Mortgage advice from our new referral partner.

Mortgage advice from our new referral partner.

Over the years at PrimeAdvisory we have tried different structures to deliver a mortgage solution to all clients.  We have employed mortgage brokers, we have referred directly to banks and referred to third-party mortgage businesses.  After a successful trial period we are now introducing Loan Market Lower North Shore (LMLNS) as our preferred referral partner for all your mortgage needs.   

Loan Market is part of the White Family Group (who also own Ray White) and has been family owned for the past 23 years.  LMLNS is headed by Matt Clayton and his team.  Matt has been involved in the industry since 1999 and he and has team have the expertise to guide you through these interesting times and beyond.  Here is an article from them highlighting a few of the options available in the current climate.   If you do require help please don’t hesitate to call Matt on 0414 877 333. 

  

We are here to help answer all your mortgage needs.  

What’s a payment deferral?
This is also known as a mortgage holiday but don’t let the name fool you, this is no holiday. If you’ve been stood down, lost your job and cannot afford to pay mortgage repayments, you have the ability to enact a payment deferral. This is when a lender defers your repayments for a period of time. 

Every lender has their own rules and requirements on these payment deferrals. It’s important to know that at some point you will be required to pay the interest that accrued while the loan was deferred. For example, some lenders will add the amount you owe to the end of your loan and some will charge immediately after the payment deferral is off hold.  

Also, after the deferral, your balance and your repayments could be higher to make up for the interest accrued deferred repayments. 

What happens to the principal if repayments are frozen?
When a payment deferral on an existing mortgage is activated, it means that a lender will defer your required mortgage repayments for a specific period of time. Although your repayments are deferred, the interest on your loan is still calculated and added to the balance. In effect you’re paying interest on interest. 

So, when you recommence repayments your lender will recalculate your repayments so you repay the loan in the original term. This ultimately means your repayments will rise. However, there are options available to refinance after the payment deferral period, which could help to reduce repayments and increase the term of your loan, giving you a bit more flexibility.  

How do I get hardship assistance? 
First things first, while it’s important to understand what your options are in these difficult times, I urge you not to panic and spend hours on hold to your lender. Let’s look into your options first, I can help you navigate and understand what your options are during this time of financial hardship that many Australians are facing.  

Why refinance?* Is it complicated?  
There are many factors that you need to consider when looking to refinance. A few reasons you might want to refinance are:  

  • Take advantage of the recent RBA cut
    Now might be the right time to see if we can find a more competitive rate that is suited to your current needs. A lower interest rate could result in lower interest costs and might just save you a heap of savings over the life of your loan. 
  • After some new loan features?
    There could be a bundle of features that could give you more power over your finances when you refinance your mortgage. It might be the new rates that could save you money or the option to repay your loan faster without having to pay penalty charges. Some loans won’t charge you a monthly account fee or a fee for withdrawing money when you need it. 
  • Keen to tap into your home equity?*
    If you need some extra funds but don’t want to dip into your emergency funds or savings account you could tap into your home equity instead. Now, the line of credit your equity can get you depends on two things – The amount you’ve repaid on your mortgage and the value of your home. The benefits? You might be able to save on costs compared to other types of loans, start your home renovation or use the extra funds to help with your current circumstances. 

Is now a good time to fix my rate?*
There is no easy answer to this question, as it depends on your situation and your financial goals. Let’s take a look at the pros and cons of fixing your rate:  

  • Pros: Fixed rates prevent the risk of your repayments increasing due to a rise in interest rates and your repayments will stay the same for a set period. 
  • Cons: Fixed rates are usually higher than variable rates, but now as rates are continuing to decrease, there could be associated fees and costs for breaking your fixed rate if you chose to refinance.  

Refinance vs payment deferral?
A common question I get asked is whether to refinance or if a payment deferral is the way to go. There are a few different options which all depend on your current situation and financial needs. I can help answer any questions you may have around this to see what the right option is for you.  

What are the options as a landlord?
Your tenants may be going through some financial hardship at the moment and may not be able to afford paying their rent, I can help:  

  • Negotiate payment deferral options for your mortgage  
  • Discuss hardship options  
  • Refinance or reprice to get a more competitive rate 
  • Outline the costs of switching and not switching  

What are the options if I’m a small business owner?  

The JobKeeper Payment, has been set up by the Australian Government to provide a temporary wage subsidy available to eligible employers. This subsidy relates to current employees who were employed by the employer on 1 March 2020.  

It will allow businesses impacted by COVID-19 to access a fortnightly wage subsidy of $1,500 for a maximum of 6 months. Generally, to qualify businesses will need to demonstrate a drop in revenue by at least 30 percent. 

Want to chat about your options? Let’s talk and I’ll see how I can help.   

Please contact Matt Clayton on +61 414 877 333 or visit their website here. 

