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Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations

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Speaker 1: woman and I'm here to acknowledge country t Glenn Young

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Speaker 1: Ganya nianar Kaka yah y and beIN Ahaka nian Our

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Speaker 1: gay In Mbini yakarum Jar dominyamiga Umagahawaka Woman Damon Imlan

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Speaker 1: Bumba ban Gadabomba in and now in wakah ghan On

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Speaker 1: yak rum Jar water Nataa. Hello, beautiful friends, we gather

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Speaker 1: on the lands of the Aboriginal people. We thank, acknowledge

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Speaker 1: and respect the Abiginal people's land that we're gathering on today.

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Speaker 1: Take pleasure in all the land and respect all that

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Speaker 1: you see. She's on the Money podcast acknowledges culture, country,

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Speaker 1: community and connections, bringing you the tools, knowledge and resources

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Speaker 1: for you to thrive.

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Speaker 2: She's on the Money.

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Speaker 3: She's on the Money.

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Speaker 4: Hello and welcome to She's on the Money. The podcast

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Speaker 4: that's all about making your financial dreams become a reality.

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Speaker 4: And for a lot of us, that's about owning our

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Speaker 4: own home. And I know a lot of you are

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Speaker 4: feeling really unsure about what buying a home even looks

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Speaker 4: like right now. The rules literally keep changing and it's

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Speaker 4: hard to know if you're doing the right thing, and

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Speaker 4: you've probably got so many questions, which is like low

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Speaker 4: key kind of helpful. And I feel like we're in

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Speaker 4: the right place. And that's why we are here today,

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Speaker 4: not just me. We are here today because you're in

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Speaker 4: very good hands with this topic. I'm Victoria Devine and

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Speaker 4: I happen to own the mortgage broken company, Zella Money,

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Speaker 4: and I am joined by one of our mortgage queens,

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Speaker 4: Miss Jacqueline Walsh. Welcome back to the show, Jack.

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Speaker 3: Thank you.

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Speaker 4: I am very excited for this because your episodes honestly

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Speaker 4: pop off like I don't know what you're doing. Are

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Speaker 4: you just sending it to your mum and she's listening

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Speaker 4: to it over and over and over again. Because they

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Speaker 4: are very popular, we obviously adore having you in the studio,

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Speaker 4: and so many of our community are currently on the

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Speaker 4: journey or have just set the goal of buying their

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Speaker 4: first home in twenty twenty six or even twenty twenty seven,

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Speaker 4: and they're on that trajectory of like, well, what does

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Speaker 4: it look like to buy my first home? Or maybe

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Speaker 4: they're wanting to add to their portfolio and investment property

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Speaker 4: so they have a lot of questions for you. Are

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Speaker 4: you ready? I hope?

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Speaker 5: So?

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Speaker 1: All right?

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Speaker 4: So I went out to the community. I said, Jack's back,

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Speaker 4: she's coming on the show. What questions have you got?

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Speaker 4: And this time we did get a few that we've

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Speaker 4: covered on previous episodes with you. So I want a

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Speaker 4: flag that I will put all of the episodes that

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Speaker 4: you've been in in the show notes to make sure

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Speaker 4: that everybody can listen to those, because we don't want

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Speaker 4: to just create content that doubles up. I mean, it

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Speaker 4: would be more efficient, wouldn't it If we just like

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Speaker 4: keep pumping out episodes with the same questions, we do

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Speaker 4: so much less work. And we basically did a whole

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Speaker 4: refinancing masterclass. I'd say historically that was the most recent

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Speaker 4: one that we dropped. Obviously that will be in their

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Speaker 4: show notes too, for those of you who want to

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Speaker 4: know all about refinancing. Now, Jack, you are a very

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Speaker 4: busy woman, and since last year, I would say that

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Speaker 4: the mortgage breaking world has changed significantly. Like we yell

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Speaker 4: about it a lot in the office. Yea, maybe we swear,

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Speaker 4: but like we're very classy women, we would never So

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Speaker 4: along with getting to the community's questions, I just want

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Speaker 4: to speak about the changes that you've been seeing as well,

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Speaker 4: just so our community can be really prepared. So let's

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Speaker 4: start with I guess the biggest headline over the last

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Speaker 4: twelve months, and that is spicy the government's five percent

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Speaker 4: deposit rule. Yes, people have questions, people have opinions, people

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Speaker 4: are nervous. What's changed.

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Speaker 2: So since October one, twenty twenty five, the government has

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Speaker 2: scrapped the income threshold, which is a major change, meaning

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Speaker 2: that anyone that's purchasing their first property now can go

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Speaker 2: through this scheme. Obviously, the normal rules apply being an

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Speaker 2: austraiance is and or permanent resident.

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Speaker 3: You still need to hold the minimum of five percent.

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Speaker 2: Of the purchase price, but it just means that more

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Speaker 2: people can go into that scheme now with having a

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Speaker 2: little deposit and avoiding the lenders more insurance. So it

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Speaker 2: is a big, big, big change meaning a lot more

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Speaker 2: people are eligible for this. And another big change I

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Speaker 2: guess would be the property price cap threshold. So Victoria's

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Speaker 2: gone from eight hundred to nine hundred, whereas the biggest

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Speaker 2: jumps probably in Sydney at nine hundred to one point

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Speaker 2: five MILS. So that was that was still like I

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Speaker 2: thought that was diaboling, but it probably really needed to

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Speaker 2: happen a long time ago.

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Speaker 4: And I would argue that Melbourne didn't get enough agreed,

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Speaker 4: Like we look at the Melbourne property prices and what

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Speaker 4: our clients are buying for and how we're trying to

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Speaker 4: make it happen, and like honestly in the nicest, most

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Speaker 4: relatable way, because I know that a lot of people

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Speaker 4: are listening to this and they're like, Victoria, I can't

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Speaker 4: service the nine hundred thousand dollar mortgage to begin with.

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Speaker 4: Like when we look at the average, the average property

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Speaker 4: price in Melbourne is more than a million dollars, and

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Speaker 4: you're saying that the average isn't the first home buyers, Like,

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Speaker 4: what's that about? And I think there's a lot of

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Speaker 4: fear that has come up around this, and as of

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Speaker 4: October that popped up. And obviously it was announced before

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Speaker 4: it happened, and we had all of our clients asking

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Speaker 4: a million questions and then all of our clients seeing

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Speaker 4: it the way that we saw it, I know, so

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Speaker 4: we saw it as great. For a short period of time,

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Speaker 4: probably the month or two after this initiative gets implemented,

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Speaker 4: a whole heap of first home buyers are going to

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Speaker 4: enter the market with five percent and be able to

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Speaker 4: buy properties that are on par with what the price

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Speaker 4: of them was. Now everyone settled in, they've worked out

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Speaker 4: what they're five percent is. They're competing with the people

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Speaker 4: that had twenty percent, and what that's doing is just

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Speaker 4: driving house prices up. And that's why I said, oh,

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Speaker 4: people have opinions. We are one of those peoples, and

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Speaker 4: I think it's making people really nervous and there's I

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Speaker 4: think still a lot of fear around what this particular

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Speaker 4: scheme means for you know, you as a first home

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Speaker 4: buyer moving into the market in twenty twenty six, or

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Speaker 4: you saving your first deposit now going well by twenty

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Speaker 4: twenty seven, is this going to be completely unobtainable? Do

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Speaker 4: you think that this fear is really valid or not valid?

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Speaker 3: There is a lot of fear out there, definitely that's undeniable.

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Speaker 2: We have, you know, clients that are worried that they're

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Speaker 2: going to miss out on properties or worried about being

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Speaker 2: outbit at auctions, which it is happening. Like to eliminate

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Speaker 2: the fear, it's going to come down to getting in

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Speaker 2: touch with your bank or broker as soon as possible

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Speaker 2: and being on the same page, really like, are we

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Speaker 2: looking at obtaining a pre approval for you absolute maximum,

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Speaker 2: knowing that we don't really want to go up to that,

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Speaker 2: but at least you, you know, if you find the property,

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Speaker 2: you can go in a little bit higher and we

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Speaker 2: don't need to go that back and forth and you know,

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Speaker 2: take longer and getting back to you. Or are you

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Speaker 2: wanting to stick with a budget just going at one

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Speaker 2: purchase price and then just call it a day.

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Speaker 3: If you're going to put a I.

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Speaker 2: Guess your own budget on that purchase price, you probably

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Speaker 2: really need to be looking at a lower purchase price

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Speaker 2: when you're doing your searches, just so it is giving

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Speaker 2: you that little bit of a wiggle room that you

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Speaker 2: can go in a little bit over what the advertised

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Speaker 2: prices are because there is so much competitiveness.

