Archive for the 'Case Studies' Category
- Has your lender reviewed your mortgage or financial position recently?
- How long since you have checked to see if you have the best deal deal for your circumstances?
- Do you think your lender is likely to suggest a better, cheaper way to structure deal with them?
- Do you think they would be objective in their offering when they only represent one brand, Theirs?
If you think the answers to any of the above is ‘No’, then HAVE YOU CONSIDERED A FINANCE BROKER?
- They will have access to numerous lenders in addition to major banks!
- being able to provide options that would take you hours to research. There are always ‘Specials’ being run by lenders , which can change weekly.
- Can advise of costs & pricing & provide various options
- Assist with developing a strategy to meet your goals like reducing number of payts & amount
- In a lot instances, present options for lower interest rates and costs
- Generally free to you as in most cases they are paid by the lender that you choose
- Brokers must be licenced
Please note: This is not an attempt to scare anyone, more to alude to opportunities to protect your business moving forward in times of financial market flux.
Your banking arrangements have been fantastic over the last 7 years, You’ve made all your payments on time. The Bank has given you most of what you have wanted when you generally wanted it.
When things are good there is little to be worried about from yours or the banks perspective. But for the last 12 months things are not so good!
The Banks and other lending institutions haven’t been able to get money/capital the way they use to. If they are, the cost of obtaining it is going up.
What does this mean going forward?
Well … we all know that:
Interest rates, Fuel and Food have all moved up. The RBA is suggesting that there is a need for 100,000 jobs to be lost over the coming period. With the reduction in confidence and the slowing of the economy, small business is going to come under some great pressures if it hasn’t already. Debtors starting to stretch – Creditors starting to push.
This being the case, banks are likely to take a position that they ‘need to conserve our reserves’. They are doing what is important for their business and that is reasonable! But the implications for your business may be profound. If not today it will be in 6 to 12 months time.
Consider this: All your savings, house, super and perhaps one or two other things that you have forgotten, along with Credit Cards, home loan, Business loan, Business account are all with the one Institution. You have met all your payments since Adam was a boy. But the bank changes their approach or assessment of your business. Because the Banks need to conserve their reserves!
What happens then, the relationship you thought you had along with the good payment history doesn’t count for much. Your effectively left financially hamstrung
What would happen if they used your savings to cover some of the house debt or credit card, because the mortgage I signed has an ‘All Monies’ Clause which allows surplus funds to be utilised to cover other debts. (Usually if you are in default). Or the credit card is behind but everything else is up to date, you could be considered in default on all your borrowings. Guess what happens then?! You’re in a little trouble with not that many options to fix the problem. If you think taking to another bank, you need to think again. They are under the same pressures.
When you are most likely to need some flexibility or assistance from your ‘banking relationship’ there is a strong possiblity your that your bank is not going to be prepared to help you.
Is this the time to consider finance and banking options for you & your business?
Is it time to be protecting your financial flexibility before it’s too late?
Talk with Finance Know how obligation free to determine some options. There are various opportunities that you may not have considered.
July 22, 2008 12:00am
MORE Queenslanders than ever before are defaulting on their mortgages and losing their homes to the banks, caused by high interest rates and petrol pain.
State court records show the number of property repossessions has escalated in the past few months and housing experts blame rising petrol prices as much as interest rates for the spike in cases around Brisbane’s urban fringe.
Records show the number of repossessed residential and commercial properties hit a record 1019 last year and continued at the same rate – about 85 a month – until May.
But a Courier-Mail search of electronic court files has revealed the state’s Supreme and District courts handled 100 property repossession cases in June and another 83 cases by July 17, with two weeks of the month still to go.
The figures show a majority of the recently surrendered homes were in suburbs surrounding Brisbane and on the Gold Coast.
Browns Plains couple Robert and Bettina Bengtsson have to come up with a seemingly impossible sum of money within days or have their Browns Plains home repossessed.
Aged 31 and 27, with a nine-month-old baby to look after, the Bengtssons have already cashed in their super, looked for higher-paying jobs and tried to start a business.
But they are still about $14,000 behind in their mortgage payments, which they have defaulted on numerous times.
Mr Bengtsson said the nightmare started when they both lost their jobs. Mrs Bengtsson was pregnant when she lost hers.
“Everything was going great and then the company I was working for decided they were going to close down nightshift, so I took an involuntary redundancy and my wife, because she was a casual … they just said she wasn’t needed any more,” Mr Bengtsson said.
“When we first got the house it was only $437 a week, so we were paying $500 a week.
“And now it is up to about $550 a week, so it has jumped over $120 in those two years.
