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Carol from Vista Financial

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  1. Carol from Vista Financial

    RBA cash rate decision 2 October 2018

    Hi all Bit behind the 8 ball and catching up on some posts after a few busy weeks. A lot happening in the mortgage market with rate moves, refinance offers, lending policy changes, the Banking Royal Commission interim report released and more! First things first - the RBA. Last week to no ones surprise the RBA left rates on hold again: "In Australia, money-market interest rates are higher than they were at the start of the year, although they have declined since the end of June. In response, some lenders have increased their standard variable mortgage rates by small amounts, while at the same time reducing mortgage rates for some new loans. ...Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Growth in credit extended to owner-occupiers remains robust, but demand by investors has slowed noticeably as the dynamics of the housing market have changed. Credit conditions are tighter than they have been for some time, although mortgage rates remain low and there is strong competition for borrowers of high credit quality." Full release can be read here More on the rest soon, watch this space!
  2. Carol from Vista Financial

    Where to retire to in South QLD

    Autumn leaves in Hahndorf are worth a drive for me! Yes Brissie is a lovely city, lots to do but can escape too. House sitting is a great idea, surely there are others that don't have pets and just want someone to watch over the house.... and look after the garden (extra points for pottering opportunities)!
  3. Carol from Vista Financial

    Where to retire to in South QLD

    Warm and cozy is definitely the go and yes the chill here is something! Underfloor heating is something I dream about in winter. Hahndorf is generally a few degrees colder though too? My sister lives in Brisbane and says the winters are much milder. Caloundra is a beautiful place but price wise obviously depends what you are after i guess unit/house etc.? Good excuse for a holiday to go suss it all out, good luck!
  4. Carol from Vista Financial

    The UK house selling system

    Can feel your pain @Davo453! Yes, the UK system baffles me and not sure how it has remained like this for so long. Hope the chain comes to fruition for you soon! Cheers Carol
  5. Carol from Vista Financial

    Westpac rates increasing... will the others follow suit?

    Seems NAB are taking advantage of the situation here... As you may have heard already there has been no move by NAB to increase their rates - their media statement saying they are holding them for now in an effort to 'rebuild customer loyalty'. Is this the case or are they just being opportunistic in an effort to capture market share? If they do eventually move rates to account for increased funding costs like the others, are they merely setting themselves up for a bigger fall from a moral high ground? I think their marketing team will have to prove their worth and really pull a rabbit out the hat if/when they do increase them.
  6. Carol from Vista Financial

    Westpac rates increasing... will the others follow suit?

    ANZ increases their rates first, CBA follows a few minutes later CBA increase by 0.15% ANZ increase by 0.16% You can read their media releases here: CBA announcement ANZ announcement (note here they have advised that those people living in postcodes they have deemed as drought affected will also have an equivalent increase in a discount - which means they don't escape the base rate rise, but are given a discount of the same 0.16% so they aren't impacted) No word on NAB just yet.
  7. Carol from Vista Financial

    Current mortgage rates and special offers

    Happy Thursday everyone! Apologies I didn't get a chance to post yesterday, got caught up in a few calculations from people wanting to vote with their feet and move banks. Have you thought of sacking your bank? I am a coffee addict, and if the barista gets it wrong, I sack them. I go somewhere else. I sadly throw my loyalty card in the bin and get mad that they didn't reward me as an existing loyal customer. Then I move on and start fresh somewhere else where they don't burn the milk and value the outrageous $4-something that I fork out for someone else to make my caffeine fix in the mornings. Why is it we don't think the same way with something that costs us hundreds per month? Why don't we shop around? Because it is too hard, and takes too much effort, and no one likes paperwork. So off it goes into the too hard basket to sit indefinitely next to cleaning-out-the-spare-room. But yet we will invest the time to shop around for clothes, food, shoes, coffee, you name it. Why is this relevant today? Because unless you choose to truly - thoroughly - investigate your options other than glance at the specials I put up weekly, you won't actually know the potential savings out there. Inaction is still a choice, so invest the time to do the sums yourself, or get someone else to. Despite Westpac, Suncorp and Adelaide Bank increasing their rates and other banks reducing their rates to try capture those annoyed clients serious about moving, all the above offers I have mentioned still remain the same, and have not actually changed. Why? Because lenders rely on your inaction. They rely on the fact that despite public uproar, Royal Commissions and disappointment, the majority still do nothing and stay where they are. So why would need to keep winning your business? They don't need to. Because if the vast majority of their existing clients don't actually jump up and leave, why would they have to reward loyalty and incite any true competition? I can't count the number of times that clients have tried and tried to get a better deal with their existing lender, get nowhere, go through the process of getting a refinance approved, only to finally have their bank call them when they receive a mortgage discharge request and offer them exactly what they have been asking for all along. "Hang on, you're actually going leave? Oh, don't do that, here, have this, we still love you". To top it off, many clients then end up staying! And I can understand this, they got what they wanted. But so did the bank. They leave it to the absolute last minute, call your bluff, and only then concede a tiny fraction of their overall profit at the eleventh hour to keep you after all. Does this sound like a lender that truly values your loyalty? Don't kid yourself. We are not special to them. But if we continue this cycle, there is no reason for them to change their behaviour. So do your homework, don't choose inaction. Do some sums here as a starting point. There's more to it than that, but it's a start. It could well be that you won't benefit at all, and that is fine! At least you checked! And at the end of the day if you can't be bothered, take it out of the too-hard-basket and ask me to do it, it's my job. Until next time.
  8. Carol from Vista Financial