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Speaker 4: Now, Yeah, and I'm not saying it's right. There's a

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Speaker 4: lot of conversation I'd like to have about the real

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Speaker 4: estate industry as a whole, and we can have that

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Speaker 4: conversation another time, because I've got thoughts and feelings that

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Speaker 4: would make a lot of people very mad. But I

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Speaker 4: also think and I've said this on the podcast before.

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Speaker 4: One of my favorite tips when looking for your first

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Speaker 4: home is to stop looking for your first home and

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Speaker 4: start clicking on the soul tab on domain on a

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Speaker 4: real estate because if you start looking for your first

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Speaker 4: home one we get an emotional connection to these properties

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Speaker 4: really quickly. Really might see it's listed between nine hundred

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Speaker 4: or let's you know, use the scheme barriers, maybe listed

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Speaker 4: between seven fifteen and eight to fifteen, and you go, well,

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Speaker 4: I could absolutely afford that even if I went top

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Speaker 4: and I go eight point fifty. The reality is that

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Speaker 4: property is probably going to go over, not because it's

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Speaker 4: not valued at that amount, but because the competition for

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Speaker 4: that property is so fierce and there are other first

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Speaker 4: home buyers that are willing to use their whole nine

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Speaker 4: hundred thousand dollars in Melbourne or their whole one point

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Speaker 4: five million dollars in Sydney, and that's where your competition's

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Speaker 4: going to come from, because they're like, well, I can

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Speaker 4: outbid them, and they do and that forces competition. So there,

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Speaker 4: I mean, there are definitely cases of real estate agents

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Speaker 4: under quoting things. But the best thing you can do

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Speaker 4: before you even start looking for your dream home is

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Speaker 4: to go to the real estate dot com dot au

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Speaker 4: website and click on sold same with domain and just

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Speaker 4: look at what are these properties actually going for because

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Speaker 4: you'll see the listed sale prices and then you can

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Speaker 4: gain an expectation of like, Okay, so I thought I

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Speaker 4: could afford a three bedroom filler and it actually looks

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Speaker 4: like they're selling for X. What does that look like?

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Speaker 4: And set your budget expectation from that, and then we

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Speaker 4: go shopping on the flip side, so that when you

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Speaker 4: start seeing properties listed, you go eight fifty money win,

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Speaker 4: like that's going to work for my personal situation. You

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Speaker 4: can go actually in that area, I'm watching all of

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Speaker 4: these other properties go for one hundred grand overver, so

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Speaker 4: you can kind of set your own expectations because I'm

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Speaker 4: finding that a lot of people who are not doing that.

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Speaker 4: It's so exciting, it really is. You're going to auctions

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Speaker 4: like you're putting offers on houses and it happens again

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Speaker 4: and again and again, and you get outbit and you

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Speaker 4: feel like it's fruitless. We actually needed to set more

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Speaker 4: realistic expectations from the start, and that hurts to hear

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Speaker 4: because you're like, well, it should sell for between what

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Speaker 4: it's listed for that is just not the reality of

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Speaker 4: the industry at this point in time, and that is

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Speaker 4: heartbreaking and frustrating. But if you want to get into

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Speaker 4: the market, that's the advice that you need.

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Speaker 3: Of course.

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Speaker 4: Yeah, so we need to be a little bit blunt

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Speaker 4: and be like, cool, don't look at that, look at this,

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Speaker 4: or hey, set your expectation here, and if we go over,

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Speaker 4: you've got a little bit of wiggle room money win

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Speaker 4: exactly because I know as well clients who have been like, oh, yeah,

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Speaker 4: I stopped bidding because we'd set this personal budget of

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Speaker 4: eight twenty five and we stopped there, and you go,

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Speaker 4: you were pre approved up to eight fifty. Like you

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Speaker 4: totally had had it, you had that wiggle room. You

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Speaker 4: didn't want to do it. I totally get that, But

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Speaker 4: now you're regretting it because you're coming back to me

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Speaker 4: and going the market's moved again, it's gone up again.

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Speaker 4: Why didn't I just offer eight fifty? And it can

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Speaker 4: be really hard, but that's where you need a good

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Speaker 4: relationship with your mortgage broker, so you can have these

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Speaker 4: conversations of like is that reasonable? Should I go over?

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Speaker 4: Should I not? What does this look like? Because I

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Speaker 4: think so many of us, and this is me ranting

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Speaker 4: about property. I'm sorry, I think so many of us

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Speaker 4: get stuck on what that listing price is and go, well,

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Speaker 4: the top end was eight fifty. It can't be worth

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Speaker 4: more than that, and market determines what it's worth, not

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Speaker 4: the real estate's valuation. Unfortunately, So back to the five

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Speaker 4: percent rule. Because I could talk about real estate or

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Speaker 4: dag chat. I know you could too. What does that

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Speaker 4: mean for everything else that's available for first home buyers? Like,

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Speaker 4: can you stack the five percent rule with like the

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Speaker 4: first home owners grants? Do they cancel each other out?

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Speaker 4: How does it all fit together? Like a puzzle?

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Speaker 3: You can use them all together.

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Speaker 2: So, for instance, you could be using the first Home

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Speaker 2: Super Saver scheme with the five percent deposit scheme and

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Speaker 2: even obtain the first home owners grant.

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Speaker 3: So that's three stacked together.

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Speaker 4: That's obviously at Home super Saviors scheme. Do it?

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Speaker 5: Yes?

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Speaker 4: Oh, I can't give advice, No, consider whether it is

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Speaker 4: relevant for your seconds.

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Speaker 3: You could stack all those together.

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Speaker 2: Obviously, that particular scenario would be for an unoccupied purchase

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Speaker 2: that you're going to be living in, and it would

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Speaker 2: need to be a newly built dwelling or an off

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Speaker 2: the plan purchase to obtain that first Home owners grant.

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Speaker 2: But the most common woman that we would see would

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Speaker 2: be the first Home Guarantee scheme, which is now called

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Speaker 2: the five percent Deposit Scheme, along with the First Home

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Speaker 2: super Saviors scheme.

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Speaker 3: So yes, you can stack them. I love that.

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Speaker 4: So we're like not just habit stacking, we are mortgage

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Speaker 4: like scheme stack here, which is very sexy.

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Speaker 3: Are the Merrier?

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Speaker 4: Yeah, you were on the pod last year? What else

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Speaker 4: has changed since you were last in the studio. Because

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Speaker 4: you're the one dealing with the banks every day, I

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Speaker 4: just get to sit and listen to you argue on

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Speaker 4: the phone, which is it's really I mean, I do

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Speaker 4: have to get involved when like they're not listening and

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Speaker 4: agree hell those no no no no no, and they go,

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Speaker 4: oh shit, she's got a title Like it's not even

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Speaker 4: because I know more I don't. But you see this

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Speaker 4: stuff every single day, and it's the stuff that most

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Speaker 4: people don't see. What changes are you seeing within the

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Speaker 4: banks themselves?

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Speaker 3: I feel like this deserves an iyrol And I feel like.

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Speaker 4: You probably the banks are going to come for you.

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Speaker 2: You probably not are going to say I stacked this

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Speaker 2: banks turnaround times. This is infuriating, furiating and is at

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Speaker 2: an all time high, and it's just crazy at the moment.

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Speaker 2: So yeah, that's probably been the biggest change i'd say

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Speaker 2: in the last few months around banks ten around times.

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Speaker 2: Some banks are at sixteen to twenty one days.

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Speaker 4: That's astronomical.

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Speaker 3: Yeah, unheard of actually for an assessment from.

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Speaker 4: My perspective, unacceptable as well.

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Speaker 2: And you've got to think as well, like that's the

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Speaker 2: banks turnaround times. The broker also needs time to you know,

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Speaker 2: package that application, get all your documents, submit it, like,

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Speaker 2: get it ready for assessment, and so that's not the

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Speaker 2: work we do. Yeah, so that's like that's the banks

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Speaker 2: turn around times plus your broker's turn around times as well.

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Speaker 3: So they are through the roof at the moment.

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Speaker 2: I do see that they are trying to combat that

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Speaker 2: turnaround time with now the changes of bringing some banks

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Speaker 2: bringing in the auto assessed pre approvals.

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Speaker 4: So I don't like that. Yeah, my personally to hire

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Speaker 4: more staff to do more thorough reviews.

