “It is my and our absolute responsibility to the next generation.” Translating her passion for supporting women’s success into tangible industry initiatives, Rachael has established a Women in Finance closed Facebook group which she describes as a “place of no judgement” where female brokers can connect, celebrate their successes, and support each other. She is also the latest appointee to the advisory board of the MFAA’s Opportunities for Women Program and believes that one of the biggest differences to enabling greater diversity and inclusion in the industry is highlighting the path trodden by successful female brokers, the barriers that were overcome along the way and the successes they have achieved. “We need to tell more of our stories, and to learn from other women. Role modelling, and leading by example is integral,” she said. “Women can be their own greatest critic, and sometimes the fear of failing, can stop us from getting out of the gates. You don’t need to know it all, you need to be driven, and prepared to grow, learn, and be the best you can be. Sometimes you have to take calculated risks and to back yourself to truly understand what you are capable of.” Her greatest wish for greater diversity in the mortgage and finance industry is to see more role-models telling their stories and the industry creating more pathways to becoming a broker for diverse individuals. “If the pathway to becoming a broker is broken down in a step-by-step format, that is easy to follow, it would help new entrants see the path, and understand that the goal is achievable,” she said. “Sometimes the path is not always clear.” She believes greater diversity is integral to maintaining the industry’s reputation as a trusted adviser by ensuring that brokers continue to really understand the needs of their diverse customers and always have their best interests at heart. “At an industry level, I am so proud to see year in year out the growth and development of our professionals, who continue to reach higher ground with our experience, education, diversity, and investment in development and training, which ultimately makes us better business owners, but also better advisors,” she said. “The combination of better collaboration, processes, experiences and diversity continues to elevate the value of brokers in Australia, and this is absolutely evidenced by the increasing numbers year-on-year of loans in Australia written by mortgage brokers, but we can and must do more. “ Regarding her own secret to success, she says her clients’ success is a testament of her success. “Our clients are front and centre of everything we do, and achieving the very best results for them, and ensuring they feel valued, informed, and empowered by our knowledge, expertise and experience, is the recipe we follow and pays dividends for all involved,” she said. “We have all had people tell us that we can only do so much, and I have always used this as motivation to defy what others believe they, or I might be capable of. Anything is possible, all it takes is hard work, and there really is no limit.” And finally, what is her advice to her younger self? “Set your goals, and know that two steps forward, and one step back, is still forward progress, and that is still ok,” she said. “Go early. Set your boundaries, and honour them and get comfortable with saying no if it is not part of your plan, no matter who it is.” Source: https://www.mfaa.com.au/news/champion-diversity-rachael-bland  Do you have FOMO and is that contributing to your financial prosperity, or keeping you up at night?
Comparison website Finder recently reported that household debt hit a record high of more than $2.5 trillion at the end of December — an average of more than $257,000 per household, which represents more than 180% of disposable income which is one of the highest rates in the world according to recent reports. More than half of Australians’ debt was in the form of credit cards followed by personal loans, car loans, buy-now-pay-later services, and payday loans last year, according to Canstar’s Consumer Pulse report. Credit card debt fell to 56 percent last year from 67 percent in 2019 as consumers curbed spending in shops and restaurants during the Covid pandemic. However buy now, pay later debt nearly doubled to 18 percent from 10 percent over the same period given the fast growth in the online-based payment schemes. So the question begs, are you making impulsive decisions that you regret later because you don't actually need to pay now? If so, time to cut up those cards, and speak to us about debt consolidation, to get your payments, rates, and debt down, and power up that debt reduction while interest rates are so low!  Want to save $108,000? We can do that! 🙋♀️💰🏡
Recently, the comparison provider Compare Club conducted a poll that 80 per cent of Australians cut back on spending during the three months to June so they can cover their bills. Of the 73 per cent of consumers found to have received a bill that cost more than expected, 50 per cent avoiding to eat out, and 35 per cent cut down on their saving. The majority of those surveyed were property owners who spent one-third of their income on home loans. Despite the low interest rates now, more than half of the respondents had not considered refinancing! According to Compare Club Home Loans' general manager, Matt Gatt, a homeowner with a mortgage of $450,000 could save around $3,600 annually and more than $108,000 for the entire mortgage if they reduce their interest rate by 0.8 per cent. Investors were most likely to refinance, with multiple properties because of their experience in the market. Out of 10 first home buyers, 9 of them are actively looking to cut costs, with 79 per cent comparing service providers and 59 per cent making a switch. 40 per cent of younger homeowners (aged 25-34), are more than twice as likely to compare and switch than those aged over 54, at 15 per cent. It is the youngest consumers who had experienced the highest rates of bill shock and had searched for ways to cut living costs, with half switching to more affordable providers. In contrast, consumers aged over 54 experienced bill shock, but in response, only 12 per cent switched service providers to refinance. Want to know more on refinancing your home loan? Feel free to reach out so we can provide options for you and you can start saving! With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times.  Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. So, meeting with our awesome clients, Joel and Millie this morning, who have just purchased as first home buyers, the most STUNNING property in Rosebud, imagine, Hampton styled exterior, wooden floor boards, and close to the beach, which we are SO excited about, but at our 7:30am zoom this morning, Humphrey their new pup joined the call too! He was so chilled for the new meet and greet, but literally looks more like a teddy bear than a pup! Had to share, Joel, Mille and Humphrey are going to not only love the new digs, but also the daily walks along the beach from their stunning new home! So excited for you guys!!!! Congratulations! 🏡⛱️🐶🧸  With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times.  Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below.  The RBA Board has decided to keep the official cash rate on hold at the record low 0.10%pa this month. Their decision comes as we witness the largest one-month jump in house values in 17 years and a surge in new home loans.
