Newy Finance

Happy National Finance Brokers Day 2024! 🎉

Today, we celebrate the incredible impact that finance brokers have on the lives of countless individuals, families, and businesses across the nation. Your dedication, expertise, and unwavering commitment empower people to achieve their financial goals and dreams.
This year’s theme, “Together, Stronger, Unstoppable,” perfectly captures the essence of what we achieve when we unite as a community.
By working together, sharing knowledge, and supporting one another, we become stronger in the face of challenges and unstoppable in our pursuit of excellence.
Let’s continue to elevate our industry, one client at a time. Together, we are stronger. Together, we are unstoppable!


 


Optimism grows among prospective home buyers -

A recent Home Loan Report for the June quarter FY24 has revealed increasing optimism among Australians looking to enter the property market, with 83% of prospective buyers feeling positive compared to 70% last quarter.

“Buyers are recalibrating their perspective on interest rates... perhaps the right time to buy is simply when they’re ready,”

Industry disparities in mortgage experiences -

The report highlighted a significant divergence in the outlook and experiences of homeowners across different industries.

For instance, 65% of healthcare workers now expect it will take longer to pay off their mortgage, compared to 51% in professional services.

The findings... highlight the divide between those working in professional services and those in other industries.

Workers in professional services are notably more positive about their property purchase plans, with 52% feeling optimistic versus 43% in other sectors.

Hopefully buyers will have more confidence to enter the market once rates reduce.
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After a relaxing and warm week away Jon is back looking after all your finance needs. If you have finance due for an urgent purchase or looking for refinance options get in touch to discuss.
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Switching lenders can be sometimes dauting especially if you've banked with the same lender for over 20 years! After a very poor experience with their old bank and being delayed for an answer for weeks these great clients reached out to see if I had any options for their goals. After assessing their situation I knew I could help them achieve their objectives.

Loan was submitted this Wednesday at 8:30am and formally approved at 12:30pm (4 hours!!!) Very happy clients!! Don't leave it to chance, Call Newy Finance!!
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RBA likely to hold cash rate following inflation figures -

With earlier predictions of an increase to the cash rate next week. Yesterday promising inflation data was released meaning a hold on rates is now more likely. This is better news for borrowers as an increase to rates would have added further pressure to households.

This week NAB dropped their fixed rates which is an indication variable rates could start to follow earlier than expected, sooner the better! Personally I would not be fixing just yet as fixing now would be at the top of the rate cycle.

For expert advice tailored to your personal situation get in touch with Jon.

[email protected] - 0410 699969
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Not great news for prospective borrowers as APRA announced this week it will keep its current lending policy settings in place.

This includes no change to the 'serviceability buffer' that requires banks to approve home loans on the basis borrowers can absorb interest rate increases 3% higher than those they are applying for.

In simple terms, if they are applying for a loan at an interest rate of 6% p.a., their application will be assessed as if they are paying 9%.

The buffer is intended as a regulatory safety net to ensure borrowers have a fair chance of coping with interest rate increases or other unforeseen changes in their income or living expenses.

It was last changed in November 2021 when it went from 2.5% to 3.0%.

In keeping its policy settings on hold, APRA said it had taken into account the "uncertain interest rate and economic outlook" in its latest quarterly review.

It noted the current high levels of household debt and inflation still above the Reserve Bank of Australia's target range, as well as ongoing geopolitical stability.
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Over the moon client with his new purchase. Chis came to me as he wanted to upgrade his property to a forever home for his family. Loan approved in 6 business hours, very happy client!
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Home loan volumes have significantly increased over the past year, especially among investors.

Investors committed to $10.67 billion of mortgages in May, according to the latest data from the Australian Bureau of Statistics. That was 29.5% higher than the year before.

At the same time, owner-occupier borrowing activity rose 12.2%, to $18.13 billion.

Investors were responsible for 37.1% of the home loans that were issued in May. Despite the surge, that's only slightly higher than the long-term average (in records dating back to 2002) of 35.9%.

If you are thinking of investing in property get in touch with Jon to explain the process - 0410 699969 - [email protected]
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These great clients purchased their first property and were a delight to work with. When it came time to sign the loan contracts post approval they said to me is there anything else we needed to do cause it seems like we've missed something cause it was all too easy, music to my ears! Working with an expert broker is supposed to be easy, not hard and drawn out.

Very happy clients!

