First home buyers

Reserve Bank to ease LVR restrictions

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You may well have heard that the Reserve Bank announced some changes to their LVR (Loan-to-Value Ratio). 

They have announced that as of the 1st January, the amount of funds banks can lend with less than 20% deposit is increasing from 10% to 15%. Banks are also able to lend to investors with a 35% deposit compared to the current 40%. 
So what does this mean? 
If you are a first home buyer, it's going to be slightly easier for you to purchase if you haven't got a 20% deposit. (Note, however that the banks will still decide how generous to be with these applications). 

For investors, we predict that the banks will loosen up their policies in line with the reserve banks rules of needing a 35% deposit compared to 40%. This will make some difference particularly to new investors. We don't think these changes are going to be dramatic, but it will have a small effect. 

If you think this will impact you, free to get in touch with your friendly Velocity Financial broker. We are always happy to help.

Until next time.. 

The team at Velocity Financial

 

 

Brendon Ojala is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.

 

Remember the days of the old school yard

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The property market is much like the school yard; it’s full of bullies, rules, rule enforcers, and of course opportunities for growth and the people to help you grow.

 

My daughter turned five a couple of weeks ago. Awesome, she is now off to school! But what came next I was not prepared for: immense sadness.

 

It was sadness that my baby had taken her first step to independence, pain and concern in being responsible for making her go to a place where she knows absolutely nobody, and the fact that for the next 13 years she will have to raise her hand if she wishes to go to the bathroom.

 

Why did nobody warn me? And where was my fathers-of-five-year-old-girls support group?

 

When I started school I can vividly remember loving it from day one (well, truth is, I cried day one … a lot, but day two onwards was great!). I didn’t occur to me at the time that my parents, also, might have the same sort of concern that I’ve had these past weeks.

 

Anyway, all this reflecting on the virtues and risks of school, got me thinking that the lessons from the school yard transfer well into the property world. So, here are my three top school yard lessons for the home-buyer:

 

#1 - The more you learn, the better things go

If you pay attention in class and do your homework, much of your school experience runs fairly smoothly. It’s the same when looking to purchase property.

 

Those who go in most educated, learn the importance (or lack of importance) that RVs play in your decision-making process, know what to do when something you wish to buy has unconsented work on it, or know who you should consult to make sure your offer actually legally protects you, will come away with a higher chance of success and less chance of falling in to traps.

 

#2 – Find your BFFs

Today (my daughter’s eleventh of school), when dropping my daughter off, three children came up to her and said, “Can we play with you?” Then all four of them ran off and I left watching them running around laughing. I felt comforted in knowing she has a network of support.

 

The idea of purchasing sounds like fun. However, once we’re in the thick of it all, signing on the dotted line and trawling through confusing legalese, there is nothing more comforting knowing that you have team around you, who all place your best interests first. Your Velocity Financial adviser is a key member of that support team. We will keep you informed, we’ll do much of the donkey work for you, and you can contact us and ask your questions, absolutely any question! Let us support you.  

 

#3 - Avoid the headmaster’s office!

If you are in the dreaded headmasters office, things are not going well with your school experience. We can all identify (or have several first-hand experiences!) with this threat of going to see the person at the top, who will tell you off in such a way that makes you wish you still had the comfort of “pull ups” for back up when the fear kicks in.

 

Unfortunately, in the finance world, we have seen people who have found themselves in a world of trouble. Sometimes this is through association, debt from previous partners (“hanging out with the wrong crowd”), or have simply not understood the true ramifications of the decisions they have made (such as tax implications upon sale of a property). Our role in these situations is to sit with you, unpack your situation and help you navigate your way out. We’ll help you understand what will keep you away from walking down that lonely hallway to the naughty chair.

 

Lance Shearman is a Registered Financial Adviser with Velocity Financial. No investment decision should be taken based on the information in this blog alone. A disclosure statement is available free of charge upon request.