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Speaker 2: I don't know if you heard me in the office

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Speaker 2: this week, but I called a few banks and said,

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Speaker 2: but why don't you just hire more stuff like, just

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Speaker 2: so that you can.

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Speaker 4: Actually do the work in the time frame that you promised,

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Speaker 4: because these turnaround times. Just having a bitch about our

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Speaker 4: own industry, these turnaround times are not the turnaround times

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Speaker 4: they promise us, No, they're the reality. They will say, oh, yeah,

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Speaker 4: like we have a history of getting back to clients

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Speaker 4: within the first seven days, and you go, that's so sexy.

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Speaker 4: No worries, I'll tell my client that. And then the

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Speaker 4: reality is it pushes out to sixteen days, which then

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Speaker 4: makes us look incompetent because we're going back to clients

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Speaker 4: being like, hey, we know this should be coming through

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Speaker 4: tomorrow based on the bank's timeframes, but we're not seeing

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Speaker 4: this happen with other clients, so we want to set

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Speaker 4: your expectations here and they're like, oh, no worries. Then

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Speaker 4: when it doesn't happen, they're like, but the bank said.

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Speaker 4: And I think so many of us get hung up

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Speaker 4: on the fact that, well, banks, they're big authorities, why

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Speaker 4: would they.

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Speaker 2: Lie, And we're the middleman, And unfortunately they make the

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Speaker 2: rules and they can change those turnaround times every single day.

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Speaker 2: So it's based on the influx of applications to be

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Speaker 2: coming in. So one day, it could be four days.

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Speaker 2: The next day it could be sixteen days.

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Speaker 4: October last year, when that five percent deposits game came in,

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Speaker 4: I feel like every first home buyer and their dog

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Speaker 4: wants to get their pre approval sorted asap, which is

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Speaker 4: meant that people who were on their journey of saving

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Speaker 4: for their first home and they were saving and they

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Speaker 4: maybe were trying to get to ten percent to use LMI,

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Speaker 4: or maybe they were trying to get to their twenty percent,

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Speaker 4: who thought, oh, this is probably still another twelve to

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Speaker 4: eighteen months off, Like we've got heaps of time. That

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Speaker 4: actually changed for them and they're in the market as

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Speaker 4: of today because they already have their five percent, they

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Speaker 4: are now competing with the other clients that we have

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Speaker 4: who have twenty percent deposits. And that doesn't change anything

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Speaker 4: about you know, them being in a better off or

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Speaker 4: worse off position, but it doubles our applications, which as

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Speaker 4: a business fantastic. We want more clients, We want more

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Speaker 4: of you pre approved. But that means the banks are

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Speaker 4: overloaded with people going, oh, I actually you know can

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Speaker 4: get this early. Yes, And so now all of those

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Speaker 4: people who can get in early are now overloading the banks.

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Speaker 2: Yes, it's not even just an influx from the five

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Speaker 2: percent scheme. It's also just an influx for clients looking

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Speaker 2: at preapproval even outside of that scheme, just the way

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Speaker 2: that the market is going at the moment. So it's

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Speaker 2: just the spring is always notorious for, you know, the

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Speaker 2: busiest time of the year with houses going on the market.

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Speaker 2: So it just happens that they've started this on October

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Speaker 2: first last year and now it's rolling into the business perience.

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Speaker 4: I was okey, like, are you guys kidding? Like do

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Speaker 4: this at the start of winter. You and I both know,

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Speaker 4: just do it again, and that would have made sense.

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Speaker 4: I don't think anyone would have been like, oh, that

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Speaker 4: timing doesn't make sense because it's a new financial year,

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Speaker 4: new financial policy. Like we would have eaten that up

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Speaker 4: and believed it in a time that's a little bit

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Speaker 4: more quiet. Yeah, you are setting everyone up for failure.

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Speaker 2: Government to combat this, I would be saying to speak

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Speaker 2: with your broker around what it is that you're trying

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Speaker 2: to achieve, because yes, there's going to be you know,

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Speaker 2: some banks that are grid locked, and some banks have

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Speaker 2: a longer turnaround time. But if you're not planning on

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Speaker 2: going to an auction, or you're an eighty percent land

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Speaker 2: and you've got a twenty percent depositor, whatever your scenario is,

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Speaker 2: we can go through different banks that still like some

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Speaker 2: banks still have like a four hour turnaround, but that's

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Speaker 2: not within the scheme. So it just comes down to

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Speaker 2: your personal scenario and where we can place you. But

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Speaker 2: that's why, more so than ever, a broker is going

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Speaker 2: to be your best bet to go to because they're

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Speaker 2: the ones that can see across the board and sort

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Speaker 2: of pinpoint and work out where to park your application.

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Speaker 2: Whereas if you walk into a bank, it's sorry, we're

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Speaker 2: at sixteen days. Therefore, that auction that you wanted to

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Speaker 2: go to next.

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Speaker 3: Week going to with pre not going to Had you

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Speaker 3: gone to a broker, we could have gone through option A,

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Speaker 3: B and C.

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Speaker 2: This is our first option. Our fullback option is now

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Speaker 2: option B. Let's get you the pre approval in place

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Speaker 2: to go to that auction next week, and then let's

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Speaker 2: talk if you're successful.

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Speaker 4: Yeah, and other banks aren't going to like carrying this,

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Speaker 4: but this is just the way that we put our

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Speaker 4: clients in the best possible position, right, and the best

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Speaker 4: possible position for you as a client is to come

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Speaker 4: to us before you're planning to go to an auction,

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Speaker 4: before you find your dream home. Maybe you've got your

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Speaker 4: deposit and you're like, oh, well, i'll just see how

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Speaker 4: I go and I'll talk to a broker if something

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Speaker 4: comes up, Like at that point, if you've started shopping,

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Speaker 4: see a broker. Already get your pre approval in the bank,

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Speaker 4: so that if your dream property does come up and

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Speaker 4: they're like, oh, auction Saturday, you're prepared. But the thing

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Speaker 4: that we do as well is and I want to

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Speaker 4: say unfortunately, but like fortunately, like we thrive under pressure,

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Speaker 4: but also we know that you stress under pressure, so

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Speaker 4: like we don't want this situation. But we have so

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Speaker 4: many clients who come to us and go, I need

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Speaker 4: an urgent appointment with a mortgage broker because I found

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Speaker 4: my dream house and it's going to auction on Saturday.

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Speaker 4: And that's where you jack. You know, you're talking about

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Speaker 4: option A, B and C. What that might look like

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Speaker 4: is your priority bank is Combank, and you might say

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Speaker 4: I really want to be with Combank. That you and

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Speaker 4: I go great, their turnaround time right now is completely

394
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Speaker 4: pushed out. There's absolutely no chance that we can get

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Speaker 4: an application in and pre approval for you to be

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Speaker 4: comfortable to go to auction. Here's this I don't know

397
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Speaker 4: Second and Bank. Yes, their interest rate is higher, but

398
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Speaker 4: all of their assessment criteria is very similar to Combank.

399
00:19:06,760 --> 00:19:08,920
Speaker 4: They have a four hour turnaround. We can get you

400
00:19:09,000 --> 00:19:11,879
Speaker 4: that pre approval, you can go shopping. We know that

401
00:19:12,160 --> 00:19:15,080
Speaker 4: if you are successful at that auction, this Second Rate

402
00:19:15,160 --> 00:19:17,600
Speaker 4: Bank is going to give you the loan. But during

403
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Speaker 4: that settlement period and that period of time between you

404
00:19:21,400 --> 00:19:23,760
Speaker 4: and actually getting the keys and having to pay the money,

405
00:19:24,040 --> 00:19:27,399
Speaker 4: we'll go back to Combank. We will process that in

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00:19:27,480 --> 00:19:29,640
Speaker 4: a longer period of time, will get you the loan

407
00:19:29,720 --> 00:19:33,080
Speaker 4: that you want and everything will be shiny. But one

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Speaker 4: of the things that I just I cannot stress enough

409
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Speaker 4: is please do not ever go to auction, especially in

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Speaker 4: such a changing market and changing world in finance and

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Speaker 4: bid without pre approval.

