Category: Consumer

Residential home loans and motor vehicle finance

First meeting with a broker

Posted on by venrockfinance

If you’re looking for a home loan but have not dealt with a mortgage broker before, attending your first appointment with a broker can be a nervous experience. Getting a home loan, after all, can be quite complex for a first-timer and there is a lot to learn. But there are many steps you can take to be confident that your appointment will be a success.

A good starting point is to familiarise yourself with the expectations of the first appointment between one of our friendly brokers and yourself. Your broker is very likely to ask you about your medium and long-term financial goals, the amount you want to borrow, comparisons of your home loan options and your understanding of the fees, costs and conditions attached to home loans. Knowing the direction the appointment will likely take – lets you participate more actively in the conversation. This means you can better articulate your needs to your broker.

It’s also recommended that you give some consideration before the meeting to the types of questions you wish to ask your broker. Questions that can be of use include such things as loan types (such as term, repayment options and interest rate types), the types of ongoing fees attached to various loans (such as early exit, late payment, break and redraw fees) and the typical timeframe for a loan settlement.

These questions might pop into your head spontaneously during the meeting but preparing them in advance is a good way to refine them. By doing so, you are in a position to get more specific information from your broker.

It is common practice, too, for your broker to conduct a needs assessment prior to your face-to-face appointment – so you may be asked some pre-appointment questions. To assist in answering these, you’ll need to supply information about your employment history, assets and expenses.

At the appointment it will save you time and effort to prepare and then bring the required documentation with you. This can include ID, transaction histories, tax returns, rental income statements and borrowing documents such as “contract of sale” and proof that you have the deposit for a property. It’s mandatory for brokers to maintain the confidentiality of information that you provide to them and only pass on information necessary to enable them to lodge your loan application or where required by law.

All Venrock Finance brokers are accredited, therefore you can attend the meeting knowing your broker is appropriately educated, adheres to a strict and professional code of practice and is authorised to access a large range of products offered by a variety of lenders.

To book an obligation free appointment today please contact Venrock Finance on 08 9557 0500 or admin@venrockfinance.com.au.

Buy Now Pay Later – the hidden danger potentially stopping you from owning your own home

Posted on by venrockfinance

The Buy Now Pay Later sector is winning-over consumers with the promise of instant gratification, but the mortgage industry is warning that with every sugar-high comes the risk of a corresponding low.

‘Buy Now Pay Later’ providers such as AfterPay and Zip Pay have experienced massive growth in popularity, with the number of users jumping from 400,000 to approximately 2 million between 2015 and 2018.

Driven by a simple proposition whereby the Buy Now Pay Later provider pays the merchant on behalf of the customer, allowing the customer to obtain the goods or receive a service immediately while subsequently paying off the debt generally through instalments, Buy Now Pay Later presents a tempting offering.

But as the sector’s breakneck growth continues, Venrock is warning users, to be mindful of overdoing it as this could risk effecting their chances of securing a home loan further down the track.

This service is the layby of our day but in reverse. It’s your forward credit for an item. In theory, it makes sense. You get the item or service and pay it off over instalments, so you’re actually putting forward your liability. This might be ok for someone that manages their money well, if they pay off the item on time and use their mortgage offset account correctly. This way they’re delaying expenses and offsetting more of their savings against their home loan.

Utilising this payment method may potentially send the wrong message to a bank. If a lender sees a ‘buy now pay later’ provider frequently on a client’s bank statements, that can trigger more questions about their spending behaviours and ultimately may mean they choose to decline the application.

If you are concerned about your level of expenditure or your ability to secure a home loan, a conversation with one of our friendly brokers could set you on the right path.

It’s important to appropriately manage your expenses well in advance of applying for a home loan, that way you can show the bank that you can save and afford to service a mortgage when the time comes.

Going Green

Posted on by venrockfinance

Venrock Finance is always looking for ways to improve our involvement within the community. Therefore, we are proud to announce our latest initiative where for every loan settled we will be donating trees through a partnership with the Carbon Neutral Charitable Fund. This is a local non-for profit organisation which works with the community to reduce and offset carbon emissions through various projects.