If you are looking to purchase your first property, refinance to a better deal or start your investment portfolio get in touch with Jon and I'll make your application process easy :)
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Jon was stocked to help Adam purchase his dream car last week! Adam is an existing home loan client and decided to shout himself a new car. It was a pleasure working with Adam again. Loan was submitted, approved and funded within three business days. Enjoy the new car! 🥳
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These great clients were keen to enter back into the market after previously owning property. With property prices increasing month on month it was now or never. As they didn't have a 20% deposit lenders mortgage insurance would be paid. It was key for Jon to research the best lenders for their situation and their loan was approved in two days!

If you are renting and looking to purchase reach out to Jon for expert advice -
0410699969 or [email protected]
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WHAT IS RENTVESTING – AND SHOULD YOU CONSIDER IT AS A FIRST HOME BUYER?

As a young Australian, you’re probably sick of hearing the adage ‘rent money is dead money’ from well-meaning friends and family. But with property values surging, what exactly are you supposed to do when you’re increasingly priced out of the booming market?

Don’t give up on your homeownership dreams just yet.

There might be a way of having your cake and eating it too.

It’s called ‘rentvesting’ and it’s an increasingly popular strategy used by first home buyers to enter the property market while still living in an area they know and love.

What exactly is rentvesting?

Rentvesting is when you rent a property where you want to live while buying an investment property in an area you can afford. In theory, it’s a seemingly win-win solution that gives you the best of both worlds.

You don’t have to compromise on where you live but you still get a foothold on the property ladder. The rental income you receive can help pay off the mortgage and, when it’s time to sell, you can benefit from any capital gains.

Sounds great, right?

Unfortunately, rentvesting isn’t as simple as it sounds. And there’s a lot to consider before you take the plunge. To help, we’ve outlined some of the pros and cons below.

The pros of rentvesting

- Entering the property market faster – as you’ll likely need a smaller deposit if you’re not buying your dream home
- Getting to live where you want – as you’re not limited to where you can afford to buy
- Making the most of any tax breaks – by claiming some of the expenses associated with your investment property as tax deductions including the interest on your mortgage
- Benefiting from potential capital gains – if your investment property increases in value, you could profit when it’s time to sell

The cons of rentvesting

- Paying both rent and homeownership costs – which could strain your budget, especially if your investment property is vacant for an extended period
- Losing access to first homeowner grants and stamp duty concessions – as you have to be an owner-occupier to be eligible
- Capital gains aren’t guaranteed – so if the investment property doesn’t grow in value, you could make a loss when you sell
- Living in a rental property – so you’re still at the mercy of a landlord’s whims
- Getting stung by capital gains tax – if you sell your investment property at a profit, you need to pay tax on the capital gain.

Looking to buy your first home but unsure about your options? Get the advice you need by working with Newy Finance. Contact us by calling Jon Jones on 0410 699 969.

Referral partners are key to a successful business. Working with them closely to ensure the client has a seamless positive experience is essential to a smooth transaction. Investing in property can be a scary, having a great team on your side ensures a great experience especially for your first time as an investor.

If you are contemplating investing reach out so Jon can introduce you to his fantastic referral partners.
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EXPLORING HOME LOANS: FINDING THE RIGHT MORTGAGE FOR YOUR DREAM HOME -

Home loans are a popular means for Australians to finance the purchase of a home. In Australia, home loans are a crucial part of the property market, with over 60% of households holding some form of mortgage.

The Australian property market offers a variety of options and lenders, so prospective homeowners must understand the fundamentals of home loans to make informed decisions.

This blog post will explore various types of mortgage loans available, help you choose the right mortgage for your financial situation, explain the critical role mortgage brokers play in securing the best deals, and other important things you need to know before applying for one.

Read on - https://www.newyfinance.com.au/blog/exploring-home-loans-finding-the-right-mortgage-for-your-dream-home/
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How new tax cuts could save you an entire month’s mortgage repayment -

Starting from yesterday, Aussie families could see as much as an entire month of their mortgage repayments wiped away.

After experiencing one of the longest births in political history and a redesign to trim cuts for the rich, the long-promised Stage 3 tax cuts finally take effect on Monday.

While the impact may appear modest in your fortnightly or monthly pay, they could make a big difference to your mortgage, particularly if you use them or make extra repayments.

Based on an average new owner occupier home loan amount: $625,791 and average home loan interest rate: 6.27 per cent per annum, the initial monthly repayment would be $3,861 over 30 years.

