Jaimi Matray: Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth build their dream home with ease and excitement. I'm Jamie, your host and go to building broker. Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.
Tune in as I take you on the journey to building your home like a boss.
Hello and welcome back to another episode of the podcast. I am your host, Jamie, as always. And today I have Tanya here with me again, my co host for all things
Tania Mondon: finance. I'm very excited. I've not done this for a little while.
Jaimi Matray: I know we dropped off, didn't we? Yeah, we've been a busy gal.
Tania Mondon: Yeah, we've been traveling.
Jaimi Matray: You've been traveling. I was in
Tania Mondon: Bali too. Yeah, you did for a
Jaimi Matray: hot sec. Yeah. Cool. Well, today we're going to have a little bit of a chat about finance things and what's happening in the world of finance today and at the moment with inquiries, just a whole bunch of random things. We're going to have a bit of a chat.
So Tanya, tell us what's happening in the finance
Tania Mondon: world. Oh, well, everything's changing on the daily. Let's be real. Um, but the new scheme opened up. Yes. Yep. And Westpac's now one of the lenders that's under the scheme. So that's really cool. They not a lender before? No, they weren't participating. So now they are, which is great.
What are the other lenders? NAB, CBA and Westpac are the major lenders and then they have smaller lenders under that. So yes, the scheme's really good, uh, and the interest rates are competitive because they base it off 20%, so they'll give you a rate as if you actually had a 20 percent deposit. So that's really good.
Yeah, I guess you kind
Jaimi Matray: of always forget about that benefit too.
Tania Mondon: Yes, under the scheme and waiving lenders mortgage insurance. So win win and it's opened up to you being able to purchase with friends and family, which you couldn't previously. And it's now open up to permanent residents as well. Yeah. But we just found out that it's not open to New Zealand.
Jaimi Matray: Yes, I did have someone else that the other day.
Tania Mondon: Yes, and we were under the assumption it would be, but they confirmed that's not the case. So that kind of
Jaimi Matray: sucks. Yeah, so you have to be a Kiwi, but also a permanent resident or a citizen. Yes,
Tania Mondon: yes. Not just a Kiwi. On the visa, yeah. So that was unfortunate, but that's okay.
So if you're from New Zealand, try and get your PR. I think they need to be here for two years for them to apply. Yeah.
Jaimi Matray: Quite a long process, I think.
Tania Mondon: But that's okay. That's an option for, that's opened up. You still get
Jaimi Matray: the first homeowner's grant though, as a Kiwi
Tania Mondon: New Zealander. Yes. Yep. So there are still some benefits, just not the scheme.
Yeah. Cool. So for the government scheme, what people keep forgetting is that. They are going off your notice of assessment from the most recent financial year. So let's just say you're a single applicant, the limit for the scheme is 125, 000 as a single, but you're on track this year to earn 150, 000. But last year you earned 110, 000.
So that's what would be showing on your notice of assessment. You're still eligible for the scheme even if you are going to earn more than The one 25 this financial year because they're going off the notice of assessment from last financial year. Yes So just check with your broker aka me Yes, or your bank if you go to a bank because you probably would still be eligible if if that's the case Yep,
Jaimi Matray: so people need to get their tax done.
Yes that to get under the scheme Yeah, we had that the other day with the client shouldn't Donna
Tania Mondon: Yeah, we need your latest tax return. So fingers crossed people have paid enough tax and don't have a tax debt. I
Jaimi Matray: definitely have a tax debt.
Tania Mondon: Same. Speaking of self employed, if you are self employed and you need to get your tax returns done, just keep in mind that.
If you had two years of trading and your 2022 tax returns say that you earned 50, 000 but your latest tax returns are saying that you earned 100, 000, the bank wants to know why you've had such a big increase in income and they generally take the average or they'll take the lower of the two. Every bank's different on how they take that income, but unfortunately most banks won't go off the latest one.
Yeah,
Jaimi Matray: and you need two tax summaries under an ABN to
Tania Mondon: prove your income. Most of the time your ABN has to be open for at least two years. Yeah. Okay,
Jaimi Matray: cool. Okay, and what about interest rates? What are happening with interest rates at the moment?
Tania Mondon: Interest rates have been going up and down, but they're only telling you through the media that it's going up.
And I know that it has been, I think this is the 12th interest rate increase, but they go down behind the scenes because we get told as brokers and they never advertise it. They never say like, Oh, the fixed rates have gone down or the variable rates have gone down. But just yesterday, one of the bigger blenders put their rates down and then another bigger lender put their rates.
Up. The one that I bank with. Oh no. Damn it. So yeah, they are going up and down and most of the fixed rates now are higher than the variable rates. So we're not having a lot of our clients fix anymore. They're just taking that risk with variable.
Jaimi Matray: Are you helping people refinance a lot at the moment?
Tania Mondon: I'm doing mostly refinances.
