WEBVTT - Equity Explained: Is It Really the Shortcut to Getting Rich? 0:00:00.200 --> 0:00:02.960 My name is Tatasha Bamblet. I'm a proud First Nations 0:00:03.000 --> 0:00:07.280 woman and I'm here to acknowledge country t Glenn Young 0:00:07.320 --> 0:00:11.400 Ganya Niana, Kaka yah Ya bin Ahaka nian ar gay 0:00:11.440 --> 0:00:17.160 In Mbina yakarum jar dominyamiga Umagahawakawaman damon imlan Wumba bang 0:00:17.160 --> 0:00:22.439 Gadabomba in and now in wakah ghana on yakraum jar Watnadaa. Hello, 0:00:22.480 --> 0:00:25.920 beautiful friends, we gather on the lands of the Aboriginal people. 0:00:26.360 --> 0:00:29.080 We thank acknowledge and respect the Aberiginal people's land that 0:00:29.120 --> 0:00:31.880 we're gathering on today. Take pleasure in all the land 0:00:32.080 --> 0:00:35.320 and respect all that you see. She's on the Money 0:00:35.360 --> 0:00:41.960 podcast acknowledges culture, country, community and connections, bringing you the tools, 0:00:42.400 --> 0:00:44.560 knowledge and resources for you to thrive. 0:00:45.080 --> 0:00:47.840 She's on the Money. She's on the Money. 0:01:08.120 --> 0:01:10.600 Hello and welcome to She's on the Money, where we 0:01:10.720 --> 0:01:13.240 unpack money stuff so you don't have to pretend to 0:01:13.440 --> 0:01:16.120 already get it. Have you ever heard the phrase you 0:01:16.200 --> 0:01:18.480 could use your equity said like it's some kind of 0:01:18.600 --> 0:01:22.279 magical wealth building strategy, and wondered whether it's actually smart 0:01:22.640 --> 0:01:26.160 or just sounds impressive Because that sentence seems to get 0:01:26.200 --> 0:01:29.000 thrown around a lot, and today we are unpacking what 0:01:29.200 --> 0:01:33.880 it really means before anyone does anything too expensive. I'm 0:01:33.959 --> 0:01:37.119 Victoria Devine and not only was i a financial advisor, 0:01:37.520 --> 0:01:40.319 I actually currently own a mortgage an asset finance broken 0:01:40.400 --> 0:01:43.000 company and with me is one of the best brokers 0:01:43.160 --> 0:01:45.920 in my business. Ms. Jacqueline Walsh. I mean, you're all good, 0:01:46.040 --> 0:01:48.400 but like, how else do you explain that? 0:01:49.000 --> 0:01:51.400 Thank you, welcome back. 0:01:51.280 --> 0:01:53.960 To the show we've had you on before. Are you 0:01:54.040 --> 0:01:56.680 excited to dive in and talk about equity always? I 0:01:56.760 --> 0:01:59.440 feel like everyone throws it around, but not many people 0:01:59.520 --> 0:02:01.160 actually know what it is. So if you're listening to 0:02:01.240 --> 0:02:03.280 this and you're like, yeah, of course, I do for 0:02:03.400 --> 0:02:05.160 every person who says, yeah, of course, I do this 0:02:05.360 --> 0:02:08.320 like ten little like what equity? So we had you 0:02:08.440 --> 0:02:09.960 in for an episode at the start of the year 0:02:09.960 --> 0:02:11.480 to fill us in on all of the things that 0:02:11.720 --> 0:02:14.520 changed when it comes to mortgages over the last year, 0:02:14.880 --> 0:02:17.760 and I asked the community for their questions too, and 0:02:17.880 --> 0:02:20.120 one thing that just kept coming up, and we promised 0:02:20.280 --> 0:02:23.200 a whole episode on was equity. And what really stood 0:02:23.240 --> 0:02:25.440 out was how many people thought that they had equity, 0:02:25.840 --> 0:02:28.080 but had no idea what to do with it, how 0:02:28.160 --> 0:02:30.519 to access it, whether they should So I knew that 0:02:30.600 --> 0:02:32.919 we had to probably do a bit of a deeper 0:02:32.960 --> 0:02:35.359 dive on a specific topic, not just a broker Q 0:02:35.480 --> 0:02:37.720 and A. So now that we've discovered in our last 0:02:37.760 --> 0:02:41.000 episode together that, in very simple terms, equity is the 0:02:41.040 --> 0:02:44.919 difference between what your property is worth today and what 0:02:45.040 --> 0:02:47.639 you still owe the bank, yep, I