At today’s board meeting the Reserve Bank decided to leave the cash rate unchanged at the historically low rate of 1.75%.

Where and how we live in retirement will be a decision most of us will face eventually. Should we stay in the family home? Or does it make more sense – both financially and practically – to downsize into smaller accommodation? 

Regardless of your age – or your stage in life – decisions about retirement affect all of us at some point. The earlier you start to plan the easier some of those decisions may be…

Make sure you read this month’s article ‘Should we stay or should we go?’
As your finance specialist we can guide you through every financial stage of your life. If you would like to explore your options we’re here to help. Give us a call TODAY.

With your best interest ALWAYS in mind…

There is no end of financial advice on preparing for retirement: superannuation, investments, tax minimization, pension eligibility, funding your desired lifestyle – the list goes on. All this advice highlights the importance of planning ahead – the sooner you start the better prepared you will be.

One of the biggest decisions for many retirees is whether to stay in the family home or purchase smaller or ‘retiree’ accommodation. It may be their most significant decision both financially and emotionally.


Downsizing is on the move

Between 2009 and 2014 one in four Australians aged 55-64 moved to a smaller property. It is expected this trend will increase as more Baby Boomers move into retirement. As a result, there has been increased demand for housing suitable for retirees such as villas, townhouses and units. Growing competition for limited stock in many established areas has increased prices – in some locations the cost of a villa can be as expensive as a three bedroom house. This trend may continue.

But beware – the reverse can happen in an off the plan situation. Some off the plan properties are coming in under purchase price and lenders have restricted lending in certain areas.

Is it better to plan ahead?

In the years prior to retirement many homeowners find themselves with substantial equity in the family home and fewer expenses as kids (hopefully!) leave home. It’s an ideal time to consider using the equity in your home to buy that retirement property now. In the years leading up to your retirement the rental income and possible tax benefits will help pay for your property.

With the potential benefit of positive movement in the housing market – and now having two properties – this may place you in a good position to increase your retirement nest egg if you choose to sell your family home when you downsize. Depending on your situation you may even be able to keep the family home as an investment.

Why downsize?

The decision may be as simple as living in a property that is easier to maintain, closer to family or one that supports your lifestyle choice – many grey nomads LOVE being able to lock up their small pad and hit the road! Selling could also release money for other investments that provide you with additional income in the future. This may give you more choices in retirement and avoid alternative equity raising options such as a reverse mortgage on your current property.

Look before you leap

Before putting your home on the market you should consider the following:

• Understand your reasons for selling. Don’t just consider short term needs – factor in potential long term needs.
• Explore ALL the implications of selling your house – financial and otherwise.
• What are the advantages to YOU? If you’re moving to be near family what will happen if they move elsewhere?
• Smaller isn’t always cheaper. Explore all the costs of moving and maintaining a new home. Will you be ahead?
• Have you sought financial advice? How will funds from the sale of your home affect your assets and income tests? Will selling impact your age pension?
• You may miss people, activities and services in your current area if you relocate to another region. Make plans to re-establish yourself or keep contact with your social circle.
• You will need to cull a lifetime of possessions. ‘Letting go’ can be difficult. Try doing without items or living in a confined area of your house for a bit to see how you adjust to ‘smaller living.

Ultimately, downsizing from your family home should provide you with a whole new way of life that is better than the one you left behind. With careful planning and a clear understanding of your future goals you will be well on the way to making it your best move yet!

If you have friends or family who are thinking of downsizing in the next few years make sure you pass on this article!

At today’s board meeting the Reserve Bank announced a further drop in the cash rate. It now stands at a NEW historical low of just 1.75%.

The challenges of home ownership for first home buyers (FHBs) has been a hot topic in the media for some time now. If you are a potential FHB – or your children are – it wouldn’t be surprising if you are worried that home ownership will NEVER happen.

Did you know, despite the gloomy message, that Gen Y IS starting to actively enter the home market?

So what do YOU have to do to prove the doomsayers wrong? It all starts with having a plan…

Make sure you read this month’s article ‘Are you worried you will NEVER own a home?’ There may be more hope than you think!