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Speaker 2: Now, you absolutely have to have a pre approval if

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Speaker 2: you're even considering going to auction. Yeah, but that's why

414
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Speaker 2: I always say the second that you're even thinking, like

415
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Speaker 2: I've said this before, the second that you're even thinking

416
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Speaker 2: about purchasing, get in touch with a broker, because if

417
00:19:58,880 --> 00:20:01,919
Speaker 2: you have time on your side. It eliminates the stress

418
00:20:02,000 --> 00:20:04,280
Speaker 2: on both ends, Like you don't need to be following

419
00:20:04,359 --> 00:20:06,359
Speaker 2: us up because your stress, We don't need to be

420
00:20:06,480 --> 00:20:09,040
Speaker 2: chasing you up for documents. We have that leeway for

421
00:20:09,119 --> 00:20:11,080
Speaker 2: it to things to take a little bit longer, and

422
00:20:11,240 --> 00:20:14,000
Speaker 2: with the ever changing market of the turnaround times, that's

423
00:20:14,040 --> 00:20:15,919
Speaker 2: not going to be an issue if we are ready

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Speaker 2: to go with enough time.

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Speaker 4: So exactly, yeah, exactly. So just if any banks were

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Speaker 4: listening to that, and you've seen us withdraw applications, it's

427
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Speaker 4: just it's not you. It's anyway, Jack, I want to

428
00:20:30,880 --> 00:20:33,639
Speaker 4: take a quick break so that we don't keep us

429
00:20:33,680 --> 00:20:37,160
Speaker 4: looking about banks, and then we can get into things

430
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Speaker 4: like using equity, what a Garran Torelowan is going to

431
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Speaker 4: look like? And I really want to know the tips

432
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Speaker 4: that you have to reduce the life of a mortgage,

433
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Speaker 4: so guys don't go anywhere. All right, Jack, we are back.

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Speaker 4: Let's talk about equity, because this came up more than

435
00:20:55,760 --> 00:20:58,240
Speaker 4: anything else. I feel like it can be a really

436
00:20:58,280 --> 00:21:01,359
Speaker 4: confusing concept, like I've got equity, what part of my

437
00:21:01,480 --> 00:21:04,480
Speaker 4: equity can I use? Can I use my equity for this,

438
00:21:04,640 --> 00:21:07,680
Speaker 4: that or the other? And because there were so many questions.

439
00:21:08,000 --> 00:21:10,280
Speaker 4: And Jacqueline doesn't know this yet, but I am going

440
00:21:10,359 --> 00:21:12,760
Speaker 4: to make her come back on the show and do

441
00:21:12,920 --> 00:21:15,879
Speaker 4: a whole episode on the who, why, when, or how

442
00:21:16,000 --> 00:21:19,480
Speaker 4: of equity because it can be confusing, but I promise

443
00:21:19,560 --> 00:21:22,639
Speaker 4: it's not. And so many people are unaware of what

444
00:21:22,760 --> 00:21:25,560
Speaker 4: you can use your equity for, so like, it's not

445
00:21:25,880 --> 00:21:30,280
Speaker 4: just property purchases, like, and I'm not endorsing this, but

446
00:21:30,400 --> 00:21:32,240
Speaker 4: you can use it for business loans, you can use

447
00:21:32,280 --> 00:21:34,760
Speaker 4: it for a car, you can use it for a caravan,

448
00:21:34,920 --> 00:21:38,080
Speaker 4: you could use it for literally anything. But I would

449
00:21:38,160 --> 00:21:42,040
Speaker 4: like you to consider wealth creation as your primary But

450
00:21:42,280 --> 00:21:45,840
Speaker 4: for now, let's just touch on what most of the

451
00:21:45,920 --> 00:21:50,040
Speaker 4: questions were about. Jack. Can you explain how to use

452
00:21:50,119 --> 00:21:53,520
Speaker 4: equity to buy another property? And how does that actually work?

453
00:21:54,200 --> 00:21:56,520
Speaker 4: So I own a property, got some equity in it?

454
00:21:58,280 --> 00:22:01,320
Speaker 4: What do I do if I wanted to buy another house?

455
00:22:01,680 --> 00:22:06,879
Speaker 2: Okay, So to explain it, you are essentially drawing on

456
00:22:07,040 --> 00:22:11,159
Speaker 2: the equity in your existing property. Now the equity, I

457
00:22:11,200 --> 00:22:13,639
Speaker 2: guess there's a bit of a misconception that people think, well, Okay,

458
00:22:14,040 --> 00:22:16,680
Speaker 2: my ALVR, my loan to value ratio is only sitting

459
00:22:16,680 --> 00:22:19,280
Speaker 2: at sixty percent. Therefore, I've got forty percent of equity.

460
00:22:19,440 --> 00:22:22,680
Speaker 2: No no, no, no, you technically do no no mean

461
00:22:23,400 --> 00:22:23,960
Speaker 2: it's yours.

462
00:22:24,320 --> 00:22:24,560
Speaker 4: Yes.

463
00:22:24,880 --> 00:22:27,440
Speaker 3: However, like if you sold the house, what you would

464
00:22:27,440 --> 00:22:30,000
Speaker 3: get correct, This is correct. If you sold the house,

465
00:22:30,119 --> 00:22:30,960
Speaker 3: you will walk away with that.

466
00:22:31,119 --> 00:22:32,960
Speaker 4: That's the casholder that you would walk away by the.

467
00:22:32,960 --> 00:22:35,760
Speaker 2: Ideas, that's what you own. That's the difference between your

468
00:22:35,800 --> 00:22:38,040
Speaker 2: property value and what the loan is owing.

469
00:22:38,359 --> 00:22:39,960
Speaker 4: But that's not what the bank's like to see because

470
00:22:39,960 --> 00:22:42,400
Speaker 4: their conservative ray need to cover their own butts before

471
00:22:42,440 --> 00:22:42,840
Speaker 4: helping you.

472
00:22:43,200 --> 00:22:43,520
Speaker 3: Correct.

473
00:22:43,760 --> 00:22:45,879
Speaker 2: So the bank will allow you to draw up to

474
00:22:45,960 --> 00:22:49,000
Speaker 2: an eighty percent alvir so loan to value ratio, which

475
00:22:49,080 --> 00:22:52,040
Speaker 2: means in this instance, if your loan was at sixty

476
00:22:52,080 --> 00:22:54,600
Speaker 2: percent already that means and drawing it up to eighty percent,

477
00:22:54,680 --> 00:22:56,879
Speaker 2: that means we've got twenty percent equity that we can

478
00:22:57,000 --> 00:23:00,960
Speaker 2: now pull out and use towards a newer purchase. We

479
00:23:01,040 --> 00:23:03,440
Speaker 2: can obviously go over that eighty percent if need be.

480
00:23:03,680 --> 00:23:05,399
Speaker 2: We can't go up to one hundred percent, but we

481
00:23:05,440 --> 00:23:07,920
Speaker 2: can go above eighty percent and be a little bit flexy, well.

482
00:23:07,920 --> 00:23:10,800
Speaker 4: A little bit sometimes. But you've got to think, and

483
00:23:10,920 --> 00:23:13,200
Speaker 4: this is the way that I've always explained it to clients.

484
00:23:13,760 --> 00:23:16,560
Speaker 4: The bank always wants to see you kind of still quote,

485
00:23:16,760 --> 00:23:20,360
Speaker 4: have the deposits sitting against the mortgage. Yes, So that's

486
00:23:20,520 --> 00:23:23,920
Speaker 4: why that twenty percent is there. And it's not saying, oh,

487
00:23:24,000 --> 00:23:26,080
Speaker 4: that twenty percent is what you bought for, because you

488
00:23:26,160 --> 00:23:28,560
Speaker 4: might have bought for ten percent with LVR, or you

489
00:23:28,640 --> 00:23:31,960
Speaker 4: might have bought for five percent and gone through a scheme.

490
00:23:32,560 --> 00:23:35,040
Speaker 4: But they like to be conservative, so they love to

491
00:23:35,080 --> 00:23:37,920
Speaker 4: see the twenty percent number, and that's where we usually sit.

