January/ February 20 0 9 ne WSLe T T er
If ever there was such potential for the property
market, it's now! With falling interest rates, generous
first home owner grants, deposit saver incentives,
strong demand coming off the back of a general Come First
decline in property values, conditions appear
stacked in favour of the buyer.
We begin our newsletter with details of the $14,000 spreading
upfront injection the Federal Government has made eConomiC Cheer
robert Knight into the First Home buyers market. When combined
with existing state government grants, it marks a
significant increase to a deposit for a first home.
The First Home buyer boost is part of a broader economic stimulus strategy, which
we cover in the articles ‘Spreading economic Cheer’ and ‘non banks Funding boost’
on pages 2 & 3.
We follow this up with an article on the pressures of lending money to family and
how to protect yourself emotionally and financially.
enjoy this newsletter and feel free to share it with family and friends.
Home Buyers Come First
starting the new Year in a new home to be built around australia over the next
has become a happy reality for many 12 months.
australians, thanks to the Federal
The good news for first home owners
Government’s First home Buyer Boost.
doesn’t stop there, as the grant runs
effective from october 2008, the First on top of the government’s first home
home owner Grant has now been doubled saver initiative (a special-purpose savings
to $14,000 for first home owners who account to which the government makes
purchase an established home. For those contributions), plus first home owner
who build a new home or buy a newly grants that are administered by each state
constructed home, there has been a (see ‘Did You know’ box on page 3). stamp
tripling of the existing grant, taking it to a duty concessions are also available, many
whopping $21,000. of which have undergone changes over
the last year to encourage home buyers
The boost was announced as part of a
into the market.
package to stimulate housing activity,
which is considered essential to the as your mortgage broker we can make
economy’s overall performance. The sense of all these rebates, so give us a call
housing industry association predicts the to make sure you are taking advantage of
move will result in an extra 15,000 houses all your entitlements.
We’re a member of the Mortgage & Finance association of australia (MFaa), the peak professional body.
as a member, we adhere to the industry Code of Practice which requires high standards, fair business practices,
ethical behaviour and compliance with the letter and the spirit of relevant laws and regulations - all in the interest
of you, the borrower.
if a strong economy was on December also saw the first For the family, $3.9-billion worth of
your Christmas wish list, improvement in housing affordability support has been made available,
let’s hope the recent Federal since early 2007. The real estate with around 3.9 million children
government’s economic stimulus institute of australia housing receiving a $1,000 one-off benefit in
package does its work. affordability report released on the weeks leading up to Christmas.
recipients of Family Tax Benefit
Designed to provide practical 1 December showed the percentage
Part a, Youth allowance, abstudy
support for pensioners, families and of household income required to
or the Veteran Children’s education
first home buyers, the $10.4 billion meet loan repayments decreased
scheme were also eligible.
package is also expected to boost by 0.7 per cent over the third
growth in the domestic economy. quarter to 38.8 per cent. The government also targeted
spending on infrastructure, jobs and
money needs to be changing hands it seems the government’s spending training. a total of $187 million will
to keep the economy alive, which plan coupled with the reserve Bank’s be spent to create an extra 56,000
makes strong consumer spending big cuts in interest rates finally gave training places this financial year.
an important defence for countering us news we could smile about! The productivity places program will
the global economic crisis. be effectively doubled from 57,000
Pensioners were among
The release of the Federal the key beneficiaries of the to 113,000, taking the government’s
Government’s stimulus package government handout, with a investment in training places since
in mid-october prompted an april to more than $400 million.
$4-billion down payment set aside
immediate increase in consumer a second economic stimulus package
for long term pension reform. During
confidence. The Westpac and has been hinted at for the middle
December single pensioners received
melbourne institute consumer of the year, but is only expected if
a lump sum payment of $1,400, while
sentiment survey for november the global financial crisis worsens.
pensioner couples received $2,100.
showed a 4.3 per cent rise in the While reserve Bank governor Glenn
index to 85.5, up from 82 in october. First home buyers also came out on stevens acknowledges the situation
The number of people planning to top, with a $1.5 billion investment to is serious, he says the economy's
buy a home rose by 21 per cent, to help australians gain their first keys long-term prospects belie some of
its highest level since march 2006. to a new home (see page 1 article). the gloomy talk that is around.
Debt Man Walking: A 10-Step Investment and Gearing
Guide for Generation X
Best-selling author Bruce Brammall’s latest book, Debt man Walking: a 10-step investment
and Gearing Guide for Generation X, grabs his target audience by using punchy pop culture
references from the 70s and 80s to spice up the financial content. Brammall, a financial advisor,
successful investor and journalist, encourages readers to follow Lou reed’s lead and Take a
Walk on the Wild side with measured investment debt to reap long-term rewards. it’s easy-to-
read style, combines memories, music and movies to help readers make mountains of money!
Debt man Walking is a practical guide, but it introduces some controversial concepts and
suggests Gen Xers should take on, rather than pay down, debt as part of a recipe for success.
You can obtain a copy of Debt man Walking with Free postage & handling for the retail price of
$34.95 by clicking through to the website and ordering online (www.debtman.com.au).
JanUarY/FeBrUarY 20 09 ne WsLe T Ter
Did you know?