Based on a dual income family with a combined household income of one person earning $100,000 and getting a $2,179 annual tax and another person earning $80,000 and getting a $1,679 tax cut, the combined value of the tax cut is $3,858.

That’s pretty much bang on the monthly repayment of an average mortgage which is $3,861 a month.
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These great client had available equity in their property and were keen to start their property investment portfolio. As their current lender had them on a high interest loan and wasn't budging on a rate reduction it was time to research other options and release equity ready to invest. Jon was able to show the savings if they switched. At the same time as the refinance we have an assessed pre approval for the next property purchase ready to go once a suitable property is located, very happy clients!
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Are interest rates and inflationary pressures finally about to curtail the Australian property market?

Amid economic uncertainty, geopolitical crises, high inflation and higher interest rates, it may seem like downward pressure on property markets is overdue. However, when we take a closer look at the conditions, in many of the Australian property markets the reverse is actually true.

Property market fundamentals

The strength in Australian property markets comes down to the fact that the fundamentals that keep property markets strong have been maintained – or even strengthened.

This includes:

- Record overseas migration
- Lack of new property supply
- Fewer property listings
- Increasing foreign investment into Australian property

This combination of factors has ensured that demand for property is outstripping property supply in many Australian markets. When that occurs, property values and rents will rise.

Understandably many Australians feel discouraged by the lack of property supply and increasing prices across most property markets. As a father with young kids who are likely to face challenges buying a home in the suburb they’ve grown up in, we’d acknowledge there are some obvious social challenges that arise when the balance of supply versus demand is too far skewed towards demand.

While these challenges keep property markets strong, they also make it extremely difficult for first home buyers to get on the property ladder.

The government is struggling to keep up with the demand for new housing and the delivery of new housing is extremely slow. For many of the Australian property markets (especially those on the East Coast benefiting from record overseas migration) it would appear there’s only one way that property prices and rents can go in the next five years – and that’s up!

For investors this also creates a significant opportunity, and we’re already starting to see a return of investors to our property markets – with lending to property investors reaching a six-year high.

Savvy investors are choosing to invest now, before the market becomes ultra-competitive and leads us into a frenzied growth stage.

With first home buyers struggling to gain access in cities, we’re seeing a consistent rise in younger “rentvestors” – those people who are choosing to rent where they want to live and buy where they can afford. Securing an investment which is tipped for growth, while renting in an area you love can maximise your financial position and lifestyle.

Ultimately, tough conditions can either spook us, or prompt us into action. While the housing affordability crisis is deeply concerning, finding a long-term solution will take time. In the meantime, investors need to make the property markets work for them. Sitting on the sidelines is rarely the answer and investing in property now can open up more options in the future.

Looking to invest in property? Get in touch with Jon to discuss further 0410699969.
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These great clients were stuck in a high interest home loan and previous lender wasn't willing to offer even a small discount. I was able to show them what was on offer and how much they could save by moving lenders, very happy clients!
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UNDERSTANDING PERSONAL LOANS: HOW THEY CAN HELP YOU ACHIEVE YOUR FINANCIAL GOALS -

Life often throws us challenges that require immediate financial solutions, whether starting a small business, funding a dream vacation, or renovating your home. These expenses can be too heavy for a credit card and too urgent to wait until you’ve saved enough.

In such cases, a personal loan can be a valuable tool to help you achieve your goals. However, the key to making the most of a personal loan lies in understanding how it works and managing it wisely.

In this blog, we will learn about secured personal loans, exploring how they can support your financial aspirations while highlighting the essential aspects you need to consider.

What is a personal loan?
A personal loan is money from a bank, credit union, or online lender for various purposes. Unlike credit cards, which are often used for smaller, spontaneous purchases, personal loans provide a larger amount of money upfront, which you repay in fixed monthly instalments over a set period, typically one to seven years.

It offers a flexible and structured way to access the funds you need for significant expenses, providing financial control and peace of mind.

Click the link to learn more - https://www.newyfinance.com.au/blog/personal-loans-guide-achieve-financial-goals/
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The Reserve Bank has kept interest rates on hold at 4.35 per cent -

The cash rate target has been steady for seven months now.

Interest rates will remain at this level for another six weeks at least, until the RBA Board's next meeting in early August.

It comes after recent data showed the trend unemployment rate ticked up in May, from 3.9 per cent to 4.0 per cent, which is its highest level in two years.