492
00:23:38,119 --> 00:23:40,320
Speaker 2: Yeah, they deem it as less risky in their eyes

493
00:23:40,520 --> 00:23:42,520
Speaker 2: if they can sit the LVR at eighty percent. So,

494
00:23:43,040 --> 00:23:45,439
Speaker 2: like I said, you can draw above an eighty percent OLVR,

495
00:23:45,480 --> 00:23:47,200
Speaker 2: but that's when you're deemed as a higher risk and

496
00:23:47,280 --> 00:23:50,639
Speaker 2: they will in some cases charge lenders Morgan insurance to

497
00:23:50,760 --> 00:23:53,199
Speaker 2: do that. So going back to it, if we were

498
00:23:53,280 --> 00:23:55,919
Speaker 2: to draw out, say the twenty percent equity from sixty

499
00:23:56,080 --> 00:23:58,600
Speaker 2: up to eighty and we use that for the new purchase,

500
00:23:58,640 --> 00:24:01,080
Speaker 2: there's two ways that you can and structure it. You

501
00:24:01,160 --> 00:24:04,359
Speaker 2: can obviously put both the existing property and the new

502
00:24:04,440 --> 00:24:09,080
Speaker 2: purchase securities against both loans, or you can just draw

503
00:24:09,240 --> 00:24:11,600
Speaker 2: out I like to say, so take out those funds

504
00:24:11,640 --> 00:24:14,600
Speaker 2: from the existing property in a separate loan and use

505
00:24:14,640 --> 00:24:17,280
Speaker 2: those towards the deposit of the new property. So you

506
00:24:17,320 --> 00:24:20,320
Speaker 2: would have, say, on the new purchase alone up to

507
00:24:20,400 --> 00:24:23,280
Speaker 2: eighty percent on that property, and then the additional amount

508
00:24:23,320 --> 00:24:25,480
Speaker 2: that you're putting down towards that pursase would come from

509
00:24:25,560 --> 00:24:27,400
Speaker 2: the equity in your existing property.

510
00:24:27,560 --> 00:24:31,520
Speaker 4: Yeah, so you're basically like left pocket, right pocket, and

511
00:24:31,600 --> 00:24:33,760
Speaker 4: it's not a pretend deposit, it's real money. But the

512
00:24:33,840 --> 00:24:36,440
Speaker 4: bank is never gp back and fortunately, yeah, but the

513
00:24:36,480 --> 00:24:38,720
Speaker 4: bank is never going to go, yeah, draw down twenty percent,

514
00:24:38,800 --> 00:24:41,480
Speaker 4: here's the cash, go shopping, Like, there has to be

515
00:24:41,560 --> 00:24:44,160
Speaker 4: an agreement in place where the equity has been drawn

516
00:24:44,240 --> 00:24:46,159
Speaker 4: down and that will actually just go straight to the

517
00:24:46,240 --> 00:24:49,639
Speaker 4: other one. So you could, in theory and not in theory,

518
00:24:49,680 --> 00:24:52,320
Speaker 4: in reality, you could have your first home, have the

519
00:24:52,400 --> 00:24:56,760
Speaker 4: exact circumstances Jack has just outlined, and not have to

520
00:24:56,840 --> 00:25:00,640
Speaker 4: save another dollar to get into your next house because well,

521
00:25:00,760 --> 00:25:04,040
Speaker 4: your equity increased over time and that's your deposit. So

522
00:25:04,119 --> 00:25:06,560
Speaker 4: we are drawing a deposit from your first house giving

523
00:25:06,600 --> 00:25:09,840
Speaker 4: it to the next house. And honestly, that's how people

524
00:25:09,960 --> 00:25:13,840
Speaker 4: create property portfolios where over time, great first one has

525
00:25:13,920 --> 00:25:17,440
Speaker 4: equity drawn down, second one no worries. Wait a few

526
00:25:17,520 --> 00:25:19,520
Speaker 4: years until that's got equity and we can use that

527
00:25:19,640 --> 00:25:22,560
Speaker 4: property to get into our next property. And does become

528
00:25:22,600 --> 00:25:25,880
Speaker 4: a complicated web because there's obviously things you might want

529
00:25:25,880 --> 00:25:28,640
Speaker 4: to refinance and change or pay down some of the equity,

530
00:25:28,720 --> 00:25:30,840
Speaker 4: and like there's just a lot that your broker can

531
00:25:30,920 --> 00:25:33,480
Speaker 4: take you through. But in theory, it's kind of like

532
00:25:33,560 --> 00:25:36,639
Speaker 4: a chain correct and that's exciting. Yep, And I think

533
00:25:36,680 --> 00:25:40,160
Speaker 4: it's really fun. Now I'm going to stop talking about

534
00:25:40,160 --> 00:25:42,639
Speaker 4: equity because I already promised the community that I've been

535
00:25:42,760 --> 00:25:44,520
Speaker 4: a whole episode on it, and I honestly, I just

536
00:25:44,560 --> 00:25:48,400
Speaker 4: think equity is so sexy, Like, oh my goodness, can

537
00:25:48,440 --> 00:25:50,800
Speaker 4: we talk about garran toor loans for a hot second,

538
00:25:50,800 --> 00:25:53,640
Speaker 4: because I feel like they're are they dirty words still

539
00:25:53,680 --> 00:25:57,120
Speaker 4: in mortgage broking? Not to us, but like so many

540
00:25:57,160 --> 00:26:00,440
Speaker 4: people on TikTok and so many people on instagrammling everyone

541
00:26:00,520 --> 00:26:03,120
Speaker 4: had a guarant torlan or like they'll be like, oh,

542
00:26:03,600 --> 00:26:06,000
Speaker 4: Jacqueline bought her first house, and this isn't jack situation

543
00:26:06,400 --> 00:26:08,760
Speaker 4: saying her name Jacqueline bought her first house, and I

544
00:26:08,920 --> 00:26:11,280
Speaker 4: found out that she actually didn't save any of her

545
00:26:11,320 --> 00:26:14,000
Speaker 4: deposits she just got a garan torlon from her parents,

546
00:26:15,000 --> 00:26:17,840
Speaker 4: as though you're not servicing a full US mortgage on

547
00:26:17,920 --> 00:26:22,520
Speaker 4: your own. Like, sit down anyway. One of the most

548
00:26:22,560 --> 00:26:26,360
Speaker 4: popular topics in our community is garan torloan's, especially when

549
00:26:26,400 --> 00:26:28,920
Speaker 4: it comes to what's the look like? How when? Where?

550
00:26:29,240 --> 00:26:31,680
Speaker 4: Can you just quickly explain what a garan torlon is

551
00:26:31,800 --> 00:26:32,199
Speaker 4: to us?

552
00:26:32,359 --> 00:26:37,920
Speaker 2: Yes, So having a guaranteur is essentially taking the guaranteur's

553
00:26:37,960 --> 00:26:41,800
Speaker 2: property and using that as additional security on your purchase

554
00:26:42,720 --> 00:26:46,560
Speaker 2: your loan to avoid lender's Morgan insurance. I guess this

555
00:26:46,720 --> 00:26:49,639
Speaker 2: is for anyone that's above an eighty percent LVR so

556
00:26:49,800 --> 00:26:53,240
Speaker 2: loan to value ratio to avoid that alumai charge and

557
00:26:54,160 --> 00:26:56,000
Speaker 2: again the bank deeming you is less risk.

558
00:26:56,520 --> 00:27:00,760
Speaker 4: So let's just say I'm buying my first home and

559
00:27:00,840 --> 00:27:02,960
Speaker 4: I want to use my parents' property. The bank is

560
00:27:03,040 --> 00:27:04,840
Speaker 4: going to look or I want to use my parents

561
00:27:04,880 --> 00:27:06,439
Speaker 4: as guarantee. The bank's going to look at them.

562
00:27:06,520 --> 00:27:06,680
Speaker 2: Though.

563
00:27:07,200 --> 00:27:10,240
Speaker 4: They have to have equity, don't they. They can't have

564
00:27:10,600 --> 00:27:12,679
Speaker 4: just a property and it's like a brand new mortgage

565
00:27:12,720 --> 00:27:14,919
Speaker 4: and they go, oh, well, guarantora, just sign us up,

566
00:27:15,200 --> 00:27:18,200
Speaker 4: like they have to have equity in their property and

567
00:27:18,560 --> 00:27:21,360
Speaker 4: it's a bit different to using your own equity, where

568
00:27:21,640 --> 00:27:23,840
Speaker 4: the equity never actually gets taken out of your mum

569
00:27:23,880 --> 00:27:25,560
Speaker 4: and dad's loan. And I say mum and dad because

570
00:27:25,600 --> 00:27:29,359
Speaker 4: that's the most popular guaranteur system. In fact, it's probably

571
00:27:29,440 --> 00:27:32,040
Speaker 4: one of the only ones we really see. They don't

572
00:27:32,119 --> 00:27:33,920
Speaker 4: take the money out of your mum and dad's mortgage.

573
00:27:34,200 --> 00:27:36,760
Speaker 4: They just put what's called a caveat over the property

574
00:27:37,080 --> 00:27:39,760
Speaker 4: to say, if they sell, part of this was actually

575
00:27:39,800 --> 00:27:42,080
Speaker 4: the deposit for this house over there. So that's the

576
00:27:42,119 --> 00:27:45,320
Speaker 4: way it limits people. But for a lot of parents,

577
00:27:45,359 --> 00:27:47,920
Speaker 4: they're not planning on selling, they're not planning on doing anything.

