Five Ways To Cope With Higher Interest Rates

As anticipated, the Reserve Bank has again raised the cash rate from the record-low level to which it was reduced as an emergency response to the pandemic.

Despite the subsequent increase in home loan rates, they remain low by historical standards – and will probably still be low even when we get to the end of this ‘tightening cycle’.

That said, it would be prudent to take steps now to make sure you can cope with higher interest rates. Here are five ideas:

1. Review your last 12 months of bank statements and credit card statements, so you can calculate your average monthly income and expenses.

2. Look for ways to increase your income, such as asking for a raise, switching jobs, doing more overtime, starting a side hustle or renting out a spare bedroom (we have clients who do this - and it works!).

3. Look for ways to reduce your expenses – e.g. bringing your lunch to work, going out less, cancelling subscriptions you rarely use, buying fewer gadgets, holidaying in Australia rather than overseas.

4. Pretend your home loan rate is 1.50 percentage points higher, and pay the difference into your offset/redraw account or a separate savings account.

5. Refinance to a lower-rate loan so future rate rises start from a lower base.

Regarding refinancing, in 2020, the ACCC’s review of home loans found (drum roll please) …. existing customers were paying FAR MORE than new borrowers!? Amazing revelation ???????

So, how much more might you be paying? This table sourced from the ACCC might help.

Do the maths for you and your loan: ?your loan repayment calculator

?Would you like more information? You can ring me now 1300 989 878 or email me at [email protected]

Now, it's time to massage your brain (gently!) ?? ??

Why you need a good property lawyer when you are buying

? No two contracts are the same.? Understanding all the less clear aspects of your contract is why you hire a good property lawyer.

? Prepare or review & provide advise you on your Contract of Sale and the Vendor’s Statement (Section 32) - plus any advice which extends beyond what a conveyancer can legally advise you on.

? Assist with your negotiations.? A good property lawyer will provide information you can use to your advantage in your negotiations - and can sometimes be a great lever you can pull (you become the good guy and your legal advisor is the bad guy!).

? Liaise with all the parties so the deal goes through smoothly (clients, other parties, finance brokers and financiers).

? Attend to settlement and make sure it runs smoothly.?

? Notify authorities once settlement has occurred so all is done and dusted upon settlement.

Do you need to know ‘all there is to know’ about a property?

Order your free property report here: your free property report link

And, if you don’t know a good broker, or even a good property inspector, conveyancer, property lawyer or buyer’s advocate, I might be able to help you (particularly the good broker ??????).? We have access to a range of service providers Australia-wide including property professionals and tradies.

Would you like more information? You can ring me now 1300 989 878 or email me at [email protected]

Client’s Stories? ????

Tax Debts? No problems!

2 deals were approved by this lender.? They were happy to lend for commercial and residential investment properties when the borrower had a tax debt.

? 12 months trading conditions had been tough but the last 6 months showed improvements.

? Properties in Category 4 area (not much stock, remote from capital city).

? The borrower was able to borrow up to 70% LVR and pay off the tax debt (less than $100K).?

? The borrower received a 100% offset account with free redraws

? 25 year loan term with Interest Only period (5 years)

? Loan amounts: $700K and $1.3M

Would you like more information? You can ring me now 1300 989 878 or email me at [email protected]

And one last thing….

"You will never gain anyone's approval by begging for it. When you stand confident in your own worth, respect follows." ―Mandy Hale