Tag: Astute St Leonards

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Don’t Worry: Are you Concerned about Servicing your Loan?

After a very difficult 2020 where many people lost their jobs, were furloughed or simply had their hours reduced, many home owners have been under increased worry and stress. If you are concerned about servicing your loan, reach out to Astute St Leonards for help.

As Australians everywhere take a close look at their financial circumstances and consider what could happen in 2021, mortgage brokers like Astute St Leonards stand ready to lend a helping hand.

Whether experiencing financial hardship through job loss, a reduction in work hours, or business disruption, an increasing number of Australians may be struggling to balance their books as a result of the Coronavirus, and in many cases are wondering how they will continue to pay the bills.

Difficulty with Repayments

According to research conducted by Finder last year, about one in five mortgage borrowers, or about two million Australian households, were struggling to make repayments, despite record low interest rates. With the challenging circumstances that have emerged since – despite lockdowns and restrictions easing, it is anticipated that these pressures will only increase this year forcing more people to require financial assistance.

Financial Relief Strategies

In this difficult time lenders responded by announcing financial relief strategies to deal with the initial income loss and many have kept these in place as State Governments bounce between lockdown and freedom. In an official Australian Banking Association (ABA) statement, CEO Anna Bligh said, “Banks stand ready to support customers and if anyone is in need of assistance, they shouldn’t wait but come forward as soon as possible”.

Different lenders have different assistance options. These may include waiving fees on early term deposit withdrawals, interest rate freezes on loans, options to defer or restructure home loan repayments and emergency credit card limit increases. Above all, with record low interest rates, a simple refinance may be a great option.

It is important to remember that mortgage brokers have the knowledge, experience and relationships necessary to assist people experiencing or expecting to have trouble paying their home loans as a result of changing circumstances. In times like these, the importance of mortgage brokers in assisting customers with hardship and facilitating access to credit cannot be overstated. For many Australians – particularly those in rural or regional areas – brokers may represent the only source of assistance. 

Expertise of Brokers is of Critical Support

Brokers’ expertise in helping customers navigate the complex home lending market – and their intimate understanding of their customers’ personal circumstances – means they are uniquely positioned to provide critical support for people when discussing hardship and available options with lenders.

If you are concerned about servicing your loan, need further guidance on hardship assistance, or have other questions about your loan arrangements, give Astute St Leonards a call on 02 8912 2139. We are hear to help!

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Everything you Need to Know about Exit Costs when Refinancing

Exit Costs when Refinancing

Here at Astute St Leonards, we have just completed a refinance for a client where we moved two fixed rate loans into a cheaper package. This raised the issues of exit costs and break fees because refinancing can be a great way to save money if you believe you are paying too much for your loan. However, there is more to it than just finding a loan with a lower interest rate and making the change. Before making the switch, ensure the savings you could make outweigh the fees involved. Here are the different exit costs to consider when refinancing:

Exit Fee

Although loans taken out after 1st July 2011 are not subject to deferred establishment, known as “exit” fees, those taken out prior may still be subjected to this fee. Also known as “early termination” or “early discharge” fees, they can sometimes be paid by your new lender but are normally applied to an early contract exit. We will assess whether your loan has exit fees applied or not.

Establishment Fee

Also known as “application“, “up-front” or “set-up” fees, these cover the lender’s cost of preparing the necessary documents for your new home loan. They are payable on most new loans, and the alternative to not paying this particular fee is being charged higher ongoing fees or even a higher rate for the life of the loan.

Mortgage Discharge Fee

Covering your early legal release from all mortgage obligations, this fee is not to be confused with an exit fee. Also known as a “settlement” or “termination” fee, its purpose is to compensate your lender for the revenue it may lose due to the contract break.

Lender’s Mortgage Insurance (LMI)

This non-transferrable premium means that if you hold less than 20 per cent equity at the time of your refinance, you may have to pay LMI even if you paid it on the original loan. Extra care is also needed here because, whether or not you hold 20% of the original valuation of the property, you may not if the property’s value has decreased and while LMI may not have been a consideration at all in the original loan, it may be payable on the refinance.

Stamp Duty

If your purpose for making the switch is to increase your loan amount – maybe to fund renovations – then stamp duty will apply only to the difference between the original loan amount and the refinanced loan amount. Different rules apply in different States, so it’s worth speaking with us to see if this charge applies.

Other Government Charges

Fees are applied for the registration and deregistration of a mortgage so that all claims on a property can be checked by any future buyers. Varying from State to State, these can potentially add up to $1,000 or more, so it is important to review the whole package before making the decision to refinance.

