With Australia currently enduring its worst bushfire season on record, we all want to do our little bit to help out, so today we thought we’d discuss the important topic of underinsurance.
Indeed, researchers are warning that the nation is facing an underinsurance crisis, according to a recent report by the ABC, with the Insurance Council of Australia saying more than four out of every five homes affected by bushfires are underinsured.
Federal MP Susan Templeman had her home destroyed by a bushfire in 2013 and had one thing on her mind as she was walking past burnt-down houses on her street: “Gee, I hope I’ve paid the insurance”.
Fortunately, her insurance payments were up to date. However, her insurer still didn’t give her the news she was hoping to hear.
While her insurer said they’d pay out her claim, they advised they wouldn’t rebuild her home as she was underinsured.
You see, even though Ms Templeman had insured her place for its market value of $400,000, the cost to rebuild was about $600,000.
“And that was just like a bolt from the blue. It completely threw us,” she said.
Ms Templeman ended up selling an investment property to help make up the shortfall. But her neighbours on either side never rebuilt.
Chloe Lucas, research fellow at the University of Tasmania, explains that most homeowners don’t find out that they’re underinsured until it happens to them.
“Most people use insurance calculators online and it’s very hard to get those to give you a calculation that really reflects the real value of your property,” Ms Lucas told the ABC.
“They are most often based on the market value of your property, and that’s very different to the cost of rebuilding after a disaster.”
Ms Lucas suggests owners consider adding at least 20% to what they think their house is worth to avoid underinsurance.
Chances are, if you haven’t updated your home and contents insurance in several years, you could be underinsured.
There is also an astounding 23% of Australians who have no home and contents insurance at all, says the Insurance Council of Australia.
Here’s a quick checklist to see whether you’re sufficiently covered:
1. Check your policy and talk to your insurer to understand how much they will currently pay and under what circumstances.
2. Pay attention to clauses around fires and floods, particularly if you live in a higher-risk area.
3. Make sure all your items are covered – many people find they are underinsured because they forgot to include new pieces of technology, home renovations or jewellery.
4. Consider the worst-case scenario – if your house and contents were to be destroyed, does your policy cover the full cost of rebuilding? Make sure you consider building costs today, rather than the original cost of building your house.
If your home or suburb has been affected by this bushfire season, please know that our thoughts are with you – we know as much as anyone how important the family home is.
If you’re in an area that’s susceptible to bushfires or other natural disasters but has not been affected this season, we hope you stay safe and that this article has been helpful.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Applications for the new First Home Loan Deposit Scheme are now open, with 10,000 guarantees available to first home buyers looking to get a leg up into the property market.
Now, with 10,000 spots it might sound like you’ve got plenty of time up your sleeve to take advantage of the new scheme, but consider this: 110,000 Australians bought their first home in 2018.
So if you’re interested in applying for this scheme, you’ll want to put it at the top of your to-do list in 2020 and get in touch with us ASAP.
Ok, so currently people with a deposit of less than 20% usually have to pay Lenders Mortgage Insurance (LMI).
But under the government scheme, first home buyers with only a 5% deposit could be eligible to purchase a property without forking out for LMI.
Now, it’s important to note that this is not a handout – it’s simply a government guarantee.
But this guarantee can give first home buyers a “leg up”, says the federal government, as it could save you as much as $10,000 in LMI insurance.
The scheme commenced on 1 January 2020.
In order to be eligible first home buyers can’t have earned more than $125,000 in the previous financial year, or $200,000 for couples (and both need to be first home buyers).
More details on eligibility can be found here.
Below are the property price caps for each city and regional centre with a population over 250,000, followed by the price caps for the rest of the state.
– NSW: $700,000 (Sydney, Newcastle/Lake Macquarie, Illawarra) and $450,000 (rest of state)
– VIC: $600,000 (Melbourne and Geelong) and $375,000 (rest of state)
– QLD: $475,000 (Brisbane, Gold Coast, Sunshine Coast) and $400,000 (rest of state)
– WA: $400,000 (Perth) and $300,000 (rest of state)
– SA: $400,000 (Adelaide) and $250,000 (rest of state)
– TAS: $400,000 (Hobart) and $300,000 (rest of state)
– ACT: $500,000
– NT: $375,000
If you’re considering purchasing your first home in 2020 but don’t have a 20% deposit saved up yet – get in touch.