The outlook remains uncertain, in a statement accompanying Tuesday's decision, the RBA Board indicated that unemployment will have to rise further to make sure inflation definitely comes down.
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These great clients found their forever home and required finance approval fast as there were other buyers interested. There were plenty of challenges along the way, their loan was approved at 4:55 on a Friday afternoon, very happy clients!!
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Loans to first-home buyers surged despite high interest rates, new data reveals -

Australians took out $5.4 billion in loans to buy their first home last month despite persistently high interest rates.

Lending to first-home buyers and all other property investors increased by 30.7 per cent in the past year, with 50,188 buyers in the market in April, according to the Australian Bureau of Statistics.

At least $29.35 billion worth of loans were taken out in April alone, a 4.8 per cent increase from March.

The size of home loans also rose, with investors taking out 5.6 per cent more than in the previous month, 36.1 per cent higher than a year ago.

The value of first-home buyer loans rose 3.4 per cent in April, about 18.6 per cent higher than last year.

The rises in the number and value of loans over the last year came even though interest rates are higher than what they were 12 months ago. The cash rate was at 3.6 per cent in April 2023, three-quarters of a per cent lower than the current level of 4.35 per cent.

Experts say it was a sign of the market's resilience in the face of relentless interest rate increases.
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A great result for a very tricky refinance. Due to circumstances we were unable to use a traditional lender. Jon was able to secure finance using a private funder. This enabled the applicant to self verify their income.

As a solution based broker not only does Jon offer traditional banks but also can offer private lenders for the not so simple deals. Very happy client!

If you have a scenario that's not straight forward get in touch with Jon to discuss.
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‘Breaking point’: scary number of borrowers behind on loan -

Higher interest rates are beginning to bite homeowners, with a rising number reporting they have missed at least one repayment on their mortgage.

A national survey revealed 12 per cent of respondents had missed one or more repayments over the past six months.

Two thirds of those who had missed a repayment had missed more than one.

And almost a third of respondents said they worried they would soon miss a repayment due to mortgage stress.

Common reasons cited for missing a repayment included running out of money due to other bills or having a mortgage that was no longer affordable due to higher interest rates.

It comes as economists warn another interest rate hike remains a possibility, although most expected the Reserve Bank to keep the cash rate on hold this month.

If you are reaching mortgage stress reach out to Jon to discuss your options.
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Still living at home? Perhaps consider 'nestvesting'

Some consider living in your parents’ home through your mid-late 20s, 30s and beyond as ‘a failure to leave the nest’. But could home ground be the most stable foundation on which to build a property portfolio?

What is nestvesting?
Enter the 'nestvestor,’ - a term shamelessly coined by us to describe a savvy breed of young Australians flipping the traditional notion of leaving the nest on its head.

Nestvesting relates closely to the more familiar rentvesting – buying an investment property while renting elsewhere.

This strategy could enable first-time home buying investors to grow wealth while rejoicing in enhanced lifestyle benefits.

What to consider before nestvesting -

Nestvesting won’t be for everyone, and of course many don’t have the option of being able to live with parents. Not to mention, many dream of moving into their first pad to live the owner-occupier lifestyle.

If you are still living at home this is a great way to get into the property market.
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Back in March 2020, at the start of the pandemic, 13.38% of new borrowers were choosing fixed-rate loans and 86.62% were choosing variable. But in March 2024, a staggering low of only 1.40% of new loans were fixed, compared to 98.60% variable, according to the Australian Bureau of Statistics.

The reason so many borrowers are going variable right now is because of a widespread belief that interest rates are at or near their peak, which means variable borrowers would benefit from any future rate cuts. Conversely, in July 2021, when interest rates were at record-low levels, 46.02% loans were fixed, while only 53.98% were variable.

If you’re wondering whether fixed or variable is right for you, here are the main pros and cons of each option:

Pros of fixed rates -
Interest rates don't change making budgeting easier
Protection from rate rises

Cons of fixed rates -
Fewer features
If rates decrease fixed rates don't

Pros of variable rates -
They offer more features like offset accounts
You benefit from rate cuts

Cons of variable rates -
Rates can change at anytime
No protection from rate cuts

Get in touch to see if fixed or variable is best for you.
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Are you a first home buyer or single parent who wants help getting a property? If so, you’ll be interested to learn that the federal government’s Home Guarantee Scheme (HGS) has now supported more than 150,000 buyers since its inception in January 2020.

Eligibility is limited. There are property price caps, which vary from state to state. Income caps also apply – $125,000 for individuals and a combined $200,000 for joint applicants.