While this indicates the Australian economy is recovering sharply, it has prompted warnings the Reserve Bank may need to soon reassess record-low interest rates. While no one can accurately predict when this will happen, it begs the question: do you have a portion of your mortgage fixed? Fixed vs variable? The main advantage of a variable interest rate is this: when interest rates are low, your monthly repayments are low. That’s a win! But, when interest rates eventually begin to rise, your monthly repayments will increase. That’s food for thought. With a fixed loan, your repayments stay firm. This offers you certainty, which can help you plan your finances in other areas. Where does your loan stand? If you’re not sure you’re getting the best out of your mortgage, give us a call, we can go through your loan and your circumstances. With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times.  Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below. With the rapid increase in the number of mortgage lenders offering home loans to consumers, the process is even more complicated than in years past. Fortunately, Get Smart Financial is here to help. We have regular contact with a wide variety of lenders, some of whom you may not even know about. Working with us can save you time! Purchasing a property can be a life-changing experience but the home loan application process can be really daunting if you’re new to the process. We can prepare your application on your behalf and mitigate the risks in your request. See below banks for the current turnaround times.   Note: Recently updated SLAs are highlighted in Red
If you have any questions, book in a time with me below.  Buying a home is one of the biggest financial decisions of your lifetime and with so much at stake, it’s in your best interest to know every little detail about what you’re entering into.
A property valuation is an essential step in the loan application process. When you apply for your loan, the lender will send someone to determine the registered value of the property. This number may differ from the actual price you pay. Because the valuation affects your LVR it’s imperative that if you don’t like the figure you’re given, you find another lender with a more favourable valuer. We can help you find a lender that would suit best and answer any questions you might have about property valuation. Schedule a meeting and let's discuss!  There are so many emotional motivations for people to buy property, however three main reasons people invest in property that stand out:
Capital Growth Simply put, this is how much the value of your property will increase over time. This isn’t something that happens overnight so be prepared to hold onto the property for a few years if you want to see significant growth. Rental & Investment Yield This is the amount of profit you make from rent after you deduct expenses such as upkeep and taxes. Rent prices in Australia are sky-high right now so you can expect excellent returns. Tax There are plenty of ways to save on your tax bill if you invest in property. You can claim expenses such as renovations and capitalise on negative gearing by offsetting any losses you incur on your property against your taxable income. Perhaps you have another reason you are thinking about property investment? Or, one of the above is your motivation? Let's discuss!  Think about the last time you went grocery shopping.
I bet you spent at least a few minutes comparing brands and deliberating on which products offered the best value for money. If we expect that level of choice in our supermarkets, why wouldn’t we expect the same from our home loans? A broker’s job is to do the comparing for you. Not only are they experts but they have access to a huge database of lenders who are all wanting your business. A broker is in the position to negotiate with those lenders and find you the right value-for-money loan to fit your lifestyle. As mortgage brokers we have:
Helping people just like you to find the right home loan is my passion. If you’d like to talk to me about how I can guide you through this journey, feel free to contact me or click the button below so I can schedule a meeting! |
AuthorRachael Bland – Founder & CEO Archives
May 2022
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T: 0421 73 88 30 | E: rachael@getsmartfinancial.net.au Credit Representative Number: 427013 | Australian Credit Licence Number: 391237 | MFAA Accredited Credit Advisor 150638 | Copyright © 2019 Get Smart Results Pty Ltd |
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