578
00:27:47,960 --> 00:27:50,760
Speaker 4: They're like, I'd love to give my kids a guarantee

579
00:27:50,840 --> 00:27:55,280
Speaker 4: loan to get them into property sooner without impacting you financially.

580
00:27:56,040 --> 00:27:58,640
Speaker 4: We have had situations where parents and like it must

581
00:27:58,680 --> 00:28:01,040
Speaker 4: be nice, but parents come to us with their child

582
00:28:01,080 --> 00:28:02,879
Speaker 4: and say, I want to help them get into property.

583
00:28:02,960 --> 00:28:05,560
Speaker 4: I've got a deposit saved for them, and we backflip

584
00:28:05,640 --> 00:28:07,840
Speaker 4: and go, that's so nice. Can we actually just use

585
00:28:07,840 --> 00:28:11,080
Speaker 4: the equity and your property and you put that cash

586
00:28:11,119 --> 00:28:13,399
Speaker 4: into the share market or you put that cash against

587
00:28:13,480 --> 00:28:17,119
Speaker 4: your own mortgage, because it comes out in the wash

588
00:28:17,720 --> 00:28:20,200
Speaker 4: like you're in a better everyone's in a better circumstance

589
00:28:20,280 --> 00:28:22,639
Speaker 4: because of that. I feel like it's a little bit

590
00:28:22,720 --> 00:28:27,479
Speaker 4: taboo still, and it really frustrates me because people think, oh, well,

591
00:28:27,520 --> 00:28:29,040
Speaker 4: you're getting a leg up when I can't.

592
00:28:29,320 --> 00:28:32,439
Speaker 3: It's so common, it's more, it's much more common than

593
00:28:32,480 --> 00:28:33,359
Speaker 3: people think, and.

594
00:28:33,680 --> 00:28:37,040
Speaker 4: It's not just common. Like I'm really sorry, but now

595
00:28:37,119 --> 00:28:40,240
Speaker 4: i'm a parent, I'm like, I would do anything for

596
00:28:40,320 --> 00:28:43,640
Speaker 4: my kid. And like, if Harvey comes to me one

597
00:28:43,720 --> 00:28:45,480
Speaker 4: day and says, Mom, I really want to buy my

598
00:28:45,600 --> 00:28:49,280
Speaker 4: first home. So if I think you're financially responsible, and

599
00:28:49,520 --> 00:28:51,600
Speaker 4: you know, I'm going to be that crazy mom, it's like,

600
00:28:51,840 --> 00:28:54,120
Speaker 4: show me some savings habits, Like I'm not just going

601
00:28:54,200 --> 00:28:56,360
Speaker 4: to give you a garantallan sir, Like that's not how

602
00:28:56,400 --> 00:28:59,400
Speaker 4: this house works. But I want to put you in

603
00:28:59,440 --> 00:29:02,120
Speaker 4: the best possible financial position. I didn't work this hard

604
00:29:02,280 --> 00:29:04,240
Speaker 4: so that I couldn't give my kids a leg up,

605
00:29:04,280 --> 00:29:06,520
Speaker 4: and I think everyone wants that. And if you are

606
00:29:06,560 --> 00:29:09,840
Speaker 4: looking at it going, well, it's unfair. The whole entire

607
00:29:09,880 --> 00:29:13,320
Speaker 4: world is unfair. I'm so sorry, but like, let people

608
00:29:13,440 --> 00:29:15,640
Speaker 4: do what they need to do. And yes, it's just

609
00:29:15,760 --> 00:29:18,720
Speaker 4: the market, but I think it's an important concept to

610
00:29:18,840 --> 00:29:21,800
Speaker 4: understand as well. Because your parents don't have to cough

611
00:29:21,920 --> 00:29:25,080
Speaker 4: up any cash, it doesn't financially impact them. There are

612
00:29:25,280 --> 00:29:28,720
Speaker 4: a lot of things that would happen before a guarantee

613
00:29:28,760 --> 00:29:30,520
Speaker 4: would be called up, and one of them would be

614
00:29:30,640 --> 00:29:32,280
Speaker 4: you selling your house because you can't afford it.

615
00:29:32,400 --> 00:29:35,880
Speaker 2: Yeah, and I guess around having a guaranteol like a

616
00:29:35,920 --> 00:29:38,360
Speaker 2: lot of people tend to think that the parents properly

617
00:29:38,400 --> 00:29:40,719
Speaker 2: need to be paid off in full. No, they can

618
00:29:40,840 --> 00:29:42,880
Speaker 2: have still have a loan. But drawing back to the

619
00:29:42,960 --> 00:29:46,400
Speaker 2: equity question that you asked again, similar to like if

620
00:29:46,440 --> 00:29:49,560
Speaker 2: you were drawing equity on your new purchase, there does

621
00:29:49,640 --> 00:29:51,800
Speaker 2: still need to be It depends which bank you go with,

622
00:29:51,880 --> 00:29:54,200
Speaker 2: but there does still need to be ten So twenty

623
00:29:54,440 --> 00:29:58,480
Speaker 2: to thirty percent inequity available on that guarantel's property as

624
00:29:58,520 --> 00:29:59,040
Speaker 2: a minimum.

625
00:29:59,400 --> 00:30:01,800
Speaker 4: Yeah, I want to pivot a little bit because we

626
00:30:01,960 --> 00:30:05,520
Speaker 4: were saying before the most common type of guarranteur is

627
00:30:05,560 --> 00:30:09,480
Speaker 4: a mum and dad guaranteuring a child. But we had

628
00:30:09,520 --> 00:30:13,840
Speaker 4: a lot of questions come through from community members wondering, well,

629
00:30:14,240 --> 00:30:16,400
Speaker 4: what if I want to have my partner as a

630
00:30:16,480 --> 00:30:19,800
Speaker 4: guaranteur on my mortgage? Instead of my parents. What do

631
00:30:19,880 --> 00:30:20,880
Speaker 4: you think about that question?

632
00:30:21,360 --> 00:30:23,720
Speaker 2: I sort of have to know the scenario a little

633
00:30:23,760 --> 00:30:27,160
Speaker 2: bit more, but I asked because when you say partner,

634
00:30:27,440 --> 00:30:29,200
Speaker 2: are they married, are they de facto?

635
00:30:29,720 --> 00:30:31,120
Speaker 3: That will come into it as well.

636
00:30:31,520 --> 00:30:34,480
Speaker 2: If you're married, then yes, your partner can be a

637
00:30:34,560 --> 00:30:37,240
Speaker 2: guaranteur to you if that's that you're wanting to purchase

638
00:30:37,240 --> 00:30:40,560
Speaker 2: an investment property in your name solely, or wanting to

639
00:30:40,600 --> 00:30:43,320
Speaker 2: purchase on the holiday property, whatever it may be. But

640
00:30:43,440 --> 00:30:46,520
Speaker 2: in some cases some banks will not allow if you

641
00:30:46,600 --> 00:30:48,920
Speaker 2: are in a de facto relationship, for them to guarantee

642
00:30:49,080 --> 00:30:49,920
Speaker 2: that purchase.

643
00:30:50,200 --> 00:30:54,760
Speaker 4: Yeah. Absolutely, Now I promised before, or I said to

644
00:30:54,800 --> 00:30:56,680
Speaker 4: everyone before, we're going to talk about like how to

645
00:30:56,720 --> 00:30:59,680
Speaker 4: pay off your mortgage sooner. So let's jump to that,

646
00:31:00,080 --> 00:31:02,240
Speaker 4: because I think that's an exciting topic that all of

647
00:31:02,320 --> 00:31:03,600
Speaker 4: us want to hear, how to get rid of our

648
00:31:03,600 --> 00:31:06,720
Speaker 4: mortgage sooner. I don't think anyone's been like, no, I'd

649
00:31:06,760 --> 00:31:08,520
Speaker 4: love to hold onto this for a little bit longer,

650
00:31:08,640 --> 00:31:10,840
Speaker 4: like it's just so nice to be in this relationship

651
00:31:10,880 --> 00:31:14,520
Speaker 4: with this bank. What are your favorite ways to reduce

652
00:31:14,560 --> 00:31:15,640
Speaker 4: the life of a mortgage.

