Hi, welcome to the podcast with podcast my business. And today we’re joined by Anita from advanced finance services or solutions. Sorry that you love it when that happens. Okay. All right. So, um, yeah, so that’s advancedfinance.com.au How you going Anita?
Anita
I’m fabulous. Thank you for inviting me to join you today.
Tony skinner
No problem. And I mentioned that we did this last Friday, but working from home, which we’re all doing at the moment, there’s some jackhammering in the building and it ruined last week, so this week’s gonna be even more awesome.
Anita
We just had a little practice.
Tony skinner
We did and practice makes perfect, which is great. Okay, so, advanced finance solutions, um, what is it that you actually focus on?
Anita
So we’re mortgage brokers and we specialize in residential lending. So we help people buying property or first time buyers, maybe people living with parents that are driving them all crazy at the moment and want to get out of their mom and dad’s home or if they’re renting and they want to buy their own home. So, yes, we specialize in residential property purchases for people. And also that with you know, with that comes say someone if they want to buy a property through self managed super fund or they want to do a refinance or restructure anything to do with a mortgage
Tony skinner
Well its interesting at the moment because of the event which I’m calling the Covid Recession And Pandemic. And if you think about the start of each one of those words, the letter it’s been crap.
Anita
That’s one word for it.
Tony skinner
Yeah. You know, I think I think it’s probably a good word to use, but there we go. There’s lots of things happening with a mortgage and so forth. I was walking down the street the other day and I saw a whole queue of people outside of property for inspection now that people can do that for an auction, I thought the auction day but not for another two weeks. So there is lots of good activity happening out there.
Anita
Yeah, so we’ve gone from what I in my opinion, we had a seller’s market before the event. And now at the moment, it’s turned around a little bit and it is a little bit more of a buyers market. So you are getting a lot of buyers coming out going right what what bargains are out there. What can we get this property for? And it certainly created a little bit of activity, I kind of expected the property market would have gone way down during the event but in, you know, the areas where we operate, I haven’t seen really much downturn at all, but there definitely is some motivated vendors and the market is freeing up a little bit more so it is more attractive for buyers without a doubt.
Tony skinner
Yeah, that’s the thing I think has been an overestimation which is one of those things about the impact in Australia for the events, so I guess it’s gonna be a lot of people out there looking to refinance, we’re considering getting investment property, what would be some tips for people doing that at the moment.
Anita
So right now, even though the banks have, a lot of them have got policies around job keeper and job seeker and things like that there’s not a lot of loans getting over the line for those people. So you really need to be in really stable employment and have secure positions to be able to take out a mortgage and I think that’s probably Responsible Lending Anyway, you really don’t want to be taking out a new loan that’s going to end up in hardship down the track. So you definitely need to be in stable employment. And my advice is, even though I’m a mortgage broker, my advice is definitely use a mortgage broker because they’re going to help you source you know, a really suitable long term loan for you. There’s no use grabbing the cheapest loan with the cheapest lender if in a year’s time that that loans going to jump up to some crazy interest rates. So you want to a lender that you’re going to be really happy with and make some sensible choices. And the broker can explain all the different sorts of loans, the advantages of offset or redraw instead or fixed variable or maybe a mix. There’s so many things to consider. And unless you are a full time mortgage broker in the industry, you’ve got really a very small idea about what’s going on unless you’re doing a lot of research yourself.
Anita
Well, that’s exactly right. Because there was a recent example with me bank who they had customers who had put money into the redraw. And me bank went well, we’re going to take that money for whatever technical reason they justified it without bothering to tell people and there’s a danger with redraw, but less so for, for offset. So what is difference between the two.