In addition to the above initiative, in 2016, Venrock took a major step forward in reducing the amount of paper we use in the office by changing from paper files to digital document management via our CRM system. Due to the current requirements of lenders, Venrock cannot be completely paperless; however, we are committed to continuing to evolve our internal systems.

If you are considering purchasing a new car or energy efficient equipment, please touch base with Venrock first as we have access to various loans for energy efficient products and services. Not only can we offer discounted loan rates for environmentally friendly vehicles, trucks, electric heavy machinery, agricultural equipment – we can also organise commercial finance for solar panels.

Please remember that Venrock is here to provide obligation free mortgage health checks, organise the finance for your new car, caravan or boat so you can get out and enjoy what our beautiful country has to offer.

Let’s work together to help build a better and sustainable future for the generations to come.

Financial Focus: Understanding Living Expenses

Posted on by venrockfinance

Applying for a new mortgage or looking to purchase a new car is an exciting time, however with the need for comprehensive credit reporting and tightening lending practices, it is imperative that consumers understand how their spending habits can impact on their capacity to access finance.

With more and more expenses being paid electronically, the banks have greater transparency on what exactly people are spending their money on and how much they are spending. Banks use this information to determine what surplus you have left to pay for the proposed finance. Additionally, the expenses that may be a luxury or a one off can also paint a picture on the desirability of you gaining an approval.

With all of this you need to be very mindful on what you are spending and ensure repayments are met on time. So when seeking a mortgage or car finance, work with a Venrock Finance broker who will gain an understanding of your discretionary spending and living expenses. As each bank has different policies our role is to navigate through the policies and find the bank that will say yes to your particular scenario, as while one bank may say no, the other lender may have a policy that includes a realistic understanding of your living expenses.

To discuss your requirements further please contact one of our friendly brokers today.

Financial Focus: Offset versus Redraw

Posted on by venrockfinance

As Finance Brokers a common question that we are regularly asked is “What is the difference between an offset and redraw facilities?” While both are common home loan features, they can cause some confusion to the client when considering the best type of features for their prospective home loan. And with more and more lenders offering either an offset account or a redraw facility consumers need to gain a better understanding of these features.

An offset account is a transaction account which is linked to your home loan and which has normal transaction account functionality. The benefit is that the money in your account is offset daily against your home loan balance, and this will reduce the mortgage interest charged accordingly.  While a redraw facility is a feature which enables borrowers to contribute extra payments onto their mortgage and then allows them to access to their banked additional funds. So while you are saving you are also reducing the interest you pay on your home loan.

In many ways, redraw and offset facilities are quite similar. The main difference is that the money sitting in an offset account remains at call and easily accessible, whereas the money in a redraw facility, while accessible, isn’t available for same day, at call withdrawal.

While diligent savers will benefit from either kind of loan feature, it’s important to note that redraw facilities and mortgage offset accounts are better suited for different kinds of mortgage holders. You have to decide for yourself if you want to do one of two things:

  1. Reduce the interest on your loan while maintaining day-to-day access of your cash. A mortgage offset account offsets the interest owing on your account, but enables you to have day-to-day access to the cash. A mortgage offset account can be used in a transactional way, so is ideally suited for home owners who want to minimise the interest owing on their repayments, without necessarily paying extra off their principal. Many lenders are now offering multiple offset accounts which enables you to separate your savings such as to long term bills, holidays, education or however you like to separate your money for budgeting purposes.
  2.  Pay off the loan itself (known as the principal). By paying the money directly into the loan, a redraw facility allows you to make payments towards paying off the principal, rather than simply reducing interest in the short-term interest. This is better suited for those who have a focus on paying off their mortgage earlier. Though the amount you can redraw will be assessed each year to ensure that you still pay off your home loan within the loan term.

In summary offset accounts are like everyday transaction accounts, giving you easy access to your money, while redraw facilities let you access extra repayments that you have made on your home loan. Both facilities can help reduce the amount of interest you pay on your home loan, however it is important to consider how you wish to manage your finances.

Financial Focus : Home Loans & Self Employment

Posted on by venrockfinance

There are many perks to working for yourself, but when it comes to applying for a home loan, it seems being your own boss sends up a red flag to banks and other lenders. Why? A salaried employee has a regular, steady income and is less likely to experience the cash flow volatility of a small business owner, contract, entrepreneur, trades person or freelancer.

