News
You Don’t Need A Finance Broker
Let’s say you’re looking for a home loan. Sure, you can Google home loans and you’ll be inundated with a choice of literally dozens of loans. You can walk into a branch of your bank and ask for a loan and they’ll be only too happy to help. You can ask a friend that recently got a home loan with whom they spoke and go with their lender. I could go on…but I’m sure you get the picture.
The Middle
Our financial institutions split their organisations into various segments. Invariably, they target most of us at the lowest (retail) segment and institutions at the highest. The middle is defined as everything in between. Most banks define this middle as any organistion that requires funding less than a specific amount (around $50M depending on the organisation).
Rates Negative
Two weeks ago Japan did something to its economy the effects of which will be felt all over the world. It dropped it’s official interest rates from zero to negative. Why? To answer that question we need to take a trip down memory lane.
Price and Prejudice
In the main, financial markets have – over time – developed pricing mechanisms to cater for risk and service. Price is used in banking as a risk differentiator. As we saw in the recent movie “The Big Short” not all of it works well but if you compare it to other industries (and I will), then it holds up ok.
Irrational Markets
Markets can remain irrational longer than you can remain solvent. Markets can remain irrational longer than you can remain solvent. – John Maynard Keynes.
Voodoo Valuations
In past articles I have written about how banks have been forced to become more conservative in their residential property lending. They have generally done this by reducing LVR’s tightening servicing requirements, increasing living expenses and using price as a way of turning a particular tap on and off (such as lending for investment properties). An area we have not seen much written about in the past is probably the area of greatest complaints. Valuations.
Neither a Borrower Nor a Lender Be
Shakespeare is referring to the borrowing from friends and how it can lead to the loss of both the debt and the underlying friendship. Who now would consider where they borrow from a friend? If you don’t you probably should but with the caveat that you should choose your friends wisely.
SMSF Borrowing Complications
Last year saw us receive many enquiries by wide-eyed investors about buying property within their Self Managed Superannuation Funds (“SMSF”).
Holiday Cleanup
This time of year can be pretty slow work wise and most companies are running on skeleton staff. From a personal point of view it’s a great time to stop putting off having a look at your largest expense and clean-up your mortgage.
Death, Taxes and Climate Change
In the last two weeks, the press has been in a lather about the UN Climate Change conference held in Paris. It is worthwhile travelling down memory lane to see how the world has behaved in the past when it comes to the previous most dominant source of energy.