Do you have young friends or family who would love to step onto the property ladder? Make sure you forward the article to them too.

Of course, if we can be of assistance to help get you started then give us a call TODAY.

With your best interest ALWAYS in mind…

If you are a potential first home buyer (FHB) you may be feeling disheartened by doom and gloom in the media as to whether younger generations will ever own their own home.

There is no doubt the house price to salary ratio was lower in the 70s and 80s – often seen as an unfair advantage for baby boomers. On the other hand interest rates by the late 80s were at times crippling – who remembers 17%?

Anyone who rode out 17% interest rates probably thought they would NEVER pay off their home. But they DO. And they DID. Historically, property prices usually rise over time. Surprisingly most home owners end up coping with market fluctuations, bringing up children and still doing okay.

As you can see, even with a significantly lower average mortgage in 1990 home owners weren’t much better off while interest rates were high.

So what else has changed?

In 2016 we earn much more but other lifestyle factors have also changed. Finance is more readily available – how many of us now have credit cards? We’ve also moved on from a society that generally lived within their means. We no longer save or lay by – it’s often easier and more instantly gratifying to charge to a credit card!

Household mortgage debt has tripled in the last 25 years. One survey links the trend of increasing debt to the introduction of mortgage packages that allow homeowners to draw down on their mortgage without having to sell their house3. While this facility can be a helpful low interest way of accessing finance it can also increase the level of debt for those who don’t use it with care.

So what is the ‘home ownership’ message from all of this? Well, the road hasn’t ever been easy. In fact…

If it was easy – everyone would do it!

Building wealth and financial security through property investment has ALWAYS required a level of sacrifice and self-discipline. Current home ownership statistics show 31% of Australians rent, 36% have a mortgage and 33% own their home outright. Those who benefitted over time are those who put a strategy in place and had the discipline to stick with it.

Is there hope for first home buyers?

Recent research shows Gen Y is the new generation of FHBs and they are starting to actively enter the market. We are also seeing the rise of the ‘rent investor’ – young renters under 30 purchasing investment properties in affordable areas while renting where they WANT to live.

So yes, it appears there IS hope for FHBs. Do you want to be one of them?

Buying a property takes preparation and planning – sometimes for years. So what can you do NOW to help you buy a home in the future? Here are our top tips:

• Research the market NOW and plan your goal
• Work hard at saving a deposit
• Pay your bills on time
• Eliminate debt

Travel, good times and job-hopping have been the typical lifestyle choices of Gen Y but this generation is evolving. PREPARATION and PLANNING are essential to getting a foot on the property ladder along with reining in extravagant living and our penchant for instant gratification.

With a little sacrifice and self-discipline it may be more possible than you think for our younger generations to afford property. It may be even MORE affordable for Gen Y because there are possibly TWO salary earners to buy the first property – unlike back in the 70s. Let’s prove the doomsayers WRONG and take responsibility for our future!

And lastly speak to a finance specialist!

Contact us for a free consultation. It’s our job to assess your situation and ensure you are ‘mortgage ready’ BEFORE YOU START a loan application process. That’s VERY important!

Let’s team up and make it happen!

At today’s board meeting the Reserve Bank decided to leave the cash rate unchanged at 2.00% – the same level since May 2015.

Most of us are familiar with the term ‘Sandwich Generation’. It’s a growing 21st century trend that is not going away as the ‘perfect storm’ of factors driving it will continue.

Being sandwiched between caring for ageing parents, kids – and sometimes grandkids as well – can affect both your lifestyle AND your finances.

What is driving this trend? And what can you do about it?

This month’s article ‘When the meat in the sandwich is you’ will shine some light on the problem.

If you have friends or family in this predicament make sure you forward the article to them too.