    RBA cash rate decision 4 September 2018

    No change again, rate remains on hold: "Conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low. Housing credit growth has declined to an annual rate of 5½ per cent. This is largely due to reduced demand by investors as the dynamics of the housing market have changed. Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets. There is competition for borrowers of high credit quality." - Statement by Philip Lowe, Governor: Monetary Policy Decision, 4th September 2018 But as we can see from this past week, this is only one factor used by lenders in determining whether or not to move on rates. Is it to cover cost of wholesale funding or to recoup upcoming fees for civil penalties? Watch this space. Full release by RBA available here.
  9. Carol from Vista Financial

    Updates from ASIC - Responsible Lending

    Westpac admits to breaching responsible lending obligations and now up for a $35 million civil penalty: "If approved by the Federal Court, this will represent the largest civil penalty awarded under the National Credit Act." - recent ASIC media release today 4th September 2018 Read the full ASIC media release here.
  10. Carol from Vista Financial

    Westpac rates increasing... will the others follow suit?

    Well. That didn't take long. Not the other big four though....yet. Adelaide Bank and Suncorp have jumped on the bandwagon and announced further rate increases today: "Suncorp will increase all variable home loan rates by 0.17 percentage points from September 14. Suncorp's small business loans will rise by 0.1 percentage points. Adelaide Bank, a subsidiary of the Bendigo and Adelaide Bank, will raise rates on its owner-occupier and investor loans by between 0.12 and 0.4 percentage points." Challenging market and cost of funding still quoted: https://www.afr.com/business/banking-and-finance/adelaide-bank-blames-challenging-market-for-raising-variable-rates-by-12bp-20180830-h14rhc The day is not over yet....
  11. Carol from Vista Financial

    Mortgage Income Multiples

    They sure did! I made some comments here: Hmmmm, wonder how they came up with the 'costs', have you got the link to the original so I can take a peek please @s713?
  12. So late yesterday (after I finished my other post, naturally) Westpac announced it will be increasing rates by 0.14% p.a. quoting increased wholesale funding: In particular the bank bill swap rate, which is a key wholesale funding rate for mortgages, increased by about 25 basis points between February and March this year and has remained elevated. “We initially hoped that this increase would be temporary, and therefore we have incurred these costs over the last six months. The rate changes announced today will not recover these costs..." - Official Westpac Media Release, 29 August 2018 I.e we didn't increase them then, but we are now, and not by the full amount needed cover costs. Interpret that as you may. So the big question is when/if this will cause a domino effect with the other big banks? There have been rises in smaller banks but none of the big four, perhaps due to the target already firmly on their backs as a result of the Royal Commission. Will they follow suit hoping that Westpac will take the first wave of anger and disapproval? Or will they stand fast in an effort to claw back a little customer sentiment? (Along with some nicely crafted marketing giving themselves a cheeky gold star of course). No doubt we will find out shortly. Bottom line, the only real way to guarantee your rate and repayment is to be on a fixed rate, but they come with restrictions - so do you homework first to see if it is right for you. As I have already mentioned elsewhere rates are so low at the moment that when they eventually go up again it will be a shock to the system for many that have only ever known low rate environments. So prepare yourselves. Those of the era of double-digit interest rates know what I mean. The RBA knows it too and have flagged rising rates as something to prepare for. Some economists now argue this recent move by Westpac (and potentially by others) may now delay any increase decisions by the RBA. Time will tell.
  13. Carol from Vista Financial