 Yet by being proactive and accessing specialist advice,  self-employed applicants can also enjoy a successful and hassle-free road to securing a home loan. These are some essential steps.

SEEK EXPERT ADVICE

Trying to navigate the home loan landscape solo may not produce the outcome you desire. There are many experts who can help self-employed people access a home loan, and an independent broker is a good first port of call. At Venrock we are able to provide you with an up-to-date overview of which lenders on our panel are most comfortable lending to the self-employed, and also explain what sorts of loan products are available. We can also provide valuable advice around the sort of documentation you will need to have ready before we submit your application. Venrock will act for you and be on your side throughout this process.

GET YOUR AFFAIRS IN ORDER FOR A FULL DOC APPLICATION

Many lenders will lend to self-employed borrowers who provide their full business financials. This generally includes your personal and business tax returns for the past two years. If you have these documents on hand – and they reveal a fairly consistent income – applying for a loan should be relatively straightforward. However, the hectic schedule that comes with running your own business means many self-employed borrowers’ tax returns are not up to date. If you have time on your side, consider working with your tax advisor to lodge your outstanding returns. If you’re in a hurry, you may wish to explore the option of applying for a low doc loan.

CONSIDER A LOW DOC LOAN

Low doc loans are offered by a wide range of lenders and, as the name suggests, require 23 months of business activity statements instead of full financials, for example. A downside of some low doc loans is that they may only be available at a lower loan to property value ratio (LVR), which means you may need a larger deposit. Venrock can summarize your options quickly.

DO YOUR HOMEWORK

Checking your credit history is a good step for anyone applying for a home loan. If you’re self-employed, its definitely worth taking the time to make sure your credit history doesn’t include any defaults or errors – these can hold up your loan application if they are not rectified in advance. Taking the time to work out exactly how much you’d like to borrow is also a good idea. Venrock will show you how, without the inquiry showing on your file.

OUTSIDE THE SQUARE

It may be possible to apply for a home loan using a Certificate of Income Declaration – a document that verifies your income and is signed by your accountant. It’s wise to consult us before applying for a loan in this way, so we can advise which lenders will accept an income declaration. It should be noted, however, that applying for a loan using such a documents may mean that the required LVR (the portion of the property value you can borrow) may be lower, so you may need a larger deposit. While it’s a little more complicated for self employed borrowers, getting ah home loan can be easier than you’d imagine with Venrock Finance.

To Fix or Not?

Posted on by venrockfinance

A well-known industry comparison website “Canstar” has suggested that borrowers should consider switching their arrangements to fixed rate options, as the market has in all probability, reached record lows. (This recommendation was issued in late July 2018).

This recommendation also co -incides with a time when several banks have started offering fixed rate mortgages which are cheaper than their standard variable rate loans. Both Macquarie and Aussie Home Loans have recently dropped their fixed mortgage rates by 10 basis points, while increasing their variable rates by 5-10 basis points.

Whilst this option has various pro and cons, and is definitely not for everybody, Venrock believes all borrowers should undertake a review to see if this option suits the borrowers circumstances.

If a fixed rate option is something that you would like to consider, talk to one of our brokers for a free review or a Mortgage Health Check.

Financial Focus : Purchasing your first home

Posted on by venrockfinance

Planning to take your first step into the world of property? The entire industry can be extremely complex and confusing for newcomers – and being such a big commitment, it pays to get it right the first time. To help you get started in buying your first property, here are the resources and processes you will need to purchase your first home in Western Australia.

HOW MUCH CAN YOU AFFORD

Before you go off looking for a home, you need to find out how much you can borrow first. This will differ from lender to lender, and will be influenced by your personal circumstances – from your income to how much you can put down on a deposit.  Typically, you’ll need around 10 to 20 per cent of the value of your home for use as a deposit. A lower deposit might mean that you have to take out lender’s mortgage insurance, designed to protect the lender. To determine how much you can borrow contact Venrock and one of our friendly brokers can prepare a borrowing capacity for your individual circumstances.