Bray Park, Scarborough, Narangba, Alexandra Hills, Kingston, Browns Plains and Thorneside are the top targets for repossessions in Brisbane, while Carrara, Arundel, Ormeau Hills, Currumbin, Tallebudgera Valley, Runaway Bay and Surfers Paradise were some of the affected suburbs on the Gold Coast.
National Shelter chairman Adrian Pisarski said the figures demonstrated the compounding effect of high petrol prices on already financially stressed homebuyers.
“It always seems to be in areas poorly serviced by public transport,” he said.
“People there are double-whammied. Their housing costs are going up and their transport costs are very high because they are car dependent.
“I think many households would cope with one or the other, but not both.”
Housing Industry Association chief economist Harley Dale said a higher rate of mortgage defaults was expected, given the increased burden of interest rates and petrol prices.
HIA calculations show the repayments on a $250,000 loan would have increased by $449 a month in the past three years, while the monthly cost of petrol for an average household would have risen by $150 in the same time.
It has been estimated that about 160,000 Queensland households are experiencing mortgage stress.
“There is no doubt it is a much more difficult environment out there in 2008 than it was in 2007,” Mr Dale said.
Mortgage and Finance Association Queensland president Bruce Mawson said stalled property values had exposed some stretched homebuyers, who had been in the habit of using the equity in their home loans to pay off other debts.
He urged anyone having trouble making their mortgage repayments to talk to their bank as soon as possible.
Credit crisis to crunch harder next year
Author: adminCourier Mail
July 11, 2008 02:22pm
NEARLY half of Australian businesses have been affected by the fallout from the global crunch but the worst could still around the corner, a credit insurance company says.
Atradius Australia and New Zealand managing director David Huey said payment defaults and insurance claims reported to his firm had doubled since last year.
“Our enquiry rate for new business has also doubled, in part due to the high-profile insolvencies like Beechwood Homes, which has meant that industry segments like construction have been looking at insuring themselves against non payment,” Mr Huey said.
Companies in United States had the highest response in a 14-country survey.
About 68 per cent of US firms said they had been affected by the credit crunch, followed by Mexico, at 60 per cent.
Other nations where companies said the credit crisis had a high impact were Italy with 58 per cent, the UK, 46 per cent, Spain, 44 per cent and Australia/New Zealand, 43 per cent.
The Atradius credit crisis survey analysed comments from 2,500 respondents about their company’s experiences and the likely effect of tougher financial conditions.
“Factors that may be contributing to these reports include reliance on the building and construction or the financial services industry for GDP growth, a relatively large percentage of GDP tied to trade with the United States or heavy use of receivable securitisation,” Mr Huey said.
Restrictive credit and increased default payments would dampen growth and raise business defaults globally for the rest of 2008 and into 2009, the survey said.
Some 71 per cent of companies said an increase in payment defaults was their biggest concern, 67 per cent worried about restrictions in sales growth and 65 per cent feared increased capital costs.
Mr Huey said it was essential for a healthy company to be aware of how to protect themselves from risk exposure.
“The credit crisis is highlighting the importance of protecting your cashflow,” he said.
“The reality is that without good cashflow your business will be in jeopardy.”
Do your finances need a new hair style?
Author: adminLike bad hair, how long can you afford to let things go? If your fringe stopped you from seeing properly & you nearly had an accident as a result of it getting in the way or distracting you, would do something about it & get it cut!
In terms of your cash flow is it starting to go grey and thinning? Just like my hair!? Perhaps it’s time for a new finance hairstyle. One that will help with the working environment! Bottom line -improve the amount of cash you have, to do what you need to do, when it’s required.
Hairstyles can go out of fashion, but for now perhaps the number 4 is required with a few highlights. Keeping it simple, but works for the foreseeable future until it grows a little and then it can be developed into another style.
Some instances where you may be able to adopt the Number 4 could be:
Self employed – who have taken on a ‘Lo Doc home loan’ in the last few years. No doubt the debt had been capped to a % of the value of a residential property. That was great before because you didn’t have to provide financial statements and alike. The down side is you are likely to be carrying a lot of ancillary debt on top of this. Like credit cards, car & equipment loans etc etc. All of which drain your cash flow resources.
There are lenders that can role several debts into one. In a lot of instances there will be a requirement for financial statements to be provided however there are others that will consider the situation without profit & loss statements. The end result being that perhaps hundreds or even thousands of $$ can be saved on a monthly basis.
The structure of your debt may need to be looked at, are there commercial assets that could be structured over longer periods?
What sort of debtors do you have? Is there an opportunity to have those funds quicker?
Can you gain discounts for quick payment?
All these sorts of questions need to be asked of you when looking in the financial mirror. Could you need a new finance hairstyle?
What have you got to loose in asking the question? Ask Finance Know how!
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