*Disclaimer: Any refinancing/access to home equity is subject to lender imposed terms and conditions including but not limited to loan serviceability, valuations and confirmed capacity to service both any existing and revised lending arrangements. **This document has been created by Loan Market Pty Ltd (ABN 89 105 230 019, Australian Credit Licence no. 390222). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter.You should before acting in reliance upon this information seek independent professional lending or taxation advice as appropriate specific to your objectives, financial circumstances or needs. Information included has been sourced from third parties and has not been independently verified. Accordingly, Loan Market Pty Ltd is not in any way responsible for nor provides any warranty express or implied as to its accuracy or relevance. 

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Personal finances post COVID-19.

Personal finances post COVID-19.

We are going to come out of this COVID era with a new set of rules.  We have been forced into these rules by isolation, some we have put off for years and some we never thought we would need to learn.  Many of these practices have just had the COVID torch shone on them and they are scurrying.  Here are the changes we think are here to stay. 

Online Banking 

Take for example all those who have resisted online banking for a variety of reasons and or fears.  Granted this has generally been the older population but not solely. Over the years they have continued to stand in queues at banks, use cheque books and send cash in envelopes for birthdays.  During isolation we have been forced to sign up to online banking to enable payments, transfers and shopping and now many of us are reveling in paying bills, shopping with Amazon and transferring money online.  Learn to love your bank online, branches will become a thing of the past. 

Cash is no longer king. 

Well, having access to cash is still definitely king but using it to purchase items has changed.  Going to the ATM or the bank and filling up your wallet for the week, with that folding stuff, is practice that we have been urged to abolish.  Shopping online from home and retailers forcing us to tap and go has changed the way it the way we pay.  If for whatever reason you do need to get cash it will be different.  

There was a time not too long ago when we were impressed by touch screens and all they enabled us to do. COVID has made most of us hyper-aware of every touchable surface that could transmit the disease, so in a post-COVID world, it is expected that we’ll have fewer touch screens and more voice interfaces and eventually machine vision interfaces.  Get ready to be recognized by your friendly ATM and having conversations with inanimate objects. 

Mojo (emergency) bucket to become the norm. 

With the increase in online shopping and the disappearance of cash as a limiter on what we spend, knowing and sticking to a budget becomes vital.  The “spend whatever you earn and then just use your credit card philosophy” is a definite practice of the past.  This is a practice that has thousands of families in dire straits today.  Those who have been living from pay cheque to pay cheque are vowing to themselves never again. As in most times of financial hardship the Australian household savings rate increases, and I am guessing it will be the same again this time around.  But how best to do this?     

For those who have not read Scott Pape’s book the Barefoot Investor and his 9 steps to financial freedom, here is a look at his bucket philosophy.  Divide your monthly income into 3 buckets:  

  • Blow bucket – for daily expenses, your budgeted items and the occasional splurge. 
  • Mojo bucket – to provide emergency funds of at least 3 months living expenses. 
  • Grow bucket – to build long term wealth and total security. 

The Mojo (emergency) bucket is what we all need to build to ensure financial stability in the years ahead.  Set the bucket philosophy in place now and be ready for anything that this world can throw at you. If you do want to take it further and follow all of Scott’s steps, then check them out here. 

https://barefootinvestor.com/barefoot-steps/ 

This strategy is not for everyone and has been provided as general information only and prepared without taking into account your financial position, objectives, and needs. You should consider its appropriateness and seek financial advice before making any financial decisions. 

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NSW gives 25% per cent land tax relief to landlords.

NSW gives 25% per cent land tax relief to landlords.

Earlier this month the NSW Government announced additional land tax assistance with both commercial and residential landlords able to receive land tax concessions of up to 25% of their 2020 calendar year land tax liability. This $440 million relief package follows the previous package announces that sets out rental waivers and deferrals for commercial tenancies, for more.

Support package.

A reduction of up to 25 per cent of the land tax payable on a parcel of land in the 2020 land tax year is available when;

  • your land is used for business or residential purposes
  • you’re leasing property on that parcel to a residential tenant – or a business tenant with annual turnover of up to $50 million – who can demonstrate financial distress resulting from the COVID-19 outbreak
  • you reduce the rent of the affected tenant by at least as much as the tax reduction
  • the land tax is directly related to the property for which rent has been reduced.

Financial distress is:

  • for commercial tenants – a 30 per cent drop in revenue due to COVID-19 pandemic
  • for residential tenants – a 25 per cent drop in household income due to COVID-19.

Who’s eligible.

To be eligible for the land tax support package, you must have a land tax liability in 2020.

You must also meet the requirements outlined in the support package, namely:

  • your tenant is suffering from financial distress as a result of COVID-19
  • you have reduced the rent of the affected tenant by at least as much as the tax reduction.

If you’re a landlord who doesn’t have a 2020 land tax liability, refer to the Service NSW website, which provides a number of NSW Government support options you may be eligible for.