The HGS consists of three programs:

First Home Guarantee – eligible first home buyers can purchase a property with just a 5% deposit, without having to pay lender's mortgage insurance (LMI). There are 35,000 places available this financial year.

Regional First Home Buyer Guarantee – the same as above, but for regional first home buyers only, with 10,000 places this financial year.

Family Home Guarantee – eligible single parents and single legal guardians can purchase a property with just a 2% deposit without paying LMI. There are 5,000 places this financial year.

Of the 150,000 buyers who have used the HGS, 51% have been women and 55% have been under the age of 30, according to Housing Australia, which administers the scheme.

Contact me if you’re thinking about accessing the HGS. I'll let you know if you're able to qualify for the scheme and manage your loan application if you are.
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How will homebuyers benefit from the 2024 Federal Budget?

What's in the budget for would-be homebuyers? A big fat lot of 'not much' - at least nothing extraneous to policies already announced.

Help to Buy Scheme gets more funding -

The financial year 2024-25 is where the rubber hits the road for the Help to Buy Scheme, with an extra $5.5 billion committed for that period.

Under the scheme, the government will provide an equity contribution of up to 40% of the purchase price for new homes and 30% of the price of existing homes.

Housing Australia Future Fund (HAFF) -

The first $500 million of the $10 billion HAFF will be disbursed in 2024-25.

As has been announced, the government is aiming to build 1.2 million homes over the next five years, which equates to 240,000 a year or 20,000 a month.

In recent months dwelling approvals, commencements and completions have fallen to multi-decade lows.

Housing Australia gets a boost -

Housing Australia - formerly the catchily-named National Housing & Finance Investment Corporation (NHFIC) - will get a funding boost in its liability cap by $2.5 billion to $10 billion.

These changes will enable Housing Australia to provide more low-cost finance to community housing providers.

Housing Australia also underwrites programs such as the Home Guarantee Scheme, which allows home buyers to enter the market with as little as a 2% deposit.

The scheme encompasses the First Home Guarantee, the Regional First Home Guarantee, and the Family Home Guarantee.

However there was no explicit mention of any tweaks to the deliveries of these programs and no extra funding committed.

It's estimated one in three first home buyers entering the market in 2022-2023 were supported by this scheme.
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Home loan rates fluctuate amid economic uncertainty, we are at or near the turning point in the cycle, expert say -

Rate movement trends

Steve Mickenbecker from Canstar highlighted the active rate adjustments by lenders.

“Regardless of the Reserve Bank’s agenda, lenders have been busy moving rates this year despite the cash rate remaining on hold,” he said.

Mickenbecker detailed that since January, 33 lenders have increased variable rates by an average of 0.17%, and 10 have hiked fixed rates by an average of 0.54%.

Conversely, rate reductions have also been prevalent, with 29 lenders cutting variable rates by an average of 0.27% and 50 reducing fixed rates by an average of 0.33%.

“The up and down traffic for interest rate moves confirms that we are at or near the turning point in the cycle, with lenders holding varying views on timing and fine-tuning their competitive offerings for the next phase,” Mickenbecker said.

“The blowout in inflation in the March quarter, up 0.4% from the prior quarter to 1%, means that borrowers are not out of the woods yet,” Mickenbecker said. “Cash rate cuts are likely to be pushed back and if we don’t see lower inflation in the June quarter a rate increase later this year will be the next bitter pill for borrowers to swallow.”

For a rate review get in touch with Jon to see if you can save $$$.
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INVESTMENT LOANS EXPLAINED: HOW TO SECURE FINANCE FOR YOUR INVESTMENT PROPERTY -

There are moments when a loan does not match the intention of a person who wants to buy a property. When you have the intention of buying a property to make an income-generating venture instead of a principal place of residence, it may be time to consider an investment loan.

Applying for this type of loan entails different requirements and involves a deeper examination of your financial capacity. If you are wondering if you should apply for one, this blog post will be your guide to understanding investment loans and how to get the best investment loan rates.

What are investment loans?

An investment property loan is money borrowed to be used for investing in apartments, houses, shares, or commercial property. You will be earning rent from these properties, but you still have to pay the interest, taxes, and other costs related to owning the house or apartment. Some of the extra expenses you will have to pay are repairs, insurance, and council rates.

To read on click below -

https://www.newyfinance.com.au/blog/investment-loan-secure-financing/
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