Finance News
From the finance professionals
Issue 1 (July 08)
Welcome to our first newsletter
In order to assist us in keeping in better contact with our clients, and just as importantly, to enable us to assist in keeping our clients better informed, we have finally gotten around to commencing a newsletter. We intend sending it to you on a quarterly basis, with a few relevant and concise articles. We would appreciate any feedback, good or bad, and if there are any matters that you would particularly like to get some info on, let us know, and we will gladly do an article on that in a subsequent newsletter – or respond to you immediately with some info or advice if you wish. First, a quick update on us. We’ve been operating since 2001 (initially trading as part of the Lawfund national network, and as Professional Finance since late 2006), and our staff are currently as follows: - John Minihan, Business Development Manager - Donna Beazley, Lending Manager - Lyndon Dennis, Lending Manager - Rebecca Blake, Lending Manager (Central Coast) - Danielle Martin, Part Time BDM Assistant - Julie Minihan, Part Time BDM Assistant. Attached is a 2 page document that provides you with a summary of what we do, the services we provide, and some info on us. All of our Lending Managers are experienced and Accredited Mortgage Consultants with the Mortgage & Finance Association of Australia. John has been around from the outset, after 20 years with Westpac, of which the last 12 years were in various business and personal lending roles. Donna joined us in 2004, after 17 years with Westpac, the last 10 years of which were in personal and business lending roles. Rebecca joined us about 12 months ago, and is based on the Central Coast. Lyndon is the newest addition to our team, having been a mortgage broker in Port Macquarie for the last 5 years, and prior to this, having been a mortgage broker in Sydney for the previous 3 years. Julie & Danielle job share as John’s assistant, assisting with his lending matters plus the general running of the office, including assisting the other Lending Manages with their clients’ in need. (L to R: Julie, John, Danielle, Lyndon & Donna)
Current Interest Rate Outlook
The Reserve Bank lifted interest rates four times in the past year – the most significant tightening cycle in eight years. But after the last move in March, the Reserve Bank has remained on the interest rate sidelines, content that the extent of tightening has been sufficient – so far at least – to restrain inflationary pressures. ¹ The Australian economy was doing well up until the start of 2008, but interest rate hikes, higher living costs and a weaker sharemarket have taken their toll on consumers. While budgets remain in good shape, consumers have elected to cut back on spending and borrowing – precisely the response sought by the RBA to keep inflationary pressures under control. ¹ Nevertheless, the general view is that Reserve Bank retains its bias to lift rates, if required. As a result, the risk is that the Reserve Bank will lift rates again by a quarter of a per cent in the next six months. ¹ At the moment, the fixed interest rates are around 0.5% pa above the better variable rates available. So with the above views, and the general expectation that variable rates will ease in 2009, it is not an easy decision as to whether borrowers should go fixed or variable. If you would like to discuss your particular circumstances, please do not hesitate to give us a call. ¹ Extracts from CommSec Economics 1/7/08
July 2008
Shop 20 Peachtree Walk Arcade, 78 Horton St, Port Macquarie NSW 2444 Phone: 02 6583 1299 Fax: 02 6583 2383 www.professionalmortgagebrokers.com.au
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REAL ESTATE AUCTIONS: TRICKS OF THE TRADE
If you have found a suitable Auction Property you wish to purchase, what should you do?
1. Inform the agent of your interest leave your contact details and request to be kept informed in the event that prior offers are to be considered. 2. Familiarise yourself with the local area, services and facilities. 3. Attend similar auctions to better understand the auction process and compare prices. 4. Ensure your finance is approved prior to bidding and that you have organised ready access to 10% deposit. 5. If you have any doubts about the structural condition or any other aspects of the property, organise a building inspection prior to bidding. 6. Check the contract, title and council certificates before commencement of the auction. 7. If you require any variations to the standard terms and conditions, this must be negotiated prior to auction with the agent and ensure approval is evidenced in writing. 8. Advise the agent if you have instructed a third party to bid on your behalf at the auction. The person bidding on your behalf will be asked to sign the contract as purchaser unless they produce written authority from you stating that they are purchasing on your behalf.
Bid strongly and with confidence this shows people you’re serious about buying. Bid quickly – if you hesitate, others think this is your last bid, which encourages them to keep going. Likewise, you should realise that others who are bidding quickly and aggressively are trying to scare you off. Start bidding when the figure is below or within your price range. Don’t be shy about opening the bidding at a figure to suit you. The auctioneer will set the bidding increments depending on the price bracket of the property. Bid in these increments if you can, but don’t be afraid to nominate a higher or lower increment. However, the auctioneer has the right to accept or reject the bids in the best interests of the vendor. When the bidding slows or stops at a figure suitable to the vendor, as a precaution and to assist under bidders and any last minute bidders, the auctioneer will give the first call, then a second call and finally a third and final call, then will bring the hammer down: “Sold”. For more tricks of the trade, visit www.auctioneers.com.au
Source: Society of Auctioneers and Appraisers (SA) Incorporated.
Benefits of consolidating debt: Debts are conveniently merged with a single dramatically lower interest rate. Similar monthly repayments give you the opportunity to save. One combined repayment alleviates forgetting to pay. Prevents further financial losses. Helps rebuild your credit history. Reduces stress of allocating funds to multiple creditors Reduces accrued interest and fees.
Plan of action
Do your sums: Whether you’re topping up your existing mortgage, or refinancing & taking a higher loan, it’s unlikely to be free. Add up administration charges & fees from your financial provider that may apply before making the switch. Maintain the repayments: Because your home loan will have a lower interest rate & will be repaid over many years, the minimum repayment will usually be quite a bit lower than the same debt on a personal loan or credit card. This will extend the loan’s length of time, so despite a lower interest rate, the actual interest rate cost you pay may be considerably higher than if you left your debt as it was. Close off excess or unnecessary credit cards: access to easy credit is a mineshaft of financial catastrophe for most Australians, causing indiscriminate spending. Consolidating your debt but continuing to spend on your credit card is an all too common trap. Change your spending habits: Employ a stringent budget & commit to it. Look carefully at changing your spending habits by improvising on ways you can save, while seeking additional sources of income such as part time work, downgrading the car and dining out less frequently. Live on less than you make by becoming conservative, penny pinch where possible and you’ll see the difference. If you would like to discuss your particular circumstances, please do not hesitate to give us a call.
Source: Your Mortgage yourmortgage.com.au Magazine –
THE INS AND OUTS OF DEBT CONSOLIDATION
Debt consolidation reduces overall debt at the onset of the plan by combining several loans or debts into one low payment, and eases the burden of juggling several separate monthly repayments. Creditors are paid on a pro rata basis over a period of time. If your one aggregated payment is significantly less than the sum of all the other monthly payments that are consolidated and you can meet the new repayment amount on top of your financial day-to-day commitments, then debt consolidation may be a solution.
Bidding tips:
Establish a limit of how much you intend to spend to purchase the property. Bid clearly and precisely, don’t leave a bid until the last second or you may be missed.
July 2008
Shop 20 Peachtree Walk Arcade, 78 Horton St, Port Macquarie NSW 2444 Phone: 02 6583 1299 Fax: 02 6583 2383 www.professionalmortgagebrokers.com.au
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July 2008
Shop 20 Peachtree Walk Arcade, 78 Horton St, Port Macquarie NSW 2444 Phone: 02 6583 1299 Fax: 02 6583 2383 www.professionalmortgagebrokers.com.au
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