High net worth borrowers generally earn more than they spend, which is obviously a great thing – but it can also be a double-edged sword.
Why? Because it can impact your ability to get finance.
Find yourself complaining that you never have enough time?
Does your ‘To Do’ list grows every day, but you barely seem to tick things off?
Are you running between work, gym, family and other commitments like a hamster in a wheel?
If any of this sounds familiar, you could benefit from having a broker help you get your finances and loans organised.
Why Do High-Income Earners Need Help to Get a Home Loan?
Borrowers with high incomes can find themselves spending more than they need to because they can afford it.
They don’t need to check how much they’re paying for their internet service or shop for the cheapest groceries because their budget can afford it.
An extra $20 here and $50 there isn’t worth worrying about for you, the way it might be for someone living week-to-week on lower wages.
Where this can cause problems is when you want to apply for finance.
In fact, high-income earners can have a lot more trouble than they thought they would when they try to secure finance.
This is because with a high income comes high disposable expenditure – something banks don’t like at all.
So, What Can You Do About It?
The first step is to work out what you’re spending right now, and if that amount could be considered “too much” in the eyes of the bank.
But What’s “Too Much”?
Here’s the thing: lenders generally assess your spending using Household Expenditure Measure (HEM). This formula gives the lender an amount as a guide that the average person spends…
In your location (the HEM varies depending on the city you live in)
With your family size (it changes based on how many kids you have)
Your income (lenders assume a higher income means higher spending)
By figuring out how much it should cost you to live, the lender can look at your salary and determine how much you’ll have leftover to service the loan.
Lenders assess your spending against the HEM, and if your spending is way higher than the HEM guidelines, it can show up red flags.
Let’s say, for instance, you’re a couple with one child living in Sydney, and you earn $250,000 combined.
The HEM threshold might suggest spending of around $5,000 per month. But your actual spend is $9,000 per month.
The lender might view your spending habits as reckless, as they exceed the HEM by a large margin… and that’s not someone they want to loan hundreds of thousands of dollars to.
This is where an experienced mortgage broker can help.
We can help you adjust your spending habits, to become a little more lender-friendly.
Don’t worry, you won’t be living on baked beans and toast. But you may need to reign in some of those recurring, non-essential expenses for a few months, so we can help you produce bank statements that reassure your lender you’re a good ‘credit risk’.
We help you restructure your debt.
You might also have large credit card limits thanks to your income, which we may need to reduce. Many people don’t realise, but even if you only owe $100 on a $20,000 card, the lender will assess this card as though it’s fully maxed out – bringing down your borrowing capacity. You can always bump the limit back up again down the track if you need access to more credit.
We help you find the best lender for your specific situation.
Every lender has a different loan policy, criteria and appetite for risk. As experienced mortgage brokers, we can assess your situation and help match you with a lender who will be most likely to approve your loan, as their policies suit your situation.
For every problem, there is a solution, and with our depth of knowledge and experience, we can help you move through these obstacles and become “finance ready”.
The bonus is, you’ll probably save quite a bit of money in the process, and our service is 100% free for you, as we’re paid by the lender. Speak to one of our friendly team members and get the ball rolling on your loan application today!
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer:This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
With house prices going gangbusters in the first half of 2021, is it still a good time to buy a property? According to the latest annual survey – most investors think so!
The 2021 PIPA Property Investor Sentiment Survey, which gathered insights from 800 property investors across the country in August, found more than 76% of investors believed property prices in their state or territory would increase over the next 12 months. That is up strongly from 41% this time last year when Covid-19 had some investors a touch nervous.
Here are the top five trends that the PIPA survey identified.
Most Investors Believe It’s a Good Time to Invest
The survey found that nearly 62% of investors believe that now is a good time to invest in residential property, which is down from 67% in 2020. PIPA says that the dip in confidence may be due to the high property price growth this year as well as significant lockdowns taking place at the time of the survey.
The Sunshine State Looks to be the Property Hotspot
The survey produced the biggest ever margin when it came to the location investors believe offers the best potential over the next year.
58% believe that Queensland offers the best property investment prospects over the next year – up from 36% last year.
New South Wales came a distant second at 16% (down from 21%), and Victoria was third at 10% (significantly down from 27%).
Brisbane also beat its capacity city counterparts, with 54% of investors believing it has the rosiest outlook. This boost could be to do with Brisbane being named as the host for the 2032 Olympic Games, and significant upcoming infrastructure spending. All of these factors, as well as the affordability of property in southeast Queensland and strong interstate migration, are some of the reasons why investors are so optimistic about the market conditions there.
Regional and Coastal Markets Continue to Grow in Demand
Whilst investors believe metropolitan markets offer the best investment prospects at nearly 50%, regional and coastal markets are closing the gap. A quarter of property investors favour regional markets whilst 21% of survey respondents have their eye on coastal areas.