Yeah, people are wanting either the cashbacks, which most of the banks got rid of their cashbacks, but there are still some that are offering it. Is that like a couple grand? Yeah, most of the time it's between like two to four thousand. Yeah. But you need to, there's conditions to it. For example, one of them is you need to be outside of LMI territory.
So 20 percent yeah. Whereas others you can go up to 95 percent including more insurance. It just depends on the bank, but most of them is actually all gone now. But yeah, we're doing a lot of refinances and people are just leaning towards going variable because the rates keep going up and down. So they're just like, we'll just go with the market.
Yeah.
Jaimi Matray: I'm doing that with ours at the moment. It's just kind of like, I'll just ride it up and
Tania Mondon: down.
Jaimi Matray: Yeah. What are some things that you're finding that are affecting applications at the moment when you're
Tania Mondon: lodging for clients? There's a few things. One of them is credit scores. Why did they not teach us in school about credit scores and that we shouldn't make so many inquiries?
because it lowers our score and that we should pay our Telstra bills before it goes to debt collectors. Yeah. They don't tell us any of this stuff, but it's so important because I'm getting a lot of those people come through at the moment and we need to wait months for them to figure out how to clear it or they.
Just don't have enough savings. So they're on a savings plan. That's quite normal for our clients though, being first home buyers. 'cause they do come to us and they're like, how much can I borrow? How much is my deposit going to be? So we help them regardless, but people just are not being able to save.
Yeah. Especially with the rental prices at the moment. So that's really difficult. Um, it also delays the application process, so we might get them pre-approved, but it. You have 90 days before it can go formal and sometimes that expires. What else are we facing?
Jaimi Matray: And when it expires, I assume you have to reapply and how does that
Tania Mondon: change things?
You do need to reapply and if the interest rates have changed in between that, then that means you can now borrow less. Yeah, the rates have gone
Jaimi Matray: up. Does a pre approval secure the rates at the time or if you've been pre approved and rates change, does that still affect your borrowing in between that
Tania Mondon: period?
It depends. So if you have a pre approval and then you go find a property and it's exactly the same loan amount and value that you initially applied for, then you'll be on that same rate that you got when you were pre approved. Keep in mind, it might be variable. So the rates might have gone up or down, but the assessment rate, they'll base it off what it was at the time that you applied.
Okay. And if you find another property and it's a little bit more expensive, they have to reassess you on the new assessment rate. So that's when it can affect your borrowing.
Jaimi Matray: Yep. So it needs to be the same,
Tania Mondon: exactly. The same, house, land,
Jaimi Matray: pitch and property established in new build. Yes. Okay, cool. What about people who are changing jobs at the moment?
I know we've had a few of those. How does that work and what do they need to do or look out for?
Tania Mondon: I don't know why so many people are changing jobs right after tax time, but every bank has different policies. But I always just say, if you're on probation, Most banks won't look at you. Some will. Some of the major banks will, if you have a decent deposit, that is.
Yeah. But the ones that you and I mostly do, they are first homebuyers, minimal deposit, or as is, so the bank want that job security there, so they'll need to be off probation. If you're full time, part time, you need at least three months, most of the time. If you're casual, which
Jaimi Matray: a Especially in like nursing and stuff at the moment, full time hours, but casual nursing or mining, full time hours,
Tania Mondon: casual.
Yes, that's so tricky. You do need at least six months, if you're casual, for them to actually figure out how much you earn. It depends on your occupation though, and it depends on the bank policy, so if you are not sure, just ask. Yep.
Jaimi Matray: And when you work casual and full time hours, how does that work with the banks?
Tania Mondon: So if you're still casual, but you're working like a 76 hour full time,
Jaimi Matray: with how much you can borrow.
Tania Mondon: They don't care if you're doing full time hours, you're still not a full time employee. So they'll go off the casual policy regardless. In terms of how they assess your income, they will shade it because if you're casual at some point throughout the year, you're going to go and leave.
Which you don't get as a casual, so therefore you might have two or three weeks a year that you take unpaid. And the banks take that into consideration that you won't have income coming in during that time, so they'll shade your casual income. Logically that
Jaimi Matray: concludes us for today. We've had a bit of a random chat about some finance things and questions and interest rates.
and inquiries and what's going on in the finance world at the moment. So thank you for coming on the episode, Tanya, and we'll be on here again
Tania Mondon: soon. Sounds good. Thanks for having me.
Jaimi Matray: Thank you so much for tuning in to the Home Building Like a Boss podcast. I hope you enjoyed today's episode and learned something new.
Remember, you've got this and I've got your back. Until next time, stay inspired, stay informed, and stay confident on your building journey. I can't wait to chat with you on the next episode. Don't forget to check out the show notes for more information and free resources. If you haven't already hit that subscribe button, so you never miss an episode of the Home Building Like a Boss podcast.