We’d love to run you through this new scheme in more detail and, if you’re eligible, help you apply for finance with one of the scheme’s participating lenders.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
With 2019 drawing to a close, we hope you’re shifting into holiday mode and getting ready to relax and unwind (or, at least, looking forward to a few public holidays!).
Hasn’t the year just flown by?
It only seems like only yesterday that the RBA cut the official cash rate for the first time in almost three years. But that was more than six months ago, and the RBA has cut the rate another two times since.
Now the official cash rate is sitting at a new record low of 0.75% – and financial markets now believe there’s a 45% chance of a rate cut when the RBA Board next meets in February.
Whether you’re celebrating the festive season with family and friends, getting away somewhere nice and relaxing, or working through (gotta make hay while the sun shines), we hope you have a wonderful end to 2019.
And when 2020 rolls around, if you need to check anything finance-related, please don’t hesitate to reach out to us.
We look forward to working with you again in the year ahead.
So here’s to a prosperous 2020!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Did you know there’s around $1.1 billion owed to Aussie families in unclaimed shares, bank accounts and life insurance? With the festive season just around the corner, here’s how to find some long lost funds for you and your family in less than one minute.
They say Christmas is a time for giving. But let’s be honest, it’s always nice to get a little surprise, too.
The beauty of this little life hack is that – if you’re lucky – you might experience both ahead of the budget-blowout that is the festive season.
Don’t believe us? A friend who gave us the idea for this timely post found $1140 for his aunty and $68 for his brother. That’s more than $1200 by simply searching his last name in a government register.
Sure, he didn’t find any money for himself – but his brother has promised to finally fork out for the family Xmas turkey this year!
Ok, so it’s super quick and simple.
Just click on this ASIC MoneySmart website link. Then type in your name in the search bar.
If nothing comes up try typing in just your last name and you might even spot some relatives who are owed money.
If the search brings up money that’s owed to you, simply scroll down the bottom of the ASIC MoneySmart website link for steps on how to claim the money.
The above link is run by the federal government. But there are also state and territory registers for unclaimed money as well, including:
NSW – Revenue NSW
Victoria – State Revenue Office Victoria
Queensland – Public Trustee of Queensland
Western Australia – WA Department of Treasury
South Australia – SA Department of Treasury and Finance
Tasmania – Tasmanian Department of Treasury and Finance
ACT – Public Trustee and Guardian for the ACT
Northern Territory – Northern Territory Treasury
Searching for unclaimed money in the above registers is straightforward and similar to the process for the MoneySmart register.
Whether your search for unclaimed money is fruitful or not, we hope that you enjoy celebrating the festive season with family and friends in the coming weeks.
And when 2020 rolls around, if you need to check anything finance-related, please don’t hesitate to reach out to us. We’d love to work with you again in the new year.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Got a pool you’re constantly scooping leaves out of but never use? Or perhaps you’re looking to cool off this summer in the privacy of someone else’s backyard. Well, a new pool-sharing app has just launched in Australia.
We Aussies love to swim. In fact, we’ve won the second most swimming gold medals at the Olympic Games – only behind the US.
And it’s no wonder why: research shows that nearly 2.7 million Aussies live in a house with a pool – the highest per capita in the world. That means either you or one of your nearby neighbours likely owns a pool.
To help us make the most of this tapped resource, an online marketplace for pool sharing called Swimply has launched.
Described as the ‘Airbnb of pools’, the service allows pool owners to rent their pool out by the hour.
The website and app features a platform where owners are able to list their pool and include customised information on availability, rules and prices.
Glancing at the website, listings range between $25 and $75 an hour – not too bad for an asset that would sit there collecting leaves otherwise.