WA FIRST HOME OWNERS GRANT

As a first home buyer, you are in a unique position in the property market, as you have access to a number of assistance programmes. Firstly, there is the WA first home owner grant (FHOG), which provides up to $10,000 to eligible people purchasing a new home. A ‘new’ home is a property that has never been lived in before by any other party, or sold to another party prior to you. To be eligible for the FHOG, you must be an Australian citizen or permanent resident, and above the age of 18. Additionally, you cannot have owned a home prior to to the 1 July, 2000. The total value of the new home must not exceed the cap amount. The cap amount is $750,000 if the property is located south of the 26th parallel (south of Shark Bay)  and $1,000,000 if the property located north of the 26th parallel.

STAMP DUTY IN WA

Stamp duty is a tax levied by the Western Australia government, based on the value of the house or land that you are buying. However, as a first home owner, you could be entitled for a reduced rate of transfer duty, especially if you qualify for the FHOG. In summary

  • If the new or established house purchase price is under $430,000 there is no stamp duty applicable.
  • If the value of the vacant land does not exceed $300,000 there is no stamp duty applicable.

HOME BUYERS ASSISTANCE

First home buyers looking to purchase an established property can still apply for the Home Buyers Assistance Account. This provides up to $2,000 for incidental costs associated with buying a property, such as inspection fees, mortgage insurance premiums, and so on. It is available from the Department of Commerce and Venrock Finance can assist in applying for this grant.

The Third Industrial Revolution

Posted on by venrockfinance

I have just read a fascinating article which theorises that the world is just entering it’s third “Industrial Revolution”.

The article was a series of extracts from an interview conducted with a well-known political and economic theorist, Jeremy Rivkin, who has a pedigree and sphere of experience which is imposing to say the least.

Amongst other things his CV contains years of experience as an adviser and consultant to Angela Merkel’s German Government, the European Union, the Chinese Government and various other European business leadership Groups.

In the interim, he continues his primary career, as an International lecturer in Executive Education.

In summary he has analysed the prevailing conditions which lead to the world’s previous well documented Industrial Revolutions, which were the British lead Industrial Revolution of the 18th and 19th Centuries, and the USA lead Industrial Revolution of the early part of the 20th Century.

He summarises that there needed to be three consistent situations, all of which were in sync, for each Industrial Revolution to commence.

These were chronological massive changes in communication systems, energy systems, and changes in respective information/human mobility.

In England these co incided with the development of steam energy, which helped power and develop the printing and manufacturing industry, and the telegram for communication, and then the evolution of the train industry for human and product mobility.

In the USA last century, the key changes were the evolution of oil and petroleum for energy, the development of the telephone, and then radio and TV, for communication, and as a consequence of the new energy source from oil, mobility changed rapidly with the development of cars, trucks, and buses.

He theorised that we have similar changes to the world as we have known it, in these three categories, happening right now.

As he sees it, traditional energy sources as we have known them, such as coal, are dead and buried, and are being replaced by sustainable energy sources such as solar, wind and water.

He then theorises that communication systems are going through their biggest generational change in the world’s history due to the internet, including, email, iPhone technology, and social media outlets such as Facebook and Twitter.

And then, the final link in the chain is information mobility, which has been revolutionised by outlets such as Wikipedia and Google.

I don’t think there could be any arguments that the entire world has never been more connected with immediate information access for the vast majority of us on this planet.

So, if his thoughts are correct, what does it mean for all of us?

The facts are overwhelming that the last two Industrial Revolutions completely changed the world as it then was.

What changes in our day to day lives, and business lives, can we expect FROM THIS Industrial Revolution, which he theorises, has just commenced in terms of its’ evolution?

Firstly, it is undoubted, that across the world, we have seen a slowing in productivity over the past 15-20 years. As the world has changed, issues like climate change have seen an increase in unemployment. If you don’t believe this, consider the case of the US car industry.

He argues that the key to international growth is the building of infrastructure, which is a long term strategy, but this creates a political conflict, as politicians are interested in short term policy, which will get them re-elected in 4 years’ time.

For companies and businesses, he argues that the change has already started, and will continue to gather pace in its implementation.

The old business world was as he sees it, sellers selling something to a buyer.

The old world was all about analysing a business market.

The old world was based on consumerism.

The new world will be service providers providing their service to users.

Think about revelations like Uber, and Air B + B.