Are you a member of one of the fastest growing demographic groups: the Sandwich Generation?
Well you’re not alone. And the sandwich is growing! One notable authority on the subject has categorized three demographic groups affected by this issue:

Traditional Sandwich (usually 30s-40s)
Caring for/helping ageing parents and raising their own children

Club Sandwich (usually 50s-60s)Those sandwiched between the needs of elderly parents, adult children and caring for/helping with grandchildren

Open Faced Sandwich
Anyone else involved in elderly care

So it’s an issue that can potentially affect anyone from 30 years+. The ramifications can be far-reaching as caring for others may not only affect your lifestyle but also your finances.
For some people, it can affect their working life – and therefore income – at crucial pre-retirement years of life. A Canadian study found one in seven affected workers had to reduce working hours or even give up work altogether. In the US the total cost to employers (in absenteeism, interruptions and lost productivity) for all full time, employed caregivers is an astounding $33.6 billion pa. Such figures indicate this is NOT an isolated problem.

It is also important to note this isn’t a temporary trend as the factors fueling it ARE NOT going away. They include:

• an ageing population
• increasing life expectancy
• growth of ‘two income’ families that require childcare options (now 67% of families with children under 184)
• high cost of care for the elderly
• adult children living at home longer – some into their 30s
• couples having children later

Generation Y has significantly delayed marriage – the median age of first marriage is now 29.9 for a male and 28.3 for a female. Childbirth for Gen Y has also been delayed with the median age of parents now 33 (male) and 30.8 (female)

How do you protect yourself from the side effects of this trend?

Planning ahead and having agreed contingency plans is an important first step. Talking together as a family is essential so every family member is aware of the needs and expectations of others – both now and in the future. Here are some key points for consideration by each generation:

1) Are you thinking about having children in the future?

Plan ahead now for a period of reduced household income:

• Pay off your credit cards
• Create a household budget
• Practice living on one income
• Investigate your leave and/or government assistance entitlements

If you have a home loan explore your options for alleviating any future mortgage pressure – talk to us BEFORE the birth. Investigate childcare options and costs – register your name at centres nearby to home or work. Make sure you discuss potential childcare assistance with grandparents NOW so everyone can start planning for the future.

2) Are you a Baby Boomer with adult children still living at home?
Gen Y kids living at home into their 20s (and beyond) can be a great way for THEM to get ahead financially. However, the knock on effect for mum and dad may be that retirement is delayed or retirement savings are depleted. How do you make it work for everyone? See the box below and call us for our article.

3) Will you have to support your elderly parent(s) if their money runs out?

• Become familiar with finances and care preferences of your parents. If you know the situation you can plan ahead.
• Ensure necessary legal documents are in place, such as a health care directive and power of attorney.
• Research entitlements, benefits and programs available through government agencies or non profit organisations. It helps if you know where to go for assistance BEFORE you need it.

This trend may become the ‘new normal’ for many families.

What does this mean for future generations?

PLANNING IS THE KEY. But even with careful planning there may be life events that affect your financial situation. As your finance specialist we’re here to help you explore your options for managing unforeseen events. Call us TODAY for a confidential chat.

At today’s board meeting the Reserve Bank decided to leave the cash rate unchanged at 2.00% – the same level since May 2015.

Statistics show around one third of Australian marriages end in divorce. A lot of couples also now live together before marriage – and perhaps never make it down the aisle. So it’s fair to say relationship breakdowns are likely to touch many of us at some stage.

There is no doubt the emotional toll this can inflict is very real but the financial impact can be even greater – and long lasting.

When you’re hurting it can be difficult to pick yourself up and think about your finances. The key is to take action early and there are several crucial steps to getting your financial future back on track.

Make sure you read this month’s article ‘Starting over…’

Of course if you need assistance with assessing your home loan options or restructuring debt we’re here to help. Don’t go it alone! Give us a call TODAY.

With your best interest ALWAYS in mind…

In Australia today around 1 in 3 marriages can be expected to end in divorce. With 77% of Australian couples also living together before getting married (and let’s face it – some don’t go the distance) the real impact of relationship breakdowns is likely to be much higher than the statistics lead us to believe.