Swimply makes its money by taking 15% of the hire fee paid to hosts and charging users a 10% service fee.
If you own a pool and are interested in listing it, it’s worth noting that Swimply has entered into a partnership with pool maintenance supplier Poolwerx.
As part of the partnership, Poolwerx will undertake compliance checks of all pools to make sure they meet Swimply’s hygiene and safety standards.
The sharing economy is taking off in Australia. In fact, according to the Sharing Hub, one in 10 Aussies make on average $1100 month from the sharing economy – that’s $13,200 a year that could help you pay off your mortgage.
Here are some other ways you can make an extra buck courtesy of your unused assets or time:
Car Next Door – got a spare car that’s sitting unused in the garage? Someone would likely rent it off you for $35 a day.
Airbnb – rent out a spare room, or even an unoccupied investment property, for anywhere between $60 and $250 a night.
Camplify – owners of caravans, campervans, motorhomes and camper trailers can earn $280-$2100 per week hiring to holidaymakers.
Spacer – Australia’s premier peer-to-peer marketplace for self-storage. Rent your garage or car park for a few hundred dollars a month.
The Volte – this website is changing the way Australians consume fashion. It’s a designer fashion rental marketplace connecting borrowers and lenders.
Mad Paws – who doesn’t like pets? Even better, get paid to look after someone else’s for $30-$50 a day.
If you want some more tips to help you pay off your mortgage, then get in touch. We’ve got a range of tips and techniques that can help you out.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Small business owners experiencing financial difficulties are often leaving it too late to seek help from a trusted adviser before going bust.
That’s one of the key factors contributing to small business insolvencies being explored by the Australian Small Business and Family Enterprise Ombudsman’s Insolvency Practices Inquiry.
Ombudsman Kate Carnell says it’s vital for small businesses to recognise the signs of financial distress and seek help as quickly as possible.
“We know this is an issue that is important to the small and family business community because there has been an overwhelming public response to our inquiry,” says Ms Carnell.
Ms Carnell says it’s vital that small and family businesses lean on their trusted advisers when financial concerns arise.
“They don’t have to go it alone,” Ms Carnell says.
“The sooner small and family businesses get help, the more likely it is they can achieve a more favourable outcome.”
Ms Carnell says the inquiry is keen to hear from anyone who has been through a restructure or insolvency to help inform their interim report, which will be released in December ahead of the final report in February.
She says the inquiry has already received 230 survey responses and 20 submissions, and expects that number to grow.
Stories can be shared by completing the inquiry’s online survey or by providing a submission via inquiries@asbfeo.gov.au.
In the meantime, if your business is going through a rocky financial patch and you’d like to explore your options, get in touch. We’re always happy to help out.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Predatory payday lenders are profiting from vulnerable Australians and trapping them in spiralling debt, according to a collaborative report by 20 consumer advocacy bodies.
The report, The Debt Trap: How payday lending is costing Australians, projects that by the end of the year there will be $1.7 billion worth of payday loans lent out in Australia.
It also found that over 4.7 million individual payday loans were taken on by 1.77 million Aussie households between April 2016 and July 2019.
“Predatory payday lenders are profiting from vulnerable Australians to the tune of an estimated $550 million in net profit over the past three years alone,” explains Consumer Action CEO and Stop the Debt Trap Alliance spokesperson, Gerard Brody.
“The harm caused by payday loans is very real, and this newest data shows that more Australian households risk falling into a debt spiral.”
Payday loans (also known as small amount credit contracts or SACCs) are high-cost fast loans of up to $2,000 paid back over a period of 16 days to 12 months.
These loans are high cost because you can be charged a number of significant fees on top of the original loan – including a fee of up to 20% of the amount borrowed when you take out the loan (establishment fee) plus 4% per month.
According to the report, equivalent annual interest rates for these loans can vary anywhere between 112.1% up to as high as 407.6%.
And because these loans are for short periods with unaffordably high repayments, many Australians take out additional payday loans to try and keep up and suddenly find themselves stuck in a debt spiral.