Depending on which state you live in, you could be entitled to up to $29,000 in government rebates when you buy
your first home. Check out the table below to find out how much you could receive in combined federal and state
First home Buyer grants (this includes the recent Federal Government’s First home owner Boost).
state established home newly constructed home on top of this, you may also
be entitled to a number of
nsW $14,000 $24,000
stamp duty concessions.
viC $17,000 $26,000 - $29,000 Contact us for assistance
QLd $14,000 $21,000 with finding out what
aCt $14,000 $21,000 rebates and concessions you
Wa $14,000 $21,000 are eligible for, as well as a
sa $18,000 $25,000 helping hand in completing
nt $14,000 $21,000
tas $14,000 $21,000
a recent government injection bank sector has been hit hard, with
Confidence in the non-bank sector
of $8 billion into the mortgage rmBs now being issued at a rate has now returned, with a recent
market has strengthened the of around $830 million a month, mortgage Business poll showing that
position of non-bank lenders. compared with $6 billion a month 50 per cent of brokers are now more
before the crisis. This has weakened open to using non-bank products
For you and i this means the capacity of mortgage lenders compared to 12 months ago.
improved competition and the reliant on the primary rmBs market non-bank lenders have an important
promise of more choice in home as a source of funding to compete. place in the mortgage market
loan rates and products. The purchase of rmBs by the because they have increased the
The Treasurer has announced that government will level the playing choice available to borrowers. Before
the australian office of Financial field and ensure that non-bank they came on the scene, the four big
management will purchase australian lenders now have access to banks called the shots when it came
residential mortgage-backed securities funding for their operations. to home loan rates and products.
(rmBs) as part of the government’s For the government it means our role as your mortgage broker
commitment to ease credit shortages exchanging cash on their balance sheet is to work with a large panel of
in the non-banking credit market. for new prime aaa rated securities. in lenders to find a loan that best suits
This is a type of security whose cash other words, the government will own your needs. as non-bank lenders
flow comes from residential debt mortgages and give a return to the recover their position to once more
such as mortgages, home-equity taxpayer. The securities will be held compete effectively with banks, we
loans and subprime mortgages. This by the aoFm until market conditions should in time see a flow-through
key source of funds for the non- normalise and they can be sold. in savings for home buyers.
JanUarY/FeBrUarY 20 09 ne WsLe T Ter
steve Willey had run his own cafe their own way, as well
for a number of years when he as to experience the full
started having trouble paying the consequences of their
bills. he asked his parents, Jan and actions. There is no guilt
michael, to sign a mortgage over or shame in promoting the
their family home to provide him merits of hard work and patience when
with a bank overdraft. Within a year it comes to achieving monetary goals.
steve’s business had gone under
if you decide there is no other option
and the bank sold the parent’s
but to lend to family, here are some
home to recoup their investment.
tips to help protect yourself.
already in their retirement, Jan
• Explore all other avenues before The aim of Integrity Innovative Loan Solutions is the provision
and michael found themselves
agreeing to lend money. Be cautious of a competent, professional and efficient customer service
forced out of a home that held
and look at the pros and cons delivered with integrity to clients. We deal with over 40
a lifetime of memories. They felt
of different lending options. Lenders. Integrity Innovative Loan Solutions is a full member
angry and let down, while steve
of Mortgage & Finance Association of Australia and Credit
felt humiliated at what he had done • Don’t lend what you can’t afford Ombudsman Service Limited.
to the family. The once trusting to lose. ask yourself whether you
relationship between parents and would be comfortable giving Clients deal with a highly experienced and qualified
son was never the same again. the loan money away as a gift. consultant who has the flexibility of visiting at work or home.
if the answer is no, then you are The company principal, Robert Knight, has worked in the
Unfortunately this is an all too
not in a position to loan it. finance industry for 25 years, having held senior management
common scenario that occurs when
roles with Connect Credit Union and AMP Banking.
lending money to family. When • Be aware of all the risks. Go into
money goes down the tube and the loan with your eyes open, Robert has formal qualifications in Business (Accounting),
people suffer financial consequences, knowing what the consequences Applied Science (Building & Architectural Practice), Mortgage
relationships invariably turn sour. could be for you down the track. Lending and Mortgage Broking.
While it’s natural instinct to want • Put everything in writing. Robert has also owned a successful property development
to bail out your loved ones, there seek legal advice and sign a business and rental properties, as such is well attuned to the
are usually better ways to deal with formal loan document that needs of small business and property investors.
financial difficulties. sometimes spells out the terms of the deal,
love is about allowing others to find Integrity Innovative Loan Solutions was established by Robert
including a repayment plan.
in July 2002.
To ensure complete transparency in our transactions with
DISCLaIMer: This newsletter is intended to provide general news and information only.
readers should rely on their own enquiries before making any decisions touching their own interests.
clients, Integrity Innovative Loan Solutions has voluntarily
Please do not rely on any part of this newsletter as a substitute for specific legal or financial advise. adopted the Finance Brokers Contract, currently compulsory
only in NSW and VIC. Through this process, clients are fully
aware of remuneration paid.
GPO box 1809
Hobart TaS 7001 t 03 6223 4322
f 03 6223 2203
m 0438 233 324