Anita
Okay, so it actually, it’s a little tricky that one. So, offset is a savings account that’s linked to your mortgage. So if you have money sitting in the offset, that money is taken off the balance of the mortgage when they’re calculating, they’re in the interest for the month. So just say for example, you had $200,000 owing on your mortgage and you had $10,000 in your offset, your interest is going to be calculated at 190,000. So that, you know those accounts can be very handy. A lot of the time with offsets their offsets, there is an annual fee. And this with a lot of lenders is a little bit higher interest rates. So you really need to have a little bit of money in there probably 20 or 30,000, at least for an offset account to be effective. But there are some smaller lenders that do have loans with offsets that don’t attract an annual fee and a higher rate. So it’s definitely worth looking into The difference between that and redraw so redraw it is effectively exactly the same. But instead of having that 10,000 sitting in a savings account, it’s sitting off the line. So your balance will actually show 190,000 with $10,000 available to redraw. Now, what happened with the members equity clients is that members equity, as you said, decided that they were going to take those funds and and use them for whatever I’m not exactly sure what what the purpose was. The good news for members equity clients that that did happen to is that they have reversed that decision. They copped a really hard time over that decision and the decision was reversed, but just so your clients are aware that that can happen your redraw can be wiped by the lenders but also so can the funds in the offset so a lot of people feel that it’s safer and offset wall if your lender goes into any type of financial difficulty. Those funds can Be, can be wiped off your loans. So just be aware of that. And if you ever really worried about your financial institution, you know, you might want to consider putting some of those funds across to somewhere else for a little while. But in Australia, we’ve been very, very blessed with this financial Well, it’s been a really a bit of a financial crisis as well as a health crisis. And, you know, I’m not concerned about any of our lenders at the moment. touchwood I think we’re all pretty in good hands.
Tony skinner
Well, we are we are very fortunate that I think it comes down to the GFC which we didn’t get to massively for. I had a great GFC I’m hoping to have a good COVID recession and pandemic. So, I’m hoping to have a good covid time. There we go. I’d call it out. So I’m hoping that crap isn’t crap for me.
Anita
You’re liking the crap.
Tony skinner
Yeah, it’s Friday afternoon. I always have more interesting podcasts on Friday afternoons. Always having a bit more fun. But look, you know, as long as you are careful and you’ve got some money behind you, I guess you can survive this and the banks, I think they all got learnt from the GFC. And they’ve been forced to have more money put aside, so I don’t need to worry about it.
Tony skinner
Now, I’m just having a look at your services. There’s quite a few things that you do. And you even do insurance, is that right?
Anita
We do refer to insurance for we’re required actually to check that clients have life income protection and those type of insurances. The clients don’t have to have those but we do have to find out if they have them now under Responsible Lending, and then if they don’t, that we need to refer them to someone who can, you know, discuss their insurance needs. So Yeah, we we have a panel of people that we refer to for that type of thing. Yes.
Tony skinner
All right. Well, I guess most people got it through super anyway. So
Anita
yeah, that’s true. Yes. Yes.
Tony skinner
All right, cool. Now we’re running out of time, and already got the tips in, which is good, because we’re talking to finance stuff. So I like to give the obligatory warning of general advice only blah, blah, blah.
Anita
Yes, absolutely. So all of the information that we give is general advice until we’ve, you know, done a fact find with you and we’ve been able to obtain your information, then we can give personalized advice, but yeah, we’ve just given having a general chat today. So definitely take on board what we’ve said, but make sure that it’s appropriate for your personal situation. Definitely.
Tony skinner
Fantastic. Okay. Well, that’s great. Um, anything else you’d like to add?
Anita
No, but, you know, I think one of the really important things that we haven’t talked about is just if you are excited It’s in any type of financial hardship, to protect your credit rating and also to make sure that you’re not going to be hit with any penalties. Make sure you get in touch with your lender before you hit any financial difficulty. I think that’s one very important thing to know.
Tony skinner
Well, I, when this event first started, I had a major wigout. One more restriction, and I would have been done over, shall we say? And I got in touch with the bank. And I eventually go into the three month holiday, which I believe does not show up. In fact, I check my credit record does not show up in the credit records. So that’s actually a good thing.
Anita
Yeah. So luckily, the ABA have announced that anyone that did make hardship arrangements before they got behind, it won’t be listed on your credit rating. And we do believe it won’t impact your ability to borrow down the track. So you did the right thing. It’s definitely good to get in touch beforehand.
Tony skinner
Fantastic. Okay. All right. Thanks so much for your time, Anita and that’s at Advancedfinance.com.au.
Anita
Thank you for having me. I’ve loved it.
Tony skinner
Awesome.