Fewer Investors Looking to Sell
The lingering impacts of the global health emergency, as well as robust price growth over the past year, means fewer investors are looking to sell a property this year compared to last year.
Part of the reason for the uplift in property prices over the past year has been the continued low levels of supply in most locations around the nation. With a decrease in the number of investors indicating they intend to sell over the short term, it seems unlikely that this boom market cycle is going to change soon.
Almost Three-quarters of Property Investors Use a Mortgage Broker
Just 17% of respondents secured their last investment loan directly via a bank, whilst 4% used a non-bank lender.
The vast majority (72%) of respondents secured their loan through a mortgage broker, which is a slight increase from last year’s figure of 71%. And 72% of respondents said they’d use a mortgage broker to finance their next investment loan.
It does not matter how far you are on your property journey, whether you are a first home buyer, refinancer or savvy property investor, we can help you every step of the way! If you are looking to add to your property portfolio, looking for a change of scene, or are keen to crack the market, contact us today!
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
Usually, the first time that people learn about mortgage brokers is when they are trying to enter the property market. But… we are more useful than just helping you get a home loan.
Here are a few ways a mortgage broker can save you money, time and stress.
Mortgage Brokers can get You a Better Deal than a Bank
Getting a mortgage with your bank is not always going to be the best way. Your bank has a handful of home loan options, but a mortgage broker has access to hundreds or even thousands of home loan options as they have access to lots of lenders. They could get you a cashback offer, a cheaper interest rate or a package deal that saves you money on other things such as credit card fees.
Mortgage Brokers Provide Independent Advice
Banks are in the business of selling products – which is the way they make money – a mortgage broker wants to earn money but recognises that the best way to operate is to build long-term relationships with their clients. This means helping clients to pay off their debt faster, providing independent advice around loan structures and suggesting products that are in the best interests of the client.
This is not just good business practice, but it has now become law. Mortgage brokers MUST act in the customer’s best interests and legally cannot suggest a loan unless it is a good match. Banks, on the other hand, are not held to the same legislation, which is why it really pays to work with a mortgage broker.
Mortgage Brokers Save Time
Researching the mortgage market takes a lot of time and effort, whilst a mortgage broker can save you this hassle. They focus on getting the best deal at the beginning of the property journey and will work with their client’s overtime to make sure that they are all still getting the best deal. Mortgage brokers do regular check-ups every year on the borrowing status of all their clients to ensure that they are not paying too much interest. This is a service that mortgage brokers provide at no cost, and could save thousands of dollars every year!
Mortgage Brokers Help You Grow Wealth
Good mortgage brokers recognise that building a long-term relationship is not just about getting a good deal on a mortgage right now but setting up the best possible structures with a clear road map to achieve all future goals. This may be upgrading to a bigger home, investing in a holiday home, building an investment property portfolio or renovating to build equity. Whatever the goals are, a mortgage broker can help to work out what the borrowing capacity is now and what it could be in the future.
Here are just a few things mortgage brokers do to help their customers and remember – they don’t charge anything for their services! Mortgage brokers are paid by the banks in the form of commission, which is the compensation for managing the loan process and introducing new clients to the bank.
Mortgage brokers will also work to show how to take advantage of interest rate specials with different lenders when they become available, advise on how to prepare the application for the best chance for approval and be a source of independent advice, to help work out the next steps.
If you are interested in learning more about how Zippy Financial can help you get approval for a home loan and realise your property dreams, contact us today.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
Do you remember that TV advert: nine out of 10 dentists recommend using Colgate? It turns out that mortgage brokers have earned a similar level of trust when it comes to helping first home buyers get into the property market. This is because nine out of 10 first home buyers (FBHs) recently said they trust a mortgage broker to help them buy their first home.
Why Do so Many First Home Buyers Trust Mortgage Brokers?
The Genworth First Home Buyer Report 2021 surveyed 2,077 prospective FHBs and 1,0008 recent FHBs, and they were very happy with the results.
Here is what one respondent said: “Go and see a professional mortgage broker in-person, early on in the process. That way they know your situation and are able to best guide you through and help you out,” the 32-year-old recent FHB from WA said. And he wasn’t alone.
Almost nine in 10 FHBs believe that mortgage brokers help cut through the complexity of the home buying process. The report also found a similar proportion of FHBs believe mortgage brokers provide reliable and trusted advice, information, and support.
In a nutshell:
Trusted = tick
Jargon busters = tick
Reliable advice and information = tick
Valuable support = tick
How can We Help You Buy Your First Home?
The property market has picked up over the past 12 months which has left a lot of prospective first home buyers frustrated that the suburbs they were once focusing on, now moving out of their price range.