There is no doubt moving on from any long term relationship, be it marriage or de facto, can attract a heavy emotional toll. But the financial impact can also be far reaching and long lasting.

Finances are often left on the backburner as you focus on the emotional health of yourself and your family. Perhaps it is the first time you have had sole responsibility for your finances? Or maybe you feel overwhelmed and don’t know where to start?

The key is to take action early. Here are some steps to get back on track financially after a separation or divorce…

1. Check your credit rating

• Start an emergency fund – open a separate savings account for unexpected emergencies.
• Update your Will – ensure it reflects the changes that have occurred in your life.
• Manage your debt – contact us for a chat about how to reduce your ‘bad’ debt like credit cards and personal loans as quickly as possible.
• Plan for your retirement – review superannuation and update beneficiary details if required.
• Review your insurance needs – you will need to update policies from married to single status.




1. seek.com.au
2. mccrindle.com.au

At today’s board meeting the Reserve Bank decided to leave the cash rate unchanged at 2.00% – the same level since May 2015.

Did your new year’s resolutions include a new job? Or maybe you’re thinking about a career change this year? With a traditional peak in job seeking activity at this time of year it’s fair to assume a new job could be on many people’s lists!

Generation Y is well known for seeking new jobs and increased career prospects on a more regular basis. They are also starting to actively enter the property market. Now you may think a better position/better pay is a great attribute for securing a loan? Well, not necessarily…

In this month’s article ‘Will the bank love your new job as much as you do?‘ we take a look at the aspects of your employment history lenders may consider when assessing your loan application.

A little knowledge NOW could go a long way to assisting you when the time comes to apply for a home loan. Make sure you read the article below!

So where is the BEST place to start? Call us BEFORE you make any career changes!

With your best interest ALWAYS in mind…

January and February are traditionally the months we see a peak in job seeking activity1. Perhaps a consequence of all those new year’s resolutions for self improvement?

Research shows Gen Y is now actively exploring and entering the property market. They are also well known as the job hopping generation with an average of just 20 to 32 months in a job2. In fact, the national average job tenure across all age groups is now 3.3 years. Today’s job market is a far cry from the days of a ‘job for life’.

So what impact does a new job have on your ability to be approved for a home loan?
For younger generations, a stable job with a secure income can sometimes be the catalyst to buying your first home or investment property. But although you may be delighted with your exciting new job, your lender may not be quite so happy.

When assessing a home loan application lenders will usually consider:

• how often you change jobs
• whether you are staying within the same industry, or
• if you are taking your career in a new direction

These factors influence the lender’s assessment of whether you are a good credit risk. They tend to prefer applicants who have a stable employment history with 1 to 2 years of steady or increasing income to determine the loan amount you are capable of repaying.

Switching jobs shortly before or after applying for a mortgage may make it harder to qualify.

Most lenders prefer you to be in your current position for 6 to 12 months to borrow 80% of the property value. There ARE a few lenders who allow you to borrow up to 95% of the value of the property (for an owner occupier loan) – sometimes even if you have just started a new job.

Are there lenders who can help?
Many lenders now understand younger generations are in high demand, are highly skilled and are career opportunists who actively change jobs to seek a higher salary or better working conditions. Not all lenders require you to be in your job for more than a year and some are tailoring products and qualifying criteria to meet these new norms.

What if I’ve only been in my job for 1 month?
Some banks recognise that despite a short employment history, many individuals are in a strong financial position and have industry experience. Your length of time in a job will be less of an issue if you have other sources of income, eg investments, royalties, second jobs etc. The lender may need proof this income has been steady for a couple of years and that you expect it to continue.

What if I am changing my career?
If you are considering a career change or have recently changed jobs, it does not necessarily mean you need to put your borrowing plans on hold. Increase your lending options by talking to us when you first start thinking about any life changes and definitely before making any decisions.

Do you move house often?
The stability of your home address is also considered, along with many other factors in lenders’ sophisticated credit scoring analyses to assess whether you are a good long term risk. If you are currently renting and planning to seek finance soon, speak to us before your next move to allow us to prepare your application in the most positive light.