    Mortgage Income Multiples

    No worries. I was worried that may be the case as certainly takes it's toll. Glad to hear they are taking steps to try help, so long as they are wary of credit repair companies etc. as in the first instance free help is the best first step: http://www.ndh.org.au/ Seeking help for the health implications is just as important, these may help her if she is not aware of them already: https://www.beyondblue.org.au/get-support/get-immediate-support https://www.healthdirect.gov.au/mental-health-helplines Yes it may well have been avoided, which they are no doubt unfortunately realising now in hindsight. If they are not sure of next steps or have any mortgage issues etc. I am happy to chat to them. Not a debt specialist but happy to help where I can.
  14. Carol from Vista Financial

    Mortgage Income Multiples

    Agree @s713, ideally it would be great to start with your budget, see what money you would be able to allocate to a mortgage repayment, and work backwards from there as to what loan size and purchase price that would equate to. More often than not it's a case of: 'let's see what the maximum we can get from the bank and take that''. Or worse, let's go to open inspections without getting a professional opinion and (unfortunately) set ourselves up for disappointment! Yes, getting a maximum lend estimate can help in narrowing things down if what you are approved for is lower than you though or you have absolutely no idea what the ball park may be. But if it is higher, then excitement can take over, closely followed by the 'we will make it work' thoughts/hopes. What is deemed 'affordable' by a bank can be very different to what is affordable coming out of your wallet every month and one size does not fit all. Extra scrutiny in how lenders assess living expenses is one way regulators are trying to account for this. Most people can easily tell me what their ideal purchase price range is, fewer start the conversation with what out-of-pocket-per-month they are comfortable with. And if there is a whiff of a higher loan approval possibility (and ultimately of course a 'nicer' house) suddenly the comfortable repayment level that was once hard and fast becomes flexible. Yes rates are very low still and it will be a shock to the system for many that have only known low rate environments when they eventually go up again. The RBA knows it and have flagged this as something to prepare for. I am sorry to hear about your friends' circumstance. Have they sought any help to try get out of the debt/make it as manageable as possible? Free help is out there: https://www.moneysmart.gov.au/managing-your-money/managing-debts/trouble-with-debt but does take time and effort, and can seem fruitless, especially if they are drained mentally, which they would be if under financial stress.
  15. Carol from Vista Financial

    Current mortgage rates and special offers

    Good morning internet. Quiet on the front here in terms of rates and mortgage offers but the biggest thing that may actually determine who you prefer as a lender may be their credit criteria. Rate isn't everything! Lending criteria can be a critical factor in your decision, and it has tightened significantly across the board over the last couple of years. Just yesterday I came across an reminder of exactly how much has changed. Same applicant, same income, same circumstances, fast forward two years to today and using the exactly same details as their original application two years ago , they would be declined the loan they have today! This is for owner occupied property, so put aside the extra complexities associated with investment properties. This is purely and simply a demonstration of the banks pulling the purse strings tighter. If this means extra protection for those seeking credit, fair enough. But that doesn't make the pill easier to swallow. It's not you, it's me. Sincerely, Banks. The applicant has not done anything wrong here - it is an environmental and regulatory change. They have a healthy deposit and only one small credit card, and yet the same application put through today would simply not meet the banks lending criteria. This is the case for many people, the majority of which won't even realise until they try to apply for a new loan and receive a rude awakening. Nobody likes rejection, but just know this isn't personal. Now this doesn't automatically mean that the first original approval was 'wrong', it simply means times have changed and we must adjust our expectations. (On the flip side of course obviously in some instances perhaps the approvals were 'wrong' and have put people at risk of hardship, hence the tightening of lending criteria in the first place!) What now? So, what is the solution? Seek a lender that caters for your circumstance. But be honest, because the rules are there to protect you, as annoying as they may be. In this particular instance it was a case of choosing a lender that accepts the spouse's income, that would not necessarily be accepted by others. The bank accepts the extra income, affordability increases, and there you have it, a stronger application. No, it may not be the lowest of low rate lenders - because if they accept extra risk in their policies, they may mitigate that risk with a higher rate. But it makes for a stronger likelihood of approval, and you aren't in a position to wait (or ever) tick the boxes of the bees knees lender, this may be your trade off. Rate isn't everything. The bottom line At the end of the day, and most importantly, if it doesn't work, sometimes it just doesn't work. If you can't meet affordability criteria, this is a great big red flag to tell you that maybe today's not the day. Be frustrated and annoyed. Then accept it, dust yourself off and don't lose hope. Re-assess where you are now and where you need to be, and make a plan to get there. Before you know it you will be in better position to apply and frankly this may be the best thing for you anyway. Thanks for reading, until next time Carol