News
The Triple Threat For Interest Rates
During the week, a couple of financial earthquakes – which had been predicted previously by some in the media – occurred. Namely, Moody’s downgraded the Long Term Debt of Aussie banks and the Federal Government passed legislation to impose the Bank Levy on banks last week and State Governments are also looking to line up to re-introduce Financial Institutions Duties (something they agreed to abolish as part of the deal to introduce GST almost two decades ago).
Unofficial Rate Increases
The media still holds its collective breath the first Tuesday of every month to see what the RBA has done with cash rates. Many economists and purveyors of financial services use it as a way of notifying their clients and potential clients of the most recent momentous decision by the RBA.
If We Only Knew
We took on a client – against our better judgement – about a year ago. He wanted a home loan and a few months ago we found him the best rate at the time. He was an acceptable credit risk for the amount he wanted to borrow at the time – he was also at his borrowing threshold. Since he got his loan a number of new entrants have come into the mortgage market offering what appear to be very attractive rates.
Mortgage Soup
Owner Occupied, Investment, Fixed rate, Variable rate, P&I, Interest Only, Offset, Equity loan, Foreign Income, Casual Income, Part time income, Bonus income, Strata title, Company title, Torrens title, Over 55s accommodation, Reverse mortgages, Lending to SMSFs, Lending to senior citizens, Lending to discharged bankrupts, First Home Buyers grant, Second mortgage, Servicing Guarantor, Security Guarantor…Owner Occupied, Investment, Fixed rate, Variable rate, P&I, Interest Only, Offset, Equity loan, Foreign Income, Casual Income, Part time income, Bonus income, Strata title, Company title, Torrens title, Over 55s accommodation, Reverse mortgages, Lending to SMSFs, Lending to senior citizens, Lending to discharged bankrupts, First Home Buyers grant, Second mortgage, Servicing Guarantor, Security Guarantor…
These are just some of the many, many permutations of what we see in our day to day interactions with clients.
Tapas, Truffles and the Price of Things
Nick and I just returned from our conference in Europe. The thing that sticks out – but is impolite to mention in mixed company – is the very low prices of quality foods in everyday eateries.
Generation Whatever and Property
You may have read about how the Baby Boomers have stolen all the property in the capital cities and left the other generations – X, Y, Z and Millenials (collectively “Whatever”) – destitute.
Well, not quite but you can be forgiven for thinking that as a procession of Generation Y and Millennial reporters tell us this is the case. Here’s something most of them have missed that will change everything.
What’s It All Mean
The 2017 budget handed down last week by the Federal Treasurer had a raft of measures in it that is designed to help home buyers into their first home. Will it all work? Will homes become affordable again? There is no simple answer to these questions so I’ll deal with each new announcement one at a time.
Banking Can Learn From Intelligence
Globally, banks have adopted technology wonderfully. There is so much that is good about technology in banking. The one point that provides similar parallels to the CIA, however, is banks’ determination to cull their experienced field operatives – their experienced Relationship Managers with a world of product knowledge and corporate history as well as some long term credit executives.
The Need to Evolve
One such constant since WWII has been the availability of finance for most of our business needs. There was a time when you needed funding for a business venture you went to a bank and if the bank manager knew you and you were a good credit risk. You got the loan. All of that and more is still available to you. So, what’s changed? The banks have changed.
Loan Application: 1200 Pages
The sheer volume of paperwork (so far) for this file is not unusual. Everything from the sale contract, the trust deeds, personal information, the business financials, etc runs into 58 computer files at around 30MB containing just over 1200 pages of data.
Which begs the obvious question. Do the banks actually read all that data?
Well, no they don’t. So why ask for it?