In fact, the Alliance estimates 15% of payday borrowers fall into a debt spiral – which equates to 324,000 Aussie households.
“The debt trap happens because of a combination of factors: the high cost of these loans, their relatively short repayment terms, the vulnerability of the borrowers accessing them who are generally on low to moderate incomes and using them to meet day to day living costs,” explains the report.
Digital platforms are adding fuel to the fire, with payday loans that originate online expected to hit 85.8% of all payday loans by the end of 2019.
“Academic research has found that digital platforms are making payday loans very accessible but often borrowers do not fully understand the costs, risks and consequences of these loans,” explains the report.
The growing demand for payday loans is driven, in part, by aggressive marketing techniques.
“This advertising is also blending the ‘sell’ with advice on good budgeting, giving consumers a misleading message that payday loans are somehow linked to good financial management,” the report adds.
Don’t fall for the slick marketing and digital ease: payday loans hurt many Aussie families.
Not only that, but they will have an impact on your credit score as they are listed on your credit report, which in turn, can affect your application for finance.
So if you, or someone you know, has taken out a payday loan and wants to find out more, feel free to get in touch. We’d be happy to discuss your options with you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
SMEs are set to have better access to finance, with the Australian government making two key moves this month to free-up lending to small business operators.
Firstly, Treasurer Josh Frydenberg says he will instruct the corporate watchdog ASIC to tell banks to waive responsible lending standards for small businesses.
Mr Frydenberg says while small businesses are exempt from responsible lending standards, many have been inadvertently caught in the tightening of those standards in the wake of the Hayne Royal Commission.
“There’s a real grey area as to what is a small business loan and a personal loan,” Mr Frydenberg told Fairfax.
“Small businesses are exempt from responsible lending standards; however, they are being inadvertently caught in the tightening of those standards post the Hayne royal commission as many use the family home to secure finance.”
Mr Frydenberg also recently released exposure draft legislation to allow the government to invest in an Australian Business Growth Fund (BGF).
The government is committing $100 million to establish the BGF and partnering with financial institutions to provide equity funding to SMEs.
The aim is for the fund to mature to $1 billion to help SMEs get access to the finance they need.
Australia currently lacks a patient capital market for small and medium enterprises, the exposure draft’s explanatory materials states. Patient capital can provide entrepreneurs with the finance needed to expand without relinquishing control of their business.
“The government will help small businesses grow by co-investing with other financial institutions to establish a BGF that will provide equity finance to small businesses across a range of industries and locations,” the explanatory materials state.
Mr Frydenberg adds that many SMEs find it difficult to obtain finance other than on a secured basis – typically, against the family home.
They also find it difficult to access additional funding once they have pledged all of their real estate as collateral.
“With better access to more competitive finance, SME’s will be able to grow, fulfil their potential and continue to underpin Australian economic growth and employment,” Mr Frydenberg’s statement said.
Legislation to establish the BGF will be introduced to parliament before the end of 2019.
If you’re a small business owner wanting access to finance, you don’t have to sit and wait for the government’s initiatives to take effect.
Instead, get in touch with us. We’re happy to talk through your current situation and help you explore your options.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Looking to refinance your home loan? A valuation is a vital part of the process. So today we’ll look at some ways you can help get your home in tip-top shape.
When you refinance to try and get a better deal on your home loan, the lender you’re applying with will arrange a valuation to estimate what your property is worth.
However, a survey by an online lender recently found that one in seven homeowners were unsuccessful in refinancing their mortgage because the value of their property had fallen.
With that in mind, it’s important to tick off as many of the below tips as possible to not only make the whole process smoother, but to give yourself the best chance at a favourable valuation.
Roll up those sleeves, get out the spray and wipe, and get ready to apply some elbow grease.
Ensuring you present a well-maintained property can make a big difference when your property is being valued.
Inside, you’ll want to make sure your kitchen and bathrooms are spotless, your floors are mopped/vacuumed, your windows have been cleaned, and the rooms aren’t cluttered.