If you require more information please click here or get in touch with our team on 02 9415 1511 or email reception@primeadvisory.com.au.

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IMPORTANT: JobKeeper updates including extensions, eligibility and more.

IMPORTANT: JobKeeper updates including extensions, eligibility and more.

After a week of frantic registrations for the JobKeeper payment, the Tax Commissioner and Treasurer have begun to make some amendments to the scheme. Please see below the key changes that may impact you.

Registration deadline extended.

On Friday 24th April the Tax Commissioner extended the registration deadline for April and May JobKeeper payments to 31 May 2020. However, to be eligible for April JobKeeper payments employers will still need to ensure that staff have been paid at least $1,500 for the first two JobKeeper fortnights (30 March – 12 April and 13 April – 26 April) by the end of April.

Eligibility changes for 16 & 17 year olds.

Full time students who are 17 years or younger and not financially independent have been excluded from receiving JobKeeper payments. This change will apply prospectively so employers who have already paid employees will not be out of pocket. Clients should take this change into account before making further payments to these employees. For more updates made to JobKeeper please click here.

Dedicated hotlines for employers to call to bridge finances.

The government have noted that many employers are experiencing cashflow difficulties whilst waiting for JobKeeper payments to arrive for their employees. Treasurer Josh Frydenberg has arranged dedicated hotlines with the major banks so employers are able to call in relation to accessing financial support to bridge the timing of wages payments to JobKeeper reimbursements. We note that it would be best to approach a bank that you already have an account with, but all bank hotline numbers are below:

  • Westpac – 1300 731 073
  • NAB – 1800 562 533 (1800 JobKeeper)
  • CBA – 13 26 07
  • ANZ –  1800 571 123

As always, we are here to help so please get in touch 02 9415 1511 or email reception@primeadvisory.com.au.

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URGENT ACTION REQUIRED: JobKeeper registration deadline & more.

URGENT ACTION REQUIRED: JobKeeper registration deadline & more.

PrimeAdvisory Director, Christian Borkowski, updates business clients on 3 important stimulus developments that (likely) require your immediate action.

Note updates have been made and posted on our new blog, click here.

1. JobKeeper Registration (note updates have been made to deadlines, please click here)

  • If you intend to claim JobKeeper payments for your employees for the month of April then you must register no later than 26th April and you must have paid all eligible employees at least $3,000 during the period 30th March to 26th
  • Registrations, (for April payments), open on 20th April & close on 26th
  • For clarity, if you haven’t registered by 26th April or paid your eligible employees at least $3,000 since 30th March then your business will not be eligible to receive any JobKeeper payments in respect of any employees for the 2 fortnights covering the period commencing 30th March and ending on 26th
  • Your business will still be eligible for future payments, but you will have missed out on these first 2 fortnights.
  • We have provided the following information on key dates & the registration process here: https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-and-apply-for-the-jobkeeper-payment/
  • You may be comfortable self-registering, but if you require assistance with registration please don’t hesitate to contact us – we are here to help!

JobKeeper Eligibility & Advice (note updates have been made to deadlines, please click here)

  • The purpose of this email is to ensure you are registered before the 26th April deadline.
  • We are available (and will be in contact with you), to provide all the advice you require in relation to eligibility of your business and employees after you have registered.
  • We recently provided this downloadable guide as an overview of available stimulus measures.
  • Government & ATO updates are being released regularly and we will keep you informed as required.

2. Small Business $10,000 Support Grant

  • The NSW government has announced a $10,000 grant available to businesses with revenue greater than $75,000 and annual payroll of less than $900,000.
  • The grant is intended to assist heavily affected (75% decline in turnover) small businesses to meet their ongoing expenses (including occupancy costs, insurance, professional advice, creditors etc)
  • Eligibility & registration process information is available here: https://www.service.nsw.gov.au/transaction/apply-small-business-covid-19-support-grant
  • Applications open on 17th April and close on 1st June 2020.
  • You may be comfortable self-registering, but if you require assistance with registration please don’t hesitate to contact us – we are here to help!

3. The PrimeAccounting 28 Step Stimulus & Business Continuity Checklist

  • We have developed a checklist as a tool to ensure that your business addresses every issue possible during these uncertain times, please get in contact if you have not yet received one.
  • Addressing these issues is important not just to survive, but hopefully thrive.
  • We are pleased to provide the checklist to use either as:
    • A “self-help” tool (DIY); or a
    • Partial DIY with some assistance from us; or a
    • Full advice & implementation by us.
  • We hope you find the checklist to be of value and look forward to your feedback.
  • If you choose the DIY path then you will find our downloadable guide & various blog articles to be great companion resources to the checklist.
  • If you choose to collaborate with us we look forward to working with you at this important time.

That’s all for now, but we’re sure to be in touch again shortly with more updates! For any assistance please get in contact 02 9415 1511 or email reception@primeadvisory.com.au.

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