We can generally find a lender who will help, however if you are changing to a completely new industry or role then this will certainly reduce your chances of securing an approval. That’s WHY you need us to help!

What do the banks think?
Most lenders won’t approve a loan during the process of switching to a new employer but there are some that may consider approving your home loan before you have commenced your new role. If you can show stability with your prior employers they may take the view you are moving to a new employer to take advantage of a better salary or working conditions.

What should I do now?
TALK TO US! Our role as your finance specialist is to keep up to date with the constantly changing borrowing criteria of most lending institutions so we can suggest a solution for your individual situation.

1. seek.com.au
2. mccrindle.com.au

There is no cash rate decision this month as the Reserve Bank of Australia (RBA) does not meet in January.

In the absence of a cash rate decision by the RBA life continues on as is. However economists, the media and homeowners continue to debate where the cash rate will head in the future.

In this month’s article ‘Bottom of the curve? Where will interest rates go from here?’ we take a look at historical trends for the cash rate and the resulting effect on interest rates.

Will history repeat? Who really knows? BUT it does pay to be prepared.

Make sure you read the full article below!

Has it been more than 18 months since you had a finance review?
Our office is currently confirming appointments for 2016!
Please CLICK HERE to contact us and lock in an appointment.

We look forward to helping you kick some financial goals this year.

‘Bottom of the curve’ is a term often used to describe the point where interest rates may have hit their lowest point over a period of time. The Reserve Bank of Australia (RBA) began dropping the cash rate in November 2011 eventually reaching an all-time historical low of 2.00% in May 2015 – where it has remained.

There has been much debate in the media and amongst economists about whether the RBA will drop the cash rate even lower. Australia has enjoyed low and relatively stable interest rates for so long now it is tempting to think they will continue forever.

How has the market changed?

The cash rate and the big banks
The RBA is responsible for formulating and implementing monetary policy to achieve the objectives of meeting inflation targets, stabilty of the Australian currency, full employment and the economic prosperity of the people of Australia. Historically, interest rates set by the banks have tended to move in line with the RBA cash rate however in recent years a number of lending institutions have moved interest rates independently of the RBA cash rate decision.

There is no longer any guarantee banks will lower interest rates in line with the RBA cash rate decision…

In fact we have recently seen various lenders raising interest rates despite the cash rate remaining low.

Investment property loans
There were also some key changes to investment property loans in 2015 including:

• generally stricter criteria to approve investor loans
• cuts to interest rate discounts for investment loans
• deposits increased – up to as high as 20% (previously as low as 5% for investment loans)
• reduction in the amount of rental income considered when assessing an applicant’s income

Probably the biggest impact is that property investors will now require larger deposits as banks restrict LVR (loan to value ratio). It is important to remember interest rates are at their lowest level in history. Depending on your personal circumstances it may still be a good time to invest in property despite the tightened lending criteria and larger deposit required. Remember there are still some lenders that often have softer lending criteria – we can help you with this.

So where will it go from here?

Nobody really knows but be aware that rates are cyclical – at some point they will eventually start to rise again. The concern is that last time the cash rate began to rise a significant increase occurred over a relatively short space of time. We all know that generally when the cash rate increases, so do interest rates. During the last rise many institutions consistently increased interest rates above the cash rate.

What does this mean for home owners?

The best advice? Don’t wait until rates start to increase to review your finances. Your financial situation is ever changing – as are both the finance and housing markets. It’s prudent to periodically review your mortgage and finances.

As your finance specialist it is our job to stay well informed on the changing landscape of lending so we can continue to offer you up to date information. We do the research for you then help you assess your options.

Ensuring you still have the most appropriate product shouldn’t be determined based purely on the rates on offer – it is important to have an expert explain the loan features of each product.

No one wants to go into arrears, or even worse, default on a mortgage. Everyone – especially first home buyers who have never experienced mortgage stress – should speak to a mortgage broker or financial adviser about the appropriate strategies for their situation. It pays to put contingency plans in place before the inevitable rises occur.