Swish Money Boyd Heather Finance Broker and Financial Adviser

Property Downturn?

Some interesting percentages from Cotality outlining recent falls in house prices, particularly in Sydney and Melbourne.

Does this mean it's a good time to buy a property. Maybe. Generally the best time to buy is when you are ready to (and can afford to!).

It's also important to zoom out on property values - look at how they trend over the long term in the article. The short term is just noise.

Housing downturn accelerates as 93pc of capital city suburbs record decline Australian house prices have fallen for a fifth straight month, according to property data firm Cotality. It says the downturn has now spread to 93 per cent of suburbs in the nation's capital cities.

Debt Consolidation into your home loan - the Pro's and Cons.

Did you know that most banks will allow you to refinance your home loan and consolidate outstanding personal debts (such as car loans, personal loans or credit cards) provided you have some equity in the property?

Why would you consider it?

✅Improves cash flow (repayments stretched over 30 years).
✅Lower mortgage interest rate (6% vs 10% to 25% on personal debts).
✅Simplicity - one loan rather than multiple loans.

What are the cons?

❌Repaying interest on debt over 30 years increases the total cost.
❌Personal assets are usually long gone in this time (ie cars).
❌Requires some discipline to avoid getting back into the same situation with further personal debts down the track.

There are some strategies available to minimise the cons, but again, being disciplined with future spending habits is the key.

If you're thinking of refinancing your home loan and would like a no obligation chat around debt consolidation and if it might benefit your situation, please reach out!

Cash Rate Remains at 4.35%. Next meeting is scheduled for September 29th. Where things go from here who knows, but as always I strongly recommend if the budget allows to make additional repayments into your home loan or build up your offset accounts to give you breathing space should interest rates rise in future.

Statement by the Monetary Policy Board: Monetary Policy Decision | Media Releases At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35 per cent.

Superannuation - it's your money!

Another reason to pay close attention to your superannuation fund, and the fees it charges. Biggest fund in the country has just put their fees up.

Millions of workers slugged higher super fees Millions of Australians will be slugged with higher rates for their superannuation services, as the nation’s largest fund lifts its administration fees.

There have been a couple of lenders in recent months that have added out of RBA interest rate cycle rate rises to their existing customers home loans.

If it's been a while since you've reviewed your home loan (for your owner occupied property), and your current loan is less than 60% of the property value, the 5.89% rate may be of interest!

Get in touch to find out more.

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Possibly the first sign of things to come.

Review your budget, cut out what you can. Contact subscription providers, ask for discounts (threatening to cancel a service often leads to a better offer). Call your bank....ask for a better interest rate on your home loan. If they can't help, shop around (call your mortgage broker!).

If you're looking to buy - do everything you can to buy within your means...whatever that looks like to you.

Remember, comparison is the thief of joy, and not worth the stress trying to keep up financially if it becomes a stretch.

Kingston records biggest mortgage stress jump of any postcode in Australia The rise was almost three times the next fastest-growing postcode…

What does 'Balanced' Super actually mean?

Great article below with Rest Super making comment on the ridiculous naming conventions of the superannuation industry.

The various categories most funds have available for investment include things like 'conservative' 'balanced' 'growth' 'high growth'. Balanced to most people means 50/50, half and half.....not superannuation!

Why does any of this matter? You could be invested in your super funds 'balanced' option and rightly feel that is a somewhat safe way to invest your super, and assume that 'half' your money is in conservative assets (such as cash). Realistically, a large portion of funds that include the name balanced are likely to have 70/80% of your funds in volatile assets such as shares and only 20/30% in conservative assets such as cash and bonds.

Bottom line, don't just read the headline name of the funds when making your decisions to invest. Look at the underlying assets it invests in. Check how much it holds in cash and bonds. Consider your tolerance for risk (the share market rising and falling) and your investment timeline (ie how long you have till you start accessing your superannuation) and plan accordingly.

If you'd like to know more about how your superannuation works and are unsure where to start feel free to get in touch.

Major industry fund urges standardised product labelling - Financial Newswire Advisers have been complaining for years but now a major industry super fund is now calling for Govt action on investment product labelling.

Some incredible jumps in value in Northern Tas over the past 12 months.

No doubt helped along by the various First Home Buyer Guarantee Schemes and the State Governments zero dollar stamp duty charge (finished since July 1) - both of which made home ownership with a 5% deposit possible.

Surprising data puts shifting market in perspective - realestate.com.au Despite a cascade of major economic developments, home values in most suburbs are still higher than this time last year.

Not all Pre Approvals are created equal!

As a mortgage broker helping people purchase their homes or investment properties, I get regular enquiries asking if a pre approval is worth having?

Obtaining a pre approval has advantages. The bank confirms your income and expenses are at appropriate levels relative to the loan you're seeking, that your credit history is clear, and that overall you're seen as an acceptable risk!

However, not all pre approvals are created equal.

Firstly, some banks don't offer pre approvals at all....(which means you can't approach them until you've got a purchase contract signed).

Some banks provide 'soft touch' pre approvals where data is assessed via an internal scoring system and a conditional approval is provided....but nothing is actually double checked/reviewed by a human credit assessor.

Other banks provided 'fully assessed' pre approvals where an assessor reviews the entire file, and the loan is pre-approved subject to you finding a property that the bank deems is acceptable security for your loan.

An important point - a pre-approval is still subject to you finding a property that is considered 'acceptable security' for a bank loan. Some properties, for a variety of reasons, may not be accepted.

A pre approval is also not enough to satisfy a finance clause in a purchase contract until the lender has reviewed and issues a 'formal' or 'unconditional' approval.

If you're embarking on your property search and would like to work through whether a pre-approval is worth seeking, please reach out.

Some food for thought on the current state of the property market:

Housing market only on ‘pause’ before confidence returns, mortgage brokers warn Aussie homebuyers have hit “pause” on the property market, choosing to sit on the sidelines until confidence returns, according to the peak national body for mortgage brokers.