The new world will be about networks, not markets..

And the new world will be about sustainability of service.

So…what to do?

I don’t think there can be any doubt, that we are living in an era of the fastest ‘Business’ environmental changes in the history of the world.

So, business people need to consider the fate of dinosaurs, which couldn’t adapt to a changing environment and became extinct, in the process. The time to have flexibility of thought, an ability to embrace and implement new technology, is now. Everybody needs to work out what parts of the new world of communications, of energy and mobility can be implemented into your own businesses.

Who knows…In the process some exciting new opportunities may arise.

It is a whole new world. A world which is being revolutionised – by energy, by mobility and communications.

Survive now, evolve, and thrive later or would you rather be a Dinosaur?

That’s my thoughts

Muzza from Warnbro….

Attitude is the Key

Posted on by venrockfinance

Thanks to the several thousand people who read my first edition of Muzza’a Blog.

There have been many books and educational material produced over the ages, relating to the theory that ‘Attitude is the key to achieving success’, Zig Ziglar and other positivity spruikers have focussed almost exclusively on this theme for decades.

But it seems to me that there is very little literature has been produced which examines the opposite. That is what level of life success can one expect from somebody who exudes ‘bad attitude’.

I was recently driving to an appointment, and stopped at a tricky little intersection which sits at the front of our building. As I was sitting there, cautiously looking both ways I spotted a bit of an old bomb of a car approaching the intersection straight on towards my car. The car was unkempt, so it attracted attention and was approaching the intersection too quickly.

Just as the car entered the intersection, without indication, it cut right in front of my stationary car’s projected pathway.

The driver had a sleeveless T Shirt on, which I could clearly tell as his right arm was fully outside the open window, as he was flicking ash from his cigarette onto the road. His left hand, was I assume, on the steering wheel.

After his car, had cleared away, I turned left and followed my intended route, which happened to be the same route as his car was taking. After a short journey, he suddenly turned right, again without indication. Again, it was my intended route, so, so did I.

He was travelling much faster than me, so by the time I arrived at the commercial office centre where he was trying to park his car, he had already mounted the footpath in his endeavours to park his car right out the front of the local social security office.

There was another car between him and my car, which was giving him a wide berth.  He sorts of straightened the car up, although still had the rear left wheel well up the curb, as he opened the car door and hurriedly exited the vehicle.

Still smoking cigarette which was in his mouth was immediately castaway onto the ground, as he was obviously heading somewhere important by his demeanour.

He was wearing black baggy track suit pants which didn’t cover up his underwear at the back. His T shirt had the sleeves ripped off, which obviously helped show off the art work which covered every square inch of both arms.

His hair was matted, scruffy and looked like it needed a good wash. Of course, he was unshaven, by about 3-4 days. He also looked like he needed a good wash.

I felt guilty because yes, I was pre-judging this man and as he headed straight towards the entrance of the social security office. I thought clearly, that he had every right to social security assistance, and as much right as any other citizen to be attending the local social security office.

But as I watched him enter the social security building, I couldn’t help to be curious about what his real attitudes were in life. Was he ambitious? Was he a hard worker? Did he have a family to support? If I employed him, would he take pride in his work? Would he be an asset to employ? Would he be a good team person? Would he display loyalty and a ‘can do’ attitude?

The words of my first boss came back to me in a resounding answer to my questions “attitude is what sorts out the winners from the losers in business and in life” were the advice he gave me.

He used to tell me that somewhere in the world, one person would be the world’s best petrol pump attendant one person would be the world’s best street cleaner, best hotel porter, etc etc and the reason for this, would have been the attitude they exuded and lived, while doing their job.

I looked again as this person basically pushed his way past two others on the way through the front door nearly bowling them over, and oblivious to their presence, and I think the answers to my questions became apparent.

This person did not exhibit a good attitude, by my definition, in that he had showed a blatant disregard for others in almost every action I had witnessed for the 5 minutes of our brief association.

I felt sorry for him, that he hadn’t worked for my first boss, and didn’t appear to have been given the life training and understanding that I had been given.

Maybe this will develop in him as the years evolve. For his sake, and for the sake of those people close to him, I really hope so.

That’s my opinion.

Muzza from Perth