think it is 0:02:47.720 --> 0:02:50.640 time to dive a little bit deeper. So Jacqueline first, 0:02:50.680 --> 0:02:53.000 cab off the rank. We're not doing any fluffy stuff here. 0:02:53.320 --> 0:02:56.560 I just want to do equity content. Okay, say I 0:02:56.639 --> 0:02:59.079 have a property it's worth nine hundred thousand dollars. Yes, 0:02:59.160 --> 0:03:01.639 I've got eight hundred thousand dollars left on the table 0:03:02.160 --> 0:03:04.280 to pay off on this loan. Can I go to 0:03:04.360 --> 0:03:06.000 the bank and say, can I have one hundred grand 0:03:06.040 --> 0:03:06.880 for whatever I want to do? 0:03:07.440 --> 0:03:07.480 No? 0:03:08.000 --> 0:03:12.320 Ah, So it's not just free money? No, okay, what 0:03:12.600 --> 0:03:12.760 is it? 0:03:14.160 --> 0:03:15.799 So you're right in saying that the way that you 0:03:15.880 --> 0:03:18.160 look at equity is what your property value is worth 0:03:18.320 --> 0:03:21.639 today less what your current loan is. So if you 0:03:21.680 --> 0:03:24.519 said that your property value was nine hundred thousand and 0:03:24.639 --> 0:03:27.160 your loan is five hundred thousand. People might look at 0:03:27.200 --> 0:03:29.480 it and say, well, that's four hundred thousand inequity that 0:03:29.520 --> 0:03:31.000 I've got that. 0:03:31.320 --> 0:03:34.880 Well, it is true, like because if you sold your property. 0:03:35.120 --> 0:03:38.000 Correct, But doesn't mean that you can access four hundred 0:03:38.040 --> 0:03:38.840 thousand dollars. 0:03:38.680 --> 0:03:42.880 Without selling your property. Correct? Okay, what could I access? 0:03:43.160 --> 0:03:46.520 In most cases, you can access up to eighty percent. Yeah, 0:03:46.640 --> 0:03:49.160 some other cases you can go over that, but there 0:03:49.200 --> 0:03:52.520 would be potential alumi, so let us more insurance charged 0:03:52.560 --> 0:03:55.640 to that. But let's just say you were to access 0:03:55.720 --> 0:03:58.360 up to eighty percent, you're looking at around taking out 0:03:58.360 --> 0:04:01.280 an additional two hundred and twenty thousand dollars in equity 0:04:01.880 --> 0:04:03.760 once you've got your five hundred thousand dollars loan plus 0:04:03.800 --> 0:04:06.760 the two hundred and twenty thousand dollars equity release. Cool. 0:04:07.000 --> 0:04:09.680 So what are the most common things that you see 0:04:09.800 --> 0:04:12.360 people wanting to use their equity for? Because you can 0:04:12.720 --> 0:04:14.920 basically pull it out for whatever. 0:04:15.720 --> 0:04:19.800 True, Yeah and false at the same correct. Some banks 0:04:19.839 --> 0:04:22.560 are going to really care about what it is that 0:04:22.680 --> 0:04:24.960 you say that you're using the equity for. So in 0:04:25.080 --> 0:04:28.640 some cases you can't use it for business purposes. Other 0:04:28.720 --> 0:04:30.880 cases where you might say that you're doing a renovation, 0:04:31.160 --> 0:04:33.640 but you're trying to take out, say four hundred thousand dollars, 0:04:33.920 --> 0:04:36.600 that's probably not going to be a cosmetic renovation, more 0:04:36.640 --> 0:04:39.000 of a structural. They'll allow you to take it out, 0:04:39.040 --> 0:04:41.080 but they're going to want to see you structure it differently, 0:04:41.160 --> 0:04:43.280 so it could be a building loan rather than just 0:04:43.400 --> 0:04:44.600 eight cash outs now. 0:04:44.720 --> 0:04:47.280 Yeah, Yeah, and that's just their managing their risk and 0:04:47.400 --> 0:04:51.040 making sure that everything is hunky doory. Not necessarily, you know, 0:04:51.200 --> 0:04:54.240 because you can't do that thing. They're just like, that's 0:04:54.279 --> 0:04:55.640 a lot of risk for us to take on. 0:04:55.920 --> 0:04:57.400 Yeah, So if you're going to take out four hundred 0:04:57.400 --> 0:05:00.560 thousand dollars for a renovation, they want to see that. Obviously, 0:05:00.640 --> 0:05:02.240 