Consolidate your debts

If December was the time to be Merry, is the New Year the time to be sorry?

How great was Christmas and all the school and summer holidays? The lucky ones among us have had a couple of weeks off to spend with family and friends and had a great time.

debtNow that we're well into 2019 and so the hangover begins as the credit card bills come in.

What can you do?
Pay close to 20% interest and tough it out, hoping to be able to pay the card down as soon as you can, or pay the minimum each month and on it goes on, and on, and on… the important thing now is to not bury your head in the sand or to be embarrassed to find a solution.

The alternative is to try to consolidate your debts – home loan, car loan, personal loan, credit cards, as much as possible all into one loan at the cheapest rate that you can access. Just as important when you are doing this is to set yourself a budget that you will stick to so January 2020 doesn't cause as much pain as the current one.

If you want to spend the average of $3,800 (apparently that is what we all spend on average at Christmas on food, drinks, and gifts) the answer is to start now – pay $300 a month extra off your home loan – you can afford it now that you have consolidated your loans – so by the end of the year you have a kitty of $3,600 ready and waiting for you. Yes, the discipline is hard to start with, but it gets easier as the months pass.

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Interest rates

Mortgages & Lending: to fix or not to fix?

With official cash rates on hold for just over 2 years, is now the time to fix your home loan interest rates?

David SeymourIt would be crystal ball gazing to suggest where interest rates are going. We will leave that up to the economists. Some of the trends we are seeing are:

  • Lenders making small adjustments to variable rates as they jockey for position in a competitive market
  • A number of lenders offering special offers to new customers only (meaning existing customers are left on higher variable rates)
  • Mutterings from banks that they are under increased pricing pressure to increase rates
  • Those same banks reducing fixed rates

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Rent vs buy

Why rent?

Did you know that with current interest rates (based on an interest rate of 3.75%) each $100 per week in rent you pay may support a loan of about $95,000? 

propertySo, if you're paying $400 a week rent you may be able to support a loan of $380,000. 

If you think that you don't have enough deposit chat to us anyway. There may still be options using lenders mortgage insurance or family guarantees to get you into your new home. 

Don't delay; there is a Better Way. For an outline of the options available, email or phone Collins Hume Lending Specialist David Seymour on 0418 785 747. 

David Seymour is an Authorised Credit Rep No 477331 of Regional Finance Solutions Pty Ltd ABN 71163893945 Aust Credit License 484980.

Equipment loans

Are your tax liabilities up to date?

Many small businesses have previously treated the ATO as an overdraft or line of credit to fund their business when cash flow has been tight. 

credit scoreWhile this was never a great idea, it is now worse than ever to do this. 

But why?

Firstly, until this year the ATO never reported your debt to the credit reporting agencies – but they do now, meaning that your credit rating can be adversely impacted by not paying your tax (and this includes your GST payments).

Secondly, most lenders are now asking you to provide a report from the ATO showing that you have been paying your liabilities promptly – this report routinely goes back 12 months. So if you pay late it will impact on your ability to obtain a loan for at least 12 months unless you have a really good reason.

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Mortgage broker payments

How and why a mortgage broker gets paid

If you use a mortgage broker, you do not pay for their services. The lender that gets your business pays the broker for your business. 

David SeymourGenerally, a mortgage broker gets paid in two ways – an upfront fee and a trail fee. Across the board the payments from most lenders do not vary much so there should be no bias in the lenders that a broker chooses to discuss with you. 

The upfront is paid by the lender for the introduction of your business. This fee replaces many of the costs a lender would have otherwise incurred in winning your business – staff wages, branches, advertising, electricity, telephones, superannuation – all those types of expenses.

The trail is paid each month based on the balance outstanding each month for the life of the loan. Many people ask why trail commissions exist and that is a fair question – the commission is paid to the broker so he or she can continue to provide you with assistance and support over the course of your loan. Simply speaking, if you have a problem with your loan, go back and talk to your broker and ask them to assist you, because they are being paid to look after you.

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