653
00:31:16,040 --> 00:31:19,280
Speaker 2: I would say you're baking extra repayments and it can

654
00:31:19,400 --> 00:31:22,200
Speaker 2: be as little as possible, but almost just like rounding

655
00:31:22,400 --> 00:31:25,120
Speaker 2: up your mortgage repayment for that month or that week,

656
00:31:25,440 --> 00:31:28,320
Speaker 2: because every little bit does help, and it's going to

657
00:31:28,440 --> 00:31:30,960
Speaker 2: shave off years off your mortgage, which again is going

658
00:31:31,000 --> 00:31:32,080
Speaker 2: to save thousands of dollars.

659
00:31:32,360 --> 00:31:36,800
Speaker 4: Yeah. Yeah, And you can google mortgage repayment calculator and

660
00:31:36,920 --> 00:31:38,600
Speaker 4: have a bit of a play around with that once

661
00:31:38,680 --> 00:31:41,240
Speaker 4: you have your mortgage as well. Like it doesn't necessarily

662
00:31:41,320 --> 00:31:43,760
Speaker 4: need to be from a specific bank. My favorite ones

663
00:31:43,880 --> 00:31:47,040
Speaker 4: are the ones on the money Smart website because they're

664
00:31:47,080 --> 00:31:49,600
Speaker 4: not tied to a bank and it's just literally the numbers,

665
00:31:49,640 --> 00:31:51,320
Speaker 4: and they're not going to be like click here and

666
00:31:51,400 --> 00:31:54,040
Speaker 4: give us your emails so that we can send your results,

667
00:31:54,160 --> 00:31:56,320
Speaker 4: like I just get out of my emails. But you

668
00:31:56,480 --> 00:31:59,200
Speaker 4: put in your interest rate, how much you're paying, what

669
00:31:59,400 --> 00:32:02,320
Speaker 4: you own, what it's worth, all of that fun stuff,

670
00:32:02,880 --> 00:32:05,200
Speaker 4: and then you can play with the numbers so you go, oh, well,

671
00:32:05,240 --> 00:32:07,840
Speaker 4: what would an extra hundred dollars a month on this

672
00:32:08,000 --> 00:32:10,520
Speaker 4: mortgage look like? And it will spit it out and

673
00:32:10,560 --> 00:32:12,760
Speaker 4: I think you'll be surprised at how much it cuts off,

674
00:32:13,200 --> 00:32:14,720
Speaker 4: because I think a lot of people are like hundred

675
00:32:14,760 --> 00:32:16,880
Speaker 4: bucks on a mortgage, But my friend, your mortgage is

676
00:32:16,920 --> 00:32:19,200
Speaker 4: for thirty years, one hundred bucks, and.

677
00:32:19,320 --> 00:32:20,560
Speaker 3: That makes a huge difference.

678
00:32:20,600 --> 00:32:22,440
Speaker 4: Yea, and more that often than not you have to

679
00:32:22,560 --> 00:32:25,200
Speaker 4: check the terms and conditions of your particular mortgage. But

680
00:32:25,320 --> 00:32:28,280
Speaker 4: more often than not, those extra payments go directly to

681
00:32:28,360 --> 00:32:31,120
Speaker 4: the principle, not to the interest part of the loan,

682
00:32:31,400 --> 00:32:33,920
Speaker 4: and they'll build up in redraw exactly, and then you

683
00:32:34,080 --> 00:32:37,680
Speaker 4: end up in a better position. So definitely worth looking into.

684
00:32:38,440 --> 00:32:41,480
Speaker 4: Are there any other ways that you could potentially reduce

685
00:32:41,520 --> 00:32:42,080
Speaker 4: your mortgage?

686
00:32:42,560 --> 00:32:46,120
Speaker 3: I'd say making sure that you're using your offsets effectively.

687
00:32:46,360 --> 00:32:49,440
Speaker 2: Yeah. I mean a lot of the time people will

688
00:32:49,520 --> 00:32:51,880
Speaker 2: have one offset, which is fine if that's how you

689
00:32:52,200 --> 00:32:54,400
Speaker 2: prefer to your banking or if you only need one,

690
00:32:55,080 --> 00:32:57,479
Speaker 2: But when you have multiple, they are all working one

691
00:32:57,560 --> 00:32:59,800
Speaker 2: hundred percent for you. So if you've got you know,

692
00:33:00,000 --> 00:33:02,080
Speaker 2: even if it's three thousand dollars sitting in one account

693
00:33:02,240 --> 00:33:04,959
Speaker 2: or five hundred dollars in another account, and you've got

694
00:33:04,960 --> 00:33:07,200
Speaker 2: your bulk savings in another account, like, all of that

695
00:33:07,360 --> 00:33:10,720
Speaker 2: could be working towards your mortgage, and therefore more of

696
00:33:10,840 --> 00:33:13,800
Speaker 2: your payment is going towards the principal and therefore saving

697
00:33:14,280 --> 00:33:17,440
Speaker 2: money and interest as well, so making sure that they

698
00:33:17,480 --> 00:33:19,920
Speaker 2: are set up correctly, and if we need to open

699
00:33:20,040 --> 00:33:22,400
Speaker 2: up more, if we can with that bank, because you

700
00:33:22,480 --> 00:33:24,280
Speaker 2: do have other accounts that you might have your salary

701
00:33:24,400 --> 00:33:26,760
Speaker 2: going into another You might have maybe salary going into

702
00:33:26,760 --> 00:33:29,800
Speaker 2: another bank completely and then transferring that across. You know,

703
00:33:30,120 --> 00:33:32,360
Speaker 2: why don't we speak to HR and get that your

704
00:33:32,440 --> 00:33:36,440
Speaker 2: salary paid paid into an offset account directly because offsets

705
00:33:36,440 --> 00:33:39,880
Speaker 2: are calculated daily, so every little bit does help, it.

706
00:33:40,000 --> 00:33:41,840
Speaker 4: Does, and that would be an additional one I want

707
00:33:41,880 --> 00:33:44,880
Speaker 4: to throw in there. So the interest on your mortgage

708
00:33:45,280 --> 00:33:47,640
Speaker 4: is and I need to cavey out that there might

709
00:33:47,640 --> 00:33:49,720
Speaker 4: be mortgages where this doesn't happen, but I haven't seen

710
00:33:49,760 --> 00:33:54,040
Speaker 4: them recently. Is calculated on a daily basis. So if

711
00:33:54,120 --> 00:33:57,320
Speaker 4: you want to save even more off your mortgage, instead

712
00:33:57,360 --> 00:34:01,320
Speaker 4: of making the monthly repayment, you could start making weekly

713
00:34:01,440 --> 00:34:04,320
Speaker 4: repayments and set that up with your bank because that

714
00:34:04,520 --> 00:34:07,360
Speaker 4: can actually shave off years on your.

715
00:34:07,320 --> 00:34:10,640
Speaker 2: Mortgage way and end up making extra payments over that year,

716
00:34:11,440 --> 00:34:14,279
Speaker 2: which again builds up in regeor. And look that money,

717
00:34:14,600 --> 00:34:16,400
Speaker 2: the money that is building up in rege or is

718
00:34:16,520 --> 00:34:18,799
Speaker 2: your money. It is additional funds that you have paid,

719
00:34:18,880 --> 00:34:21,480
Speaker 2: so if you do need to access that, you can

720
00:34:21,600 --> 00:34:24,359
Speaker 2: draw that back out. But obviously, ideally the whole point

721
00:34:24,480 --> 00:34:26,040
Speaker 2: is to keep it in there and pay off your

722
00:34:26,080 --> 00:34:26,719
Speaker 2: mortgage sooner.

723
00:34:26,920 --> 00:34:28,920
Speaker 4: Yeah, all right, and I reckon this is a good

724
00:34:29,000 --> 00:34:31,200
Speaker 4: question to end on because I could talk about mortgages

725
00:34:31,239 --> 00:34:33,640
Speaker 4: literally forever. And that's why I've already promised the community

726
00:34:33,680 --> 00:34:35,920
Speaker 4: that you're coming back, because I'm like, no, we're not done.

727
00:34:36,000 --> 00:34:38,480
Speaker 4: But I also only had an hour with Jack today

728
00:34:38,600 --> 00:34:41,640
Speaker 4: or forty minutes I think with you today. I always

729
00:34:41,719 --> 00:34:44,200
Speaker 4: hear from our community that this is something that is

730
00:34:44,280 --> 00:34:47,160
Speaker 4: a really big priority for them, and it's paying off

731
00:34:47,200 --> 00:34:50,839
Speaker 4: their mortgage as soon as possible, like smashing it down,

732
00:34:51,360 --> 00:34:55,480
Speaker 4: not investing, just paying their mortgage off as aggressively as possible.