But there are a number of Federal Government schemes available to FHBs, including the First Home Loan Deposit Scheme – which can allow you to buy your first home with a deposit of just 5% without paying for Lenders Mortgage Insurance. There is also a range of State and Territory Government schemes designed to help FHBs get into the property market, including first home buyer grants and stamp duty concessions.
We’d love to discuss your situation and help you make the leap from renter to a first home buyer. Get in touch so we can support and guide you through the entire home loan application process to settlement and beyond.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
When it comes to the business of buying and selling property, it is all about relationships. For a real estate agent, building a strong, mutually beneficial connection with the right mortgage broker is vital, because it gives agents a powerful ally who can help their own property buying clients get that all-important finance approval.
The borrowing capacity of Australians has soared over the last 12 months, with the Covid-19 pandemic driving interest rates down. As a result, banks are finding themselves inundated with loan applications, but the speed at which they can process these applications has slowed.
It’s creating a bottleneck that can make the wait for finance approval excruciatingly slow. When you are buying a property, and you’ve made an offer that has been accepted, time tends to slow down. Every day that you wait to hear back about your finance approval can stretch out like an eternity…
And the stress of this ‘waiting game’ spills over to the real estate agent too.
This is where a Mortgage Broker can Smooth Things Over.
Can a mortgage broker get access to faster loan processing and quicker turnaround times?
Unfortunately no. If a particular bank or lender is struggling with processing times, it means there are delays to all customers, whether you’re going through a broker or borrowing direct.
But as a professional that works with the banks day in and day out, a good mortgage broker can simplify and streamline the financing process for anxious homebuyers.
In fact, a real estate agent with strong broker relationships can benefit in several ways:
Division of Labour. In an effective agent/broker team, each party is able to focus on their own areas of expertise – for an agent, that is spearheading the sale process itself, while the broker concentrates on handling the logistics related to the financing process.
Access to Broader Lending Options. Given their networks, brokers are able to recommend the best lender to a potential buyer based on their specific circumstances, which bolsters the chances of gaining finance approval, even with those trickier situations or not quite traditional borrowers.
Mutual Networking. Great brokers can help an agent to market their property to a broader audience, by social media shares and through referrals.
Industry Knowledge. A broker can give an agent the lowdown on the latest mortgage trends, enabling them to set realistic expectations when it comes to understanding the timing of pre-approvals, settlements and loan processing.
Given these advantages, it is clear how beneficial it is for agents and mortgage brokers to work together. A great first step is coming into the partnership with the mindset that it’s a team effort – as the agent enjoys the benefits provided by the broker, the broker enjoys the referrals and the relationship grows for both parties from there.
Going forwards, both sides should aim to keep each other in the loop as they work together with a client – trust between agent and broker is crucial, and both parties need to be accountable to each other. The updates need to keep coming on both sides, even when the news isn’t necessarily good.
According to Stephanie Baker from Raine and Horne Mona Vale, “We find our clients who have a good mortgage broker have a better understanding of buying property. They know what they can afford, which helps with the property search process, but they also have more knowledge regarding the impact of any future interest rate rises on their repayment and borrowing capacity. With interest rates at an all-time low, it’s important for borrowers to ensure they will be able to afford future mortgage repayments if rates go up and how a rate increase could impact their future lifestyle.”
And where no news is forthcoming? That’s still an important time to stay in touch. Finance processing and approval can be very slow, but rest assured that brokers are often working hard behind the scenes to drive progress forward. Our team always aims to keep our clients (and their real estate agents) up to date, even if that update is simply to say: “We called your bank again, and still no answer.”
What happens when Things don’t go to Plan?
When things turn pear-shaped – and in the property world, this can happen frequently – it’s even more important to be on the same team.
When things don’t seem to be going the way both the agent and broker want, the ultimate goal is to collaborate on a solution. If finance declined, what is the backup? If unexpected delays crop up, how will this be commuicated to the seller? By choosing to act together when it comes to problems quickly, the broker and agent can show that they care about the client and about closing the deal as efficiently as possible.
The relationship between a real estate agent and a mortgage broker shouldn’t be a one-and-done deal. Cultivating a long-term working partnership can benefit both parties over time, and those benefits multiply the longer the relationship stands and the more that trust develops.
If you’re interested in learning more about Zippy Financial and how we can help you gain finance approval and realise your property dreams, contact us today.
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an Award-Winning mortgage broker and Director at Zippy Financial. With over 30 years of experience in banking, mortgage broking and property. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals.
Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate. Connect with Louisa on LinkedIn.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
Comparison Rate calculated on a secured loan amount of $150,000 for a term of 25 years. WARNING: This Comparison Rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different Comparison Rate. Fees and Charges Apply. Terms and Conditions are available on request.