the changes that you're saying are going to be made 0:05:02.320 --> 0:05:04.840 to the property are getting made because they're opening themselves 0:05:04.960 --> 0:05:06.680 up for more risk. So they're going to want to, 0:05:06.800 --> 0:05:09.040 like you said, manage those funds to the builder. Yeah. 0:05:09.080 --> 0:05:11.680 And I would say the most common equity cash out 0:05:11.720 --> 0:05:14.760 that we do as a business is people taking their 0:05:14.800 --> 0:05:17.839 equity out to buy another house. Yes, would you agree 0:05:17.880 --> 0:05:20.880 with that? So you're using that equity as the deposit 0:05:20.960 --> 0:05:22.840 on the next property, so you don't actually have to 0:05:22.920 --> 0:05:26.520 save up again. Anything else. Any other reasons why you 0:05:26.640 --> 0:05:27.720 might get equity out. 0:05:27.680 --> 0:05:31.159 Yeah, purchasing a new car, purchasing a boat, investment, things 0:05:31.240 --> 0:05:31.400 like that. 0:05:31.760 --> 0:05:33.000 So if I go to my bank, can say can 0:05:33.080 --> 0:05:35.520 I use my equity to buy a boat? Are they 0:05:35.680 --> 0:05:36.599 just going to say yes? 0:05:36.920 --> 0:05:39.920 If your ALVIR loan to value ratio allows it, you 0:05:40.000 --> 0:05:42.039 can service that debt, then yes. 0:05:42.200 --> 0:05:42.960 I could have a boat. 0:05:43.040 --> 0:05:43.760 You can have a boat. 0:05:44.080 --> 0:05:46.720 I love the idea. I don't know how to drive 0:05:46.800 --> 0:05:49.440 a boat. As someone who deals with mortgages every day, 0:05:49.480 --> 0:05:52.960 I mean both of us. But you specifically, what are 0:05:53.000 --> 0:05:56.040 your personal feelings about people using their equity if. 0:05:55.960 --> 0:05:58.960 It's for the right reasons. And I say that if 0:05:59.000 --> 0:06:02.280 you're looking to, say, leverage off equity to purchase a 0:06:02.320 --> 0:06:05.120 new property and another investment property and build your portfolio, 0:06:05.480 --> 0:06:07.760 that to me is for the right reasons. Obviously you 0:06:07.800 --> 0:06:09.960 need to speak to the bank or a broker and 0:06:10.120 --> 0:06:12.080 make sure that what you're doing and trying to achieve 0:06:12.240 --> 0:06:14.680 is right for you and it's going to be beneficial. YEA. 0:06:15.120 --> 0:06:17.720 But yes, if you're asking me, I think that I'm 0:06:18.000 --> 0:06:18.440 well for it. 0:06:19.040 --> 0:06:21.359 Yeah, some am, I just not for the wrong things, 0:06:21.440 --> 0:06:24.560 Like I wouldn't. I'm very apprehensive when people say they 0:06:24.600 --> 0:06:27.120 want to take out their equity for a holiday. I'm like, oh, 0:06:27.360 --> 0:06:28.880 you're not going to have anything to show at the 0:06:29.000 --> 0:06:31.560 end of that. Like, you could technically take out equity 0:06:31.640 --> 0:06:34.240 for a holiday, but from my perspective, I think we 0:06:34.320 --> 0:06:37.480 should only be using it to build wealth. So whether 0:06:37.600 --> 0:06:40.840 that is purchasing assets that increase in value, or you're 0:06:41.040 --> 0:06:43.240 using your equity to invest in shares, or you're using 0:06:43.279 --> 0:06:46.080 your equity to get into another investment property. That's probably 0:06:46.120 --> 0:06:49.440 where my personal values lie, and I think yours are 0:06:49.520 --> 0:06:50.200 kind of similar. 