Outside, mow the yard, weed the gardens, rake the leaves, clean the deck, and don’t leave any toys or sports equipment scattered around the yard.
If you have a copy of your building plans, give them to the valuer – preferably in advance of the valuation to help speed up the process.
Valuers sometimes also request council rates notices and/or land tax valuations, so it doesn’t hurt to have all relevant paperwork compiled in a dossier in case the valuer requests it.
Your valuer will need to be able to easily access every room in the house – not to mention your house itself.
By being present, you can speed up the process and be on hand to both showcase your home and answer any questions, which leads us to our next tip…
Sure, you’re not ‘selling’ your house to the valuer. But it doesn’t hurt to highlight its features.
Therefore compile a list of everything your house has to offer – especially if it’s not immediately apparent.
Not only will this ensure the valuer doesn’t overlook anything, but you can also give them the list to keep afterwards.
Your list could include things such as a newly-installed reverse-cycle air conditioner, insulation, solar panels, new carpet, top-of-the-range pool filter, or details of any recent renovations and how much they cost.
Your home’s features aren’t the only factors that can impact its value.
If there are any community plans slated for nearby – such as a new bike path or bus stop – have the information ready so you can let your valuer know.
Likewise, it doesn’t hurt to have the details of any recent sales figures for nearby properties on hand.
Do try and read the room though. Some valuers don’t like to be bothered too much, so if you start to get the feeling they want some space then definitely give it to them.
Sure, we love our furry friends. And they may even be considered a member of the family in many households. But not everybody feels that way about them.
Therefore it’s best to err on the side of caution and either secure your dog and/or cat, or ask a friend to look after them for a few hours.
In doing so they won’t get in the way of the valuer while they’re doing their job, and the valuer won’t have to worry about accidentally letting them out of the house.
A valuation can take anywhere between 30 minutes and 2 hours – it depends on the size of your property and how thorough the valuer is.
After the inspection, it typically it takes 24 to 48 hours for the valuation report to be returned to the lender.
So with all that said, if you’re looking to refinance and want to find out a little more about what the process involves, then definitely get in touch. We’d love to help guide you through it.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Are you paid weekly, fortnightly or monthly? New research indicates that how often you’re paid has a pretty big bearing on whether you’re a saver or a spender.
The research, conducted by small business platform Xero, shows that Aussies who receive their salaries weekly are more likely to splash their hard-earned cash than those who are paid monthly due to a term they’ve dubbed ‘payphoria’.
This, in turn, can play a big part when it comes to your ability to save for a home loan deposit.
The research analysed the payday habits of 1,000 Australians and found that a whopping 63% of workers claim to have financial difficulties before payday and rely on short-term fixes for support.
In fact, one in three workers have less than $100 in the lead up to payday, resulting in them foregoing luxuries such as coffee and eating out, or even delaying household bills.
“It’s not surprising that when payday does come around, Aussies are experiencing rushes of ‘payphoria’ and are wanting to reward their hard work by spending up,” explains Xero small business advocate Angus Capel.
Hence, the research suggests that the more paydays we experience, the more of these ‘payphoria’ spending sprees we reward ourselves with.
Below is Xero’s breakdown of Aussie savers versus spenders.
– 70% of Australians identified as savers (despite much of the research suggesting otherwise!)
– they’re more likely to be paid monthly
– they’re more likely to budget and keep track of expenses and spending habits (87%)
– they feel worried if they don’t have enough savings (95%)
– they’re more likely to be married with no children and live in metro areas
– their key financial goals are on financial management such as retirement, having an emergency fund and paying off mortgages.
– 30% of Australians identified as spenders
– they’re more likely to be paid weekly
– they don’t want to give up luxuries that come with saving (77%)
– they believe lifestyle is more important than saving for the future (56%)
– they’re more likely to use their income to pay off debts like credit card bills
– they’re more likely to have children under the age of 18 and live in regional areas.
If you think you’re leaning more towards spender than you are saver, then get in touch.
We can provide you with some effective saving techniques that can help put you on the right path to saving for a home loan deposit.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