733
00:34:57,320 --> 00:34:58,400
Speaker 4: Is that something you recommend.

734
00:34:59,320 --> 00:35:02,400
Speaker 3: That's a tough question, I think again it comes down

735
00:35:02,440 --> 00:35:05,320
Speaker 3: to what do you do? What do I do?

736
00:35:05,719 --> 00:35:08,160
Speaker 4: Are you just smashing your mortgage off? You would be

737
00:35:08,360 --> 00:35:09,239
Speaker 4: she's so conservative?

738
00:35:09,239 --> 00:35:13,840
Speaker 3: I love it. Do you want my own assessor?

739
00:35:14,000 --> 00:35:14,120
Speaker 2: Yes?

740
00:35:14,239 --> 00:35:16,759
Speaker 3: Well, that's why I'm asking.

741
00:35:16,520 --> 00:35:18,040
Speaker 4: Because we can't tell people not to do it, that

742
00:35:18,160 --> 00:35:20,000
Speaker 4: we can share our personal lig You're going to come.

743
00:35:19,960 --> 00:35:22,960
Speaker 3: Down when it's going to come down to what you're

744
00:35:23,000 --> 00:35:25,120
Speaker 3: trying to achieve, like what your goals are. If your

745
00:35:25,160 --> 00:35:27,479
Speaker 3: goals are to reduce your.

746
00:35:27,480 --> 00:35:30,200
Speaker 2: Payments, pay off your home loan, own it outright as

747
00:35:30,200 --> 00:35:33,520
Speaker 2: soon as possible, and that's a goal fantastic. If your

748
00:35:33,600 --> 00:35:37,279
Speaker 2: goal is to purchase an investment property, you might not

749
00:35:37,400 --> 00:35:39,800
Speaker 2: be looking to direct all of those extra funds that

750
00:35:39,880 --> 00:35:43,160
Speaker 2: you do have into that mortgage. You might be wanting

751
00:35:43,239 --> 00:35:45,520
Speaker 2: to build up a deposit for the next purchase or

752
00:35:45,960 --> 00:35:48,600
Speaker 2: you know, pop that in redraw which we can again

753
00:35:48,880 --> 00:35:51,560
Speaker 2: draw out for the next purchase. We might want to

754
00:35:51,680 --> 00:35:55,080
Speaker 2: keep your mortgage repayments down on the existing property to

755
00:35:55,200 --> 00:35:57,960
Speaker 2: free up cash flow in a servicing perspective for the

756
00:35:58,080 --> 00:35:59,280
Speaker 2: new purchase of the investment.

757
00:35:59,360 --> 00:36:01,480
Speaker 3: So it just depends what your goals are.

758
00:36:01,560 --> 00:36:04,520
Speaker 2: If you're wanting to buy more property, smashing out and

759
00:36:04,560 --> 00:36:08,200
Speaker 2: paying off your home loan might not be the direction

760
00:36:08,320 --> 00:36:08,840
Speaker 2: that you need to go.

761
00:36:09,080 --> 00:36:11,920
Speaker 4: Fair, My goal in life is to get like filthy rich,

762
00:36:13,280 --> 00:36:15,680
Speaker 4: like I have no shame in saying that, and so

763
00:36:15,800 --> 00:36:18,239
Speaker 4: therefore my husband and I just pay the minimum on

764
00:36:18,320 --> 00:36:20,360
Speaker 4: our mortgage. We do have an offset or we have

765
00:36:20,560 --> 00:36:23,040
Speaker 4: multiple offset accounts, and that's where all our cash lives.

766
00:36:23,200 --> 00:36:25,320
Speaker 4: Because I want every single dollar that comes into my

767
00:36:25,360 --> 00:36:28,560
Speaker 4: accounts to be working while it's with me, and then

768
00:36:28,760 --> 00:36:31,200
Speaker 4: we are investing outside of that. And that's a priority

769
00:36:31,280 --> 00:36:35,239
Speaker 4: for me because for me, knowing what I know, time

770
00:36:35,360 --> 00:36:37,280
Speaker 4: in the market when it comes to our share portfolio

771
00:36:37,520 --> 00:36:39,560
Speaker 4: or you know, if we ever wanted to buy an

772
00:36:39,600 --> 00:36:42,319
Speaker 4: investment property which is not aligned to our goals at

773
00:36:42,360 --> 00:36:45,680
Speaker 4: this point, is a priority. So I want to make

774
00:36:45,760 --> 00:36:47,799
Speaker 4: sure that I am in the share market for as

775
00:36:47,840 --> 00:36:51,000
Speaker 4: long as possible, and that means not aggressively paying off

776
00:36:51,040 --> 00:36:54,480
Speaker 4: our mortgage. I'd actually prefer to get to sixty five

777
00:36:54,600 --> 00:36:56,200
Speaker 4: and yeah, like I'm planning on paying it off in

778
00:36:56,239 --> 00:36:58,400
Speaker 4: the timeframe that I was given. Don't worry, we're not slacking.

779
00:36:58,960 --> 00:37:01,120
Speaker 4: But like, I'd prefer to gain to sixty five, have

780
00:37:01,239 --> 00:37:04,160
Speaker 4: a bang and share portfolio, and also at that point

781
00:37:04,280 --> 00:37:07,560
Speaker 4: nearly have paid off my mortgage. Then get to the

782
00:37:07,680 --> 00:37:11,080
Speaker 4: age of forty maybe forty five, have a completely paid

783
00:37:11,080 --> 00:37:14,160
Speaker 4: off house but no other assets, and then I'm starting

784
00:37:14,560 --> 00:37:18,080
Speaker 4: from there with wealth creation. So there's lots of episodes

785
00:37:18,160 --> 00:37:21,240
Speaker 4: on that and we'll link it all in the show notes.

786
00:37:21,360 --> 00:37:23,800
Speaker 4: But miss Jaqueline Walsh, thank you so much for that

787
00:37:24,040 --> 00:37:27,800
Speaker 4: and for anyone who Wants More. Jack is going to

788
00:37:27,800 --> 00:37:30,000
Speaker 4: be back for that episode. I promised. I'll ask her

789
00:37:30,040 --> 00:37:32,640
Speaker 4: about it later. It will be on equity, so I'll

790
00:37:32,760 --> 00:37:35,000
Speaker 4: get her prepping and calling some banks and asking a

791
00:37:35,040 --> 00:37:37,400
Speaker 4: lot of questions because I would say that was by

792
00:37:37,520 --> 00:37:39,799
Speaker 4: far the biggest theme that we had when we did

793
00:37:39,840 --> 00:37:41,600
Speaker 4: A Q and A. So thanks in advance for agreeing

794
00:37:41,680 --> 00:37:44,800
Speaker 4: to that. No, Oris, thank you, And if you have

795
00:37:44,880 --> 00:37:47,600
Speaker 4: a friend or a family member who's been thinking about buying,

796
00:37:47,640 --> 00:37:50,040
Speaker 4: feel free to share this episode with them. Plus make

797
00:37:50,080 --> 00:37:52,279
Speaker 4: sure you hit subscribe so that you don't miss any

798
00:37:52,440 --> 00:37:54,520
Speaker 4: of the episodes that we have coming up this year,

799
00:37:54,560 --> 00:37:57,680
Speaker 4: because we've got some really good stuff planned. I'm biased,

800
00:37:57,719 --> 00:38:01,080
Speaker 4: but I was involved. Anyway, have a good week, guys.

801
00:38:07,440 --> 00:38:10,000
Speaker 5: The advice shared on She's on the Money is general

802
00:38:10,080 --> 00:38:13,879
Speaker 5: in nature and does not consider your individual circumstances. She's

803
00:38:13,960 --> 00:38:17,360
Speaker 5: on the Money exists purely for educational purposes and should

804
00:38:17,440 --> 00:38:20,600
Speaker 5: not be relied upon to make an investment or financial decision.

805
00:38:21,000 --> 00:38:23,440
Speaker 5: If you do choose to buy a financial product, read

806
00:38:23,480 --> 00:38:26,720
Speaker 5: the PDS TMD and obtain appropriate financial.

807
00:38:26,400 --> 00:38:28,120
Speaker 4: Advice tailored towards your needs.

808
00:38:28,560 --> 00:38:32,440
Speaker 5: Victoria Divine and She's on the Money are authorized Representatives

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00:38:32,560 --> 00:38:36,600
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810
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811
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