0:06:50.320 --> 0:06:52.840 Yeah, there's definitely been times where I've told people that 0:06:52.920 --> 0:06:56.520 I don't think that they should be Yeah, not decline them, 0:06:56.600 --> 0:06:58.039 but just sort of But. 0:06:58.120 --> 0:06:59.920 As a good broker, you kind of are that sound 0:07:00.160 --> 0:07:02.920 board of like, hey, that sounds really great in theory. Personally, 0:07:03.000 --> 0:07:04.840 I don't know if this is the best idea given 0:07:04.960 --> 0:07:08.800 I've looked at your holistic financial situation. But like, that's 0:07:08.839 --> 0:07:10.840 just putting the client first, and then if they decide 0:07:10.840 --> 0:07:12.600 to go through with it, great, I can probably get 0:07:12.600 --> 0:07:15.040 you in the best deal, but we're just flagging that 0:07:15.160 --> 0:07:17.200 this might not be the best financial decision. But it's 0:07:17.240 --> 0:07:18.080 also yours to make. 0:07:18.200 --> 0:07:19.520 Yeah, you've got to weigh it all up. You're going 0:07:19.560 --> 0:07:23.400 to weigh up rate LVR. Is there any lender's Morgan 0:07:23.400 --> 0:07:26.040 insurance getting added? Is your rate increasing because of this? 0:07:26.600 --> 0:07:28.720 It really needs to be beneficial to you at the 0:07:28.840 --> 0:07:30.360 end of the day to follow through with it. 0:07:30.760 --> 0:07:33.320 Yeah. And in your experience, what do you think is 0:07:33.480 --> 0:07:37.000 the number one thing that people misunderstand about equity? 0:07:37.160 --> 0:07:39.920 I would just say how much they haven't And I 0:07:40.000 --> 0:07:42.480 guess the misconception is that you know you might have 0:07:42.520 --> 0:07:45.440 four hundred thousand dollars in equity and therefore access Ye. 0:07:45.520 --> 0:07:49.160 I can access it. Yes, and no, you can access 0:07:49.280 --> 0:07:51.240 it if you were to sell your property. That's going 0:07:51.320 --> 0:07:52.960 to be cold, hard cash. Yes, Because now. 0:07:52.880 --> 0:07:54.760 You've got a nine hundred thousand dollar property and you 0:07:54.800 --> 0:07:56.640 think you have four hundred thousand dollars equity, and you 0:07:56.720 --> 0:07:58.680 sell it for nine hundred thousand, you're gonna have four 0:07:58.760 --> 0:08:01.520 hundred grand in your hand less the agent fees. Yes, 0:08:02.320 --> 0:08:04.960 but like being really clean about it, But that's not 0:08:05.120 --> 0:08:07.080 how it works when you're asking the bank to have 0:08:07.240 --> 0:08:10.200 that money back, because they still require security over your 0:08:10.240 --> 0:08:12.960 property and security that you're going to pay back the loan, 0:08:13.440 --> 0:08:15.960 so they need the deposits still kind of hiding in there. 0:08:16.160 --> 0:08:18.680 Yeah. So people would assume that if I've got it there, 0:08:18.960 --> 0:08:21.240 I can use it. But there's sort of two I 0:08:21.280 --> 0:08:23.720 guess areas that need to be ticked off, which is 0:08:24.240 --> 0:08:27.400 A do we have the equity there? Yes? And B 0:08:27.720 --> 0:08:30.120 can we service what we're trying to take out. If 0:08:30.160 --> 0:08:32.800 you can't service that loan for the additional equity amount 0:08:32.800 --> 0:08:35.319 that you're trying to release, you can't. You can't access it. 0:08:35.480 --> 0:08:38.160 Yeah. Yeah, And so there's a lot of things or 0:08:38.280 --> 0:08:40.079 hoops that you need to jump through that are not 0:08:40.120 --> 0:08:43.719 really hoops. It's like, technically you're borrowing the money, you 0:08:43.800 --> 0:08:44.800 need to be able to pay for it. 0:08:45.880 --> 0:08:48.000 Surely you actually need to make the repayments back on that. 0:08:48.480 --> 0:08:51.400 Damn it. I thought it was free money. So when 0:08:51.440 --> 0:08:54.280 you're looking up properties values on like domain or real 0:08:54.360 --> 0:08:56.680 estate dot com, dot au, you get a low, mid 0:08:56.920 --> 0:09:00.560 and a high value range, and some times I feel 0:09:00.559 --> 0:09:02.400 like that varies a lot, Like I've been looking in 0:09:02.480 --> 0:09:06.040 our area a lot recently and it's like low nine hundred, 0:09:06.200 --> 0:09:09.920 mid one point three, high six billion dollars and you're like, wait, 0:09:10.040 --> 0:09:13.200 what what's going on? How can someone get a rough 0:09:13.400 --> 0:09:16.880 sense or a rough idea of whether they may or 0:09:16.960 --> 0:09:19.640 may not have equity before talking to a broker, because 0:09:19.679 --> 0:09:23.080 like I could google my address and then it says low, medium, high, 0:09:23.920 --> 0:09:26.480 yeah the range no, especially if you haven't bought the 0:09:26.520 --> 0:09:27.360 property recently. 