Break Fee

If you were on a fixed rate loan, your lender is likely to charge you a fee for ‘breaking’ out of the loan term. This fee varies depending on the amount owed, the interest rate you were locked into, the current interest rate and the duration of your loan. Each lender will have an algorithm to define this fee and it may not be easily defined without help.

In Summary

Although some of these fees can be negotiated by a broker, the total cost can be substantial. At Astute St Leonards, we can ensure that refinancing will help you achieve your goals while maintaining your capacity to service the debt. We will ensure you are only paying the relevant fees for your unique circumstance.

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Get Your Finance Broker Working for You!

Madison Wells Pty Ltd, trading as Astute St Leonards, has created a series of short videos to highlight how and why to use a finance broker for your home loans, cars loans or even a musical instrument or another asset! This video will show you how to get your finance broker working for you, especially if you are refinancing an expensive loan to a lower rate.

You can watch the other videos in the series here:
5 Great Reasons to use a Finance Broker
What to look for when Choosing a Broker
5 Key Ways a Finance Broker can help you

For more information and a free quote on any loan please give us a call on 02 8912 2139 or contact us through our Astute St Leonards page and you can get your finance broker working for you – i.e. us!

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A Buyer’s Agent Will Help you Purchase a New Home

aerial overview of port jackson

Buying a house, whether it is your first time, or something you have done several times in the past, is always a stressful period in anyone’s life. A buyer’s agent will help you purchase a new home and take the stress out of the process – especially if they have a network of professional services behind them to sort out all the niggling problems that arise.

A buyer’s agent is a licensed professional that will do the hard work on your behalf – the searching, evaluating and negotiating during the purchase. The key is that the Buyer’s Agent is on your side whereas a Real Estate Agent is focused on getting the best result for the seller, so in some cases they are caught in the middle wanting to help both sides of the transaction. Clearly the money will come from the seller, so the Real Estate Agent will always swing towards the sale, not the purchase!

Why use a Buyer’s Agent?

1st question: Who should use a buyer’s agent? Well, the answer is everyone!

Think about the process of buying and moving home, firstly, once you have decided on the area to live in, you need to start looking and figuring out the market and where your preferred facilities are, e.g. schools, churches, public transportation etc. All this takes time and effort, which you may need to cram into evenings and weekends thus reducing your downtime and costing money to travel to look at properties.

When you have found the property you want, you then need to start negotationg with the Real Estate Agent to get the price you want – or you have to get into the melee at an auction! Time is a big issue, especially if you have a family to raise and have commitments around their school and sports activities.

2nd question: Why should I use a buyer’s agent?

Clearly the first reason is that it will reduce the amount of time you spend doing all that research. Many buyer’s agents specialise in a handful of closely connected suburbs and they already know what is there and where the best streets are located. They have the local knowledge and can guide you through the whole process.

Buyer’s agents can also get access to the off-market properties, can get more accurate valuations and can access the latest market data, giving you the advice quickly – something that would take months to collated on your own.

Importantly, the network supporting the buyer’s agent can bring independant professionals to the process so that you are always getting accurate information and a quality service.

Jain & Co

Astute St Leonards recognises the value and power of using a buyer’s agent and we have partnered with Jain & Co to help our customers find their dream home. The Principal, Adil Jain, is focused on finding the best property for you, sifting through the clutter and acting as your representative at the auction or negotating the best price.

If you are looking to buy a property on the Lower North Shore (Mosman, Cremorne, Neutral Bay, Willoughby, Castlecrag, Middle Cove, Artarmon, Cammeray, Northbridge, Chatswood, North Sydney), the Northern Beaches (Manly, Freshwater, Balgowlah, Manly Vale, Dee Why, Brookvale, Avalon, Palm Beach, Collaroy) or even Sydney CBD and the Inner West, then give Adil a call on 0415 234 656.

A buyer’s agent will help you purchase a new home, so give Astute St Leonards a call to get a matching loan to help Adil buy your next home!

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5 Key Ways a Finance Broker Can Help You

This video is #3 in a short series of videos highlighting 5 key ways a finance broker can help you save time and sometimes money by finding a range of loans that you can choose from. Remember, when looking for a home loan, don’t let your Bank tell you what to do – this is a major decision and therefore you need as much information as possible.

Watch the first two videos here:
#1: 5 Great reasons to use a finance broker

#2: What to look when choosing a broker

Learn more about Astute St Leonards here or go to our Facebook page here. We hope you enjoy these 5 key ways a finance broker can help you and would be happy to have an initial discussion on your requirements.