0:09:27.679 --> 0:09:30.560 Yeah. I mean, if you speak to a bank or broker, 0:09:30.640 --> 0:09:33.360 they do have the tools. I guess to there's tools 0:09:33.360 --> 0:09:36.160 that we can jump online and have a better indication, 0:09:36.360 --> 0:09:38.240 like more of a you know, within a one hundred 0:09:38.280 --> 0:09:40.640 thousand dollars range, I guess, or we can actually do 0:09:40.720 --> 0:09:43.480 a valuation, which is either an online valuation depending on 0:09:43.600 --> 0:09:45.600 how much data we have to say that there's been 0:09:46.320 --> 0:09:48.240 recent sales in the area, or if we need to 0:09:48.280 --> 0:09:50.240 get someone out there and actually value the property in 0:09:50.320 --> 0:09:53.160 person because there's been works completed recently, we need a 0:09:53.840 --> 0:09:55.880 true and correct value, then we can do that too. 0:09:56.080 --> 0:09:59.079 That's what we did, so we knew that we didn't 0:09:59.120 --> 0:10:02.959 want It's called it desktop evaluation. And when I was 0:10:03.040 --> 0:10:06.439 going back and refinancing our mortgages and thinking about, Okay, 0:10:06.920 --> 0:10:08.120 what do we want to do in the future. I 0:10:08.160 --> 0:10:11.240 want to know my house value. I specifically requested an 0:10:11.320 --> 0:10:14.240 in person valuation because if you google the house that 0:10:14.320 --> 0:10:16.800 we had, so everybody knows we've just sold it or 0:10:16.880 --> 0:10:20.960 sold it last year. I knew that the information online 0:10:21.080 --> 0:10:23.959 was not reflective of the property that we'd created. So 0:10:24.040 --> 0:10:26.120 I was like, we've done this really cool renovation, Like 0:10:26.120 --> 0:10:28.040 we've actually tipped a couple of hundred grand into this, 0:10:28.200 --> 0:10:31.000 and like, I think it looks slick. I need someone 0:10:31.040 --> 0:10:32.959 to come and look at all of this so that 0:10:33.040 --> 0:10:36.400 we can get an accurate reflection. Yeah, and in some 0:10:36.559 --> 0:10:38.920 cases it might cost you money, but in most cases, 0:10:39.000 --> 0:10:44.120 if you're thinking about going through that process of getting equity, yes, Jack, 0:10:44.160 --> 0:10:46.920 if you order that, that's free, correct, So like through 0:10:46.960 --> 0:10:49.199 the you're broker, they can organize it most of the 0:10:49.280 --> 0:10:53.000 time free. It will depend on your circumstances and like 0:10:53.120 --> 0:10:56.360 sometimes location and whatnot. But I'd say ninety nine percent 0:10:56.440 --> 0:10:59.040 of our clients get that valuation done for free. Yes, 0:10:59.200 --> 0:11:03.280 What things actually we influence a lender valuation? So obviously, 0:11:03.400 --> 0:11:06.679 like if you've renovated your house significantly like I did, 0:11:06.760 --> 0:11:08.439 and by the way, we got a better valuation that 0:11:08.559 --> 0:11:09.200 I was stoked. 0:11:09.240 --> 0:11:11.079 I was like, that was worth it, Yeah, exactly. 0:11:11.320 --> 0:11:14.760 But what other things actually influence that things. 0:11:14.640 --> 0:11:18.360 Will that will influence is obviously how many comparatible sales 0:11:18.400 --> 0:11:20.880 that the bank has got in the area versus, you know, 0:11:21.320 --> 0:11:23.880 a more rural property, is there less on the market 0:11:24.200 --> 0:11:26.679 when was last one sold. That type of thing is 0:11:26.720 --> 0:11:28.679 going to have a big influence on if they can 0:11:28.800 --> 0:11:32.000 just do a straightforward, like you said, online valuation or 0:11:32.000 --> 0:11:34.480 a desktop valuation versus if they actually need to go 0:11:34.520 --> 0:11:37.360 out in person. So that can have a pull on 0:11:37.520 --> 0:11:39.920 what the bank sort of, like I say, spits back 0:11:40.120 --> 0:11:43.560 as a first valuation of the property. But we can 0:11:43.640 --> 0:11:45.840 always sort of push back on that if we don't 0:11:45.840 --> 0:11:47.720 think that that's accurate enough, And like you said, if 0:11:47.720 --> 0:11:49.240 we need to get someone out there, we will. 0:11:49.640 --> 0:11:51.880 Yeah, and we've done it before, and like I don't 0:11:52.000 --> 0:11:55.600 want to set this expectation to hybrid for clarity's sake. 0:11:56.040 --> 0:11:58.559 We've gotten a bank valuation back from a property that 0:11:58.640 --> 0:12:01.079 we weren't happy with, and yeah, we could get them 0:12:01.120 --> 0:12:03.320 to go back out and revalue it. But we've also 0:12:03.400 --> 0:12:06.160 gone to other banks before to be like, don't really 0:12:06.320 --> 0:12:09.400 like your valuation, don't believe it. Our neighbors literally sold 0:12:09.400 --> 0:12:11.040 for two hundred and fifty thousand dollars more, and we 0:12:11.120 --> 0:12:13.240 have the same townhouse wide that feels like you didn't 0:12:13.280 --> 0:12:15.480 take that into consideration. We're just going to go get 0:12:15.520 --> 0:12:16.640 a different bank valuation. 0:12:17.000 --> 0:12:19.599 We do see that quite often. So just because you 0:12:19.640 --> 0:12:22.400 get fun valuation back with one bank, that's not the 0:12:22.920 --> 0:12:25.240 end of it. I guess. We've definitely had where we've 0:12:25.280 --> 0:12:28.200 gone to another bank or two, two to three other banks, 0:12:28.240 --> 0:12:31.199 I guess, and completed valuations and we have seen valuations 0:12:31.280 --> 0:12:33.560 come in even one hundred and fifty thousand dollars more 0:12:33.920 --> 0:12:34.600 than the other one. 0:12:35.040 --> 0:12:37.920 So it get a good broker who's actually going to 0:12:38.000 --> 0:12:40.439 put the effort in as well, because some brokers will 0:12:40.480 --> 0:12:43.040 be like, well, sorry, Jacqueline, that's just what your vowl 0:12:43.120 --> 0:12:46.560 came back as because they're not willing to not shop 0:12:46.600 --> 0:12:49.160 it around but get a second opinion, And like, you 0:12:49.280 --> 0:12:52.240 want a broker like and this is obviously I'm so biased, 0:12:52.240 --> 0:12:54.280 because I obviously love Zella and I love the team, 0:12:54.320 --> 0:12:55.880 and I think that we do a really good job. 0:12:56.000 --> 0:12:59.680 But you want a broker that is on your team. 0:13:00.120 --> 0:13:01.920 Like if you've said to your broker, look, I really 0:13:01.920 --> 0:13:03.240 want to do this right now, and it's two hundred 0:13:03.240 --> 0:13:05.319 and fifty grand, and then you know the vowels come 0:13:05.440 --> 0:13:08.600 back and told you that you probably can borrow one 0:13:08.600 --> 0:13:10.800 point eighty. Like a lot of brokers will be like, well, 0:13:10.880 --> 0:13:13.400 that's just what you can borrow, whereas we'll be like, nah, 0:13:13.440 --> 0:13:15.640 I reckon. We could get another valuation that would tip 0:13:15.720 --> 0:13:17.679 it over and like work out what goes on here 0:13:17.760 --> 0:13:21.120 and here, Like it becomes like a game twice like 0:13:21.320 --> 0:13:23.560 and I don't I mean that in the most professional sense, 0:13:24.840 --> 0:13:28.000 but sorry, there's a like there's it's like a game. 0:13:28.080 --> 0:13:30.559 You've just told me that it's worth this, and like, 0:13:30.640 --> 0:13:33.560 you know, if I genuinely believe it's more or I've done. 0:13:33.640 --> 0:13:36.200 We're not silly. We work with property every day. Like again, 0:13:36.240 --> 0:13:38.400 if you saw your neighbor sell for more, or like 0:13:38.760 --> 0:13:41.880 three townhouses that you think have similar specs have gone 0:13:41.920 --> 0:13:45.120 fifty grand over that, I want a second opinion. Yeah, 0:13:45.320 --> 0:13:46.040 it's like a doctor. 