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Make Your Meeting with a Broker a Productive One

If you’re looking for a home loan but are inexperienced with finance brokers, attending your first meeting with a broker like Astute St Leonards can be a nervous experience. Getting a home loan, after all, can be quite complex for anyone let alone a first-timer. There are lots of brokers like Astute St Leonards and there is a lot to learn. However there are many steps you can take to be confident that your appointment with us will be a success. Read on to see how you can make your meeting with a broker a productive one!

A good starting point is to familiarise yourself with the expectations of the first appointment between a broker and yourself. We will ask you about your medium and long-term financial goals, the amount you want to borrow, comparisons of your home loan options and your understanding of the fees, costs and conditions attached to home loans. Knowing the direction the appointment will likely take lets you participate more actively in the conversation. This means you can better articulate your needs to us and ultimately make the right decision for your requirements.

It’s also recommended that you give some consideration before the meeting to the types of questions you wish to ask us. Questions that can be of use include such things as loan types (such as term, repayment options and interest rate types), the types of ongoing fees attached to various loans (such as early exit, late payment, break and redraw fees) and the typical timeframe for a loan settlement.

These questions might pop into your head spontaneously during the meeting but preparing them in advance is a good way to refine them. By doing so, you are in a position to get more specific information. Astute St Leonards will always document the answers in an email, so that you have a record of the information.

It is common industry practice, too, for a broker to conduct a needs assessment prior to your face-to-face appointment – so you may be asked some pre-appointment questions.  To assist in answering these, you’ll need to supply information about your employment history, assets and expenses.

At the appointment it will save you time and effort to prepare and then bring the required documentation with you. This can include ID, transaction histories, tax returns, rental income statements and borrowing documents such as “contract of sale” and proof that you have the deposit for a property. It’s mandatory for brokers to maintain the confidentiality of information that you provide to them and only pass on information necessary to enable them to lodge your loan application or where required by law.

Research, Research, Research – do your homework!

The other preparation you can do to make your meeting with a broker a productive one, is to research your broker – check us out and make sure we align with you. Read more of our content on our web site and see us on social media either as Astute St Leonards or our parent company Madison Wells Pty Ltd. This can give you a good indication of our knowledge and expertise and highlight topics you can discuss with us. You can also determine if we specialise in any types of loans that match your needs, where we are located and our panel of lenders – 17 and counting! Finally, you should investigate their qualifications and the brokerage that supports them.

Brokers should also be accredited because we are held to higher standards. By verifying they are accredited, you can approach the meeting knowing your broker is appropriately educated, adheres to a strict and professional code of practice and is authorised to access a large range of products offered by a variety of lenders.

We are here to not only be your finance broker, but also a partner in helping you to plan your future asset purchases. To that end, we would be happy to collaborate with your accountant or financial planner so that we are all working as a team for you. Our view is that you should be in cotrol, after all you are the decision-maker, so it is important that you make your meeting with a broker a productive one.

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What to Look for When Choosing a Broker

Astute St Leonards, the finance broking arm of Madison Wells recently published a small series of videos and the second in the series explains what to look for when choosing a broker. There are many many brokers out in the market and not all of them are suitable. Watch this video to see what you should be testing for so that the broker you choose is aligned to your needs, requirements and importantly, ethics.

You can watch the first video in the series here: 5 Great Reasons to Use a Broker.

Astute St Leonards is focused on your needs and requirements. We will always test to see that the loans recommended are suitable for your current stage of life and forward into the future. We are accredited with over 17 different lenders and have a compliance process that provides you with a documented reason as to the choices provided and our recommendation. The ultimate decision is always yours.

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Buy Now Pay Later: The Hidden Dangers

The Buy Now Pay Later (BNPL) sector is winning-over the youth demographic with the promise of instant gratification. However leading mortgage brokers are warning that with every sugar-high comes the risk of a corresponding low.

‘Buy Now Pay Later’ providers such as AfterPay, Zip Pay and Pay It Later have experienced massive growth in popularity. The number of users jumped from 400,000 to approximately 2 million between 2015 and 2018 and have continued to rise. With COVID, many more shops have signed up in an attempt to persuade more buyers to spend with them.

Driven by a simple proposition whereby the BNPL provider pays the merchant, allowing the customer to obtain the goods or receive a service immediately while subsequently paying off the debt generally through instalments, Buy Now Pay Later presents a tempting offering. However, this is no different to using a credit card – with less governance!

But as the sector’s breakneck growth continues, mortgage professionals are warning users – particularly in the younger demographic – to be cautious of overdoing it as this could risk affecting their chances of securing a home loan further down the track. “It’s the layby of our day but in reverse. It’s your forward credit for an item, which I don’t agree with,” said one leading mortgage broker.