0:13:46.320 --> 0:13:48.319 Make it work, but it's going to get us the 0:13:48.360 --> 0:13:49.120 outcome that we want. 0:13:49.320 --> 0:13:51.080 And I want my clients to be like, yeah, Jack 0:13:51.240 --> 0:13:54.000 was the best, or working at Zella was the best. Yeah, 0:13:54.080 --> 0:13:58.000 because we tried really hard for that reputation. Not gonna lie. 0:13:59.080 --> 0:14:01.240 So Jack, let's go back to that nine hundred thousand 0:14:01.280 --> 0:14:03.079 dollar example. Let's say I have a house and I 0:14:03.120 --> 0:14:05.920 reckon it's worth about nine hundred grand and on my 0:14:06.040 --> 0:14:09.400 loan there's five hundred thousand dollars still sitting there. If 0:14:09.440 --> 0:14:12.400 I came to you, ad Zella, what other things that 0:14:12.720 --> 0:14:14.240 you were going to look at to see if I 0:14:14.280 --> 0:14:17.200 can actually borrow the equity? Like, what are you going 0:14:17.280 --> 0:14:19.400 to go through? How's that conversation going to go? 0:14:19.920 --> 0:14:22.000 Yes, So we're going to obviously look at what the 0:14:22.040 --> 0:14:24.880 property value roughly is, and like you said, we can 0:14:25.040 --> 0:14:27.000 We're not stuck with one lender. We can look at 0:14:27.080 --> 0:14:29.040 multiple lenders and see what they come back with. But 0:14:29.120 --> 0:14:31.320 we're going to see as a rough amount how much 0:14:31.360 --> 0:14:32.080 equity you do have. 0:14:32.360 --> 0:14:34.640 If you're one of our bdms and you're listening to 0:14:34.720 --> 0:14:37.760 this episode because you're like, wow, Zella is on an episode, 0:14:38.160 --> 0:14:39.920 just turn it off and pretend that you never heard 0:14:39.960 --> 0:14:41.560 that we would shop it around. We would not do 0:14:41.720 --> 0:14:44.040 that too, you guys. We are layer our one and only, 0:14:44.160 --> 0:14:46.440 one and only. We would never play you off against 0:14:46.480 --> 0:14:48.400 each other. That would just be kind of low key 0:14:48.520 --> 0:14:50.720 rude and in the best interest of the client. 0:14:50.880 --> 0:14:54.080 Yeah, but we're going to look at obviously equity as 0:14:54.080 --> 0:14:56.840 a number one. We're going to see which different banks 0:14:56.880 --> 0:14:58.680 are going to allow us to go up to which 0:14:58.760 --> 0:15:00.760 type of LVR, So thanks are going to have a 0:15:01.400 --> 0:15:03.440 US cut it off at seventy percent of YA, some 0:15:03.600 --> 0:15:06.040 will be at eighty percent, and some will allow us 0:15:06.080 --> 0:15:08.720 to go above eighty percent. But we're now in ALUMI space, 0:15:08.840 --> 0:15:10.840 so lend us Morgan insurance. How much is that going 0:15:10.880 --> 0:15:12.680 to look like if we do go above eighty percent? 0:15:13.160 --> 0:15:16.000 And also the third one obviously borrowing capacity, So yes, 0:15:16.160 --> 0:15:17.920 we need to make sure that what we're looking to 0:15:18.080 --> 0:15:20.360 take out that we can actually service that and what 0:15:20.520 --> 0:15:21.000 that looks like. 0:15:21.200 --> 0:15:23.000 Yeah, and the bank's also going to be like, hey, Jack, 0:15:23.120 --> 0:15:26.120 why do you want to access your money and assess 0:15:26.200 --> 0:15:29.240 that as well? And I think that sometimes it sounds 0:15:29.360 --> 0:15:32.160 really really cool, and I just want to dispel this 0:15:32.880 --> 0:15:34.840 for a hot second, because, like I mean, we're in 0:15:34.880 --> 0:15:36.880 the middle of a cost of living crisis, so everyone's 0:15:36.920 --> 0:15:38.360 trying to work out how to get more money. 