In theory it makes sense. A consumer gets the item or service and pays it off over instalments, so they’re actually pushing forward the liability. In some cases it means paying a higher interest rate than a credit card with additional monthly fees. This might be OK for someone that manages their money well, if they pay off the item on time and use their mortgage offset account correctly. This way they are delaying the expense and offsetting more of their savings against their home loan.

Buyer Beware

However there’s probably one per cent of people doing that and the rest are spending beyond their means. As a result, there may be a stigma associated with using BNPL schemes rather than paying up-front or using a fully vetted personal loan from an established lender. Utilising a Buy Now Pay Later method may send the wrong message to a bank. If a lender sees many BNPL transactions showing frequently on a client’s bank statements, that will trigger more questions about their spending behaviours. Ultimately this may mean the bank chooses to decline the application.

We would much prefer to see our clients save for smaller value items, utilise personal loans for bigger purchases and demonstrate good financial habits. If you are concerned about your level of expenditure or your ability to secure a home loan, a conversation with Astute St Leonards could set you on the right path.

It’s important to appropriately manage your expenses well in advance of applying for a home loan. That way you can show that you can save and afford to service a mortgage when the time comes.

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5 Great Reasons to Use a Broker

We recently created a series of four simple videos to explain the benefits of using a financial broker. If you haven’t seen it on our Youtube channel (with nearly 10,000 views) then have a look at the first edition here. In this video, I give 5 great reasons to use a broker when looking for a home loan or any financial loan.

Over the next month, we’ll show the other videos in the series! In the meantime have a look at our Astute St Leonards page to see the breadth of services we offer:

  • Home loans and mortgages.
  • Refinancing existing loans to a lower rate.
  • Finance for renovations.
  • Construction loans.
  • New and used car loans.
  • Car restorations.
  • Musical instrument purchases (talk to use about our preferred partners).

We are your local resource for all things finance, so start by learning the 5 great reasons to use a broker like Astute St Leonards.

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Don’t Forget the Extra Costs of Buying a Home!

When taking out a mortgage, don’t forget the extra costs of buying a home – consider the associated fees and expenses that you will incur. Here are some of the extra costs that you’ll need to consider when you get a home loan:

Home Loan Application Fees

Most lenders charge a home loan application fee. This can range from loan to loan, and covers:

  • Loan contracts
  • Property title checks
  • Credit checks
  • Attending a settlement
Mortgage Fees and Costs
  • Mortgage establishment fees – Lenders generally charge a mortgage establishment fee – a fee for setting up a mortgage.
  • Property valuation – A third party – chosen by the lender – is appointed to determine the value of your land and improvements.
  • Mortgage registration – Your mortgage deeds need to be registered with the Government.
  • Mortgage stamp duty – Some State Governments charges stamp duty to register your mortgage.
  • Lenders mortgage insurance – If you don’t have 20% of the purchase price or the value of the property, the lender will require you to pay  for a lenders mortgage insurance policy that covers their risk in the event you default on your repayments.
Property Fees and Costs
  • Building, Pest and Electrical Inspection fees – It’s wise to have your new property inspected for any structural or electrical problems and for pests (e.g. termites).
  • Stamp Duty – Governments charge Stamp Duty to transfer the ownership of a property.
  • Registration of Transfer Fee – The new owner of the property must be registered at the Land Titles Office.
  • Legal fees – You generally need to pay a Solicitor of Settlement Agent to handle the transfer of ownership of the property on your behalf
  • Home & contents insurance – Most homeowners insure their home and contents against a range of threats: burglary, fire, storm, etc. Lenders will insist that your property is insured while you have a mortgage.
  • Life and income protection insurance – Borrowers should consider protecting their incomes and themselves while they have a mortgage.
  • Utility costs – Connecting electricity, gas and telephone can attract a fee.
  • Council Rates – Your local council charges rates to cover garbage collection and a host of other services.
  • Water Rates – The water corporation charges rates for the supply and upkeep of water to your property.
  • Body corporate fees – If you buy an apartment or Strata Titled property, body corporate fees will be charged. Some buildings can have very high feed – particularly if the building is in need of a major work (e.g. concrete cancer, security upgrade, new hot water system, etc) or if there are lifts, pools and other communal facilities. This should be a key question to ask before agreeing to buy an apartment.
  • Maintenance costs – Don’t forget to make provision for regular maintenance on your home – even if you decide not to undertake significant renovation.

There is a lot to consider when you are ready to buy a new home – especially if this is the first time you have bought a home in Australia. Our advice is to talk through these when you are reviewing the options for your home loan – in some cases it may help your loan application if you have a plan to cover the ongoing costs of ownership.

Make sure that you don’t forget these extra costs when buying a new home – talk to us at Madison Wells Pty Ltd t/a Astute St Leonards to help with your planning! We are here to help you through the process.