0:15:38.720 --> 0:15:39.560 What that looks like? 0:15:39.920 --> 0:15:41.240 You know, we just need a little bit of like 0:15:41.360 --> 0:15:43.200 wiggle room, and you might go, we could probably use 0:15:43.240 --> 0:15:47.200 the equity, but we might assess your incomes right now, 0:15:48.080 --> 0:15:51.720 and unfortunately you can't access that equity because you can't 0:15:51.720 --> 0:15:54.160 pay back the additional loan because you're already living like 0:15:54.600 --> 0:15:57.120 paycheck to paycheck in a way, and I find that 0:15:57.240 --> 0:15:59.760 really disheartening for the client. Yeah, so like talk to 0:15:59.840 --> 0:16:01.560 us still because we want to make a plan and 0:16:01.760 --> 0:16:03.880 like every single like Zella Broker is going to make 0:16:03.920 --> 0:16:05.320 sure that you have a budget, you have a cash loo, 0:16:05.360 --> 0:16:07.760 and you do all of that stuff. But I think 0:16:07.880 --> 0:16:10.840 also to set clean expectations, you can't just pull it 0:16:10.880 --> 0:16:13.160 out and be like, oh, this is wiggle room. Yeah, 0:16:13.320 --> 0:16:16.280 especially if you're already strapped for cash because your loan 0:16:16.400 --> 0:16:18.240 is going to increase and they might go well on 0:16:18.320 --> 0:16:22.320 your incomes, you can't pay back reasonably and therefore no 0:16:22.800 --> 0:16:24.800 and that can be really disappointing if you've kind of 0:16:24.920 --> 0:16:27.520 unlocked that idea in your head. I been like, this 0:16:27.720 --> 0:16:29.600 is the thing that's going to give us some breathing room, 0:16:30.560 --> 0:16:31.040 same as. 0:16:31.000 --> 0:16:34.800 It's not changing employer. Yeah, so obviously you might have 0:16:34.880 --> 0:16:37.480 equity available you want to pull it out. If you've 0:16:37.560 --> 0:16:40.200 changed employer where you've gone to say maybe casual, you 0:16:40.320 --> 0:16:42.280 might need to stay at that job for six months 0:16:42.320 --> 0:16:44.720 before you can access it. Doesn't just mean that because 0:16:44.760 --> 0:16:47.480 you are currently employed that you have the ability to 0:16:47.800 --> 0:16:48.640 pull out the equity. 0:16:49.000 --> 0:16:52.720 Yeah. Now you've worked for Zella for years and we're 0:16:52.720 --> 0:16:55.760 really lucky. We have thousands of clients, and I would 0:16:55.800 --> 0:16:59.000 say that you've seen thousands of applications go through. What 0:16:59.240 --> 0:17:02.040 things make you go, m this is going to be 0:17:02.080 --> 0:17:03.560 an issue when you see it pop up. 0:17:03.720 --> 0:17:07.119 Going back to I guess employment type starting LBR, so 0:17:07.240 --> 0:17:08.960 where you're already currently at and where you're trying to 0:17:09.000 --> 0:17:14.280 get to, recently left your employer so recently quit or 0:17:14.480 --> 0:17:16.320 again looking for new employment. 0:17:16.200 --> 0:17:19.120 I would say maternity leaf. I think a lot of people, 0:17:19.200 --> 0:17:20.760 and this is not a bad thing, but I think 0:17:20.760 --> 0:17:22.320 a lot of people are like, well, I'm on matt leave, 0:17:22.359 --> 0:17:24.800 I still have an income, i still have solid employment. 0:17:25.640 --> 0:17:28.080 That's not how banks see it. No, and we're not 0:17:28.160 --> 0:17:30.679 saying that that's fair. That's just the game that we're playing. 0:17:31.000 --> 0:17:33.840 If you're on maternity leave, very often we have to say, 0:17:34.760 --> 0:17:36.919 let's wait until you're back in your job and then 0:17:37.000 --> 0:17:39.800 we can work it out because the banks are very conservative. 0:17:39.840 --> 0:17:41.879 It makes me very frustrated, but the banks are very 0:17:41.960 --> 0:17:42.920 conservative about it. 0:17:43.080 --> 0:17:46.440 Yeah. It's not a cold, hard no, No, it's just 0:17:46.480 --> 0:17:47.600 obviously a little bit trickier. 0:17:47.840 --> 0:17:50.960 Yeah, and it definitely limits options I would say, say, 0:17:51.160 --> 0:17:53.480 you and I are looking at my loan and we 0:17:53.760 --> 0:17:57.560 can access equity. That looks really good, But I've got 0:17:57.640 --> 0:18:01.320 forty thousand dollars worth of personal consumer debt. Can I 0:18:01.480 --> 0:18:03.800 just roll that into my homeland? I feel like that's 0:18:03.800 --> 0:18:04.440