They've done it now!

Wayne Swan has been very keen to ban all exit fees on home loans and now he has his wish. It sounds like a good idea however it could pose a serious risk to competition in home loans. The smaller and non-bank lenders can't absorb high upfront costs the way the big boys can, so it's likely they will have to charge higher upfront fees to remain viable.
Whereas before only borrowers who left their lender early incurred fees, now everyone will have to share the pain.
Watch this space.......
(Want to know more? Take this link.)

Broker clients are happier!

We always thought our clients were happy souls (in the main). Now here's proof!

According to the eighth MFAA/Bankwest Home Finance Index survey, 67 per cent of respondents felt they got a better home loan deal from a broker than a bank.

MFAA chief executive Phil Naylor said the research had revealed that borrowers liked using brokers because they are knowledgeable and have access to a wide range of lenders.Experience was also a strong indicator, with 30 per cent of respondents saying brokers are more experienced than lenders, up from 24 per cent last year.

Since many of us left banks to become brokers, that's well known to us. Great to see the perception catching up to the reality!

Back to the future?

Some of you may remember the Bank of Melbourne from the ‘90’s. It was a great bank and dear to many Melburnians’ hearts. Westpac bought the business, kept the status quo for a while then got rid of the brand, switching all existing branches to Westpac.
Guess what? They’re bringing it back. Apparently their research says that the Bank of Melbourne brand is fondly remembered in Victoria so the St George brand is going and we’ll have Bank of Melbourne – and Westpac of course! Read more here.


I wonder if they are bringing back the service that made us all so fond of BOM? We’ll be watching!

Who says banking competition is dead?

Well, what a difference a month makes.

In January, the talk was all about the lack of competition for, and amongst, the big banks. In the past couple of weeks there has been a plethora of new lending offers introduced by banks and non-bank lenders, large and small.

It all started on Valentine's Day with NAB's interesting marketing tactic of 'breaking up with the other banks'. If you were in a cave (or maybe just away on holidays) and you missed it, you can view some of the highlights here: http://breakup.nab.com.au/ . Apparently this strategy took 18 months to put into place, so they've clearly been working on the “breakup” for some time.

A particularly interesting concept within the strategy were the actors breaking up in restaurants, cafes, trains and trams all around Australia, wonder how many people thought it was real at the time? Have they worked it out yet? (Did you see one? What was the reaction like from people around you? We would love to hear some firsthand reports.)

The immediate reaction from the other major banks was varied. ANZ took the high road ('we didn't know we were together to start with'), Westpac kept silent; CBA took the bait though. The very next day they began offering discounts on application fees, then discounts on their discounts and finally a brand new home loan with NO HIDDEN FEES....does that mean their other loans do have hidden fees?

Since then, lenders big and small have rolled out a plethora of discounts and rebates, some offering up to 1.25% off their standard variable rate - but is that as good as another lender who offers only 1.00% off their rate? Of course it all depends on the base rate, the fees and the length of time you will have the loan.

So, if you have a home loan of $250000 or more, not in a fixed rate and haven't reviewed it for a while, now is a great time to do so. Not only are the chances that you will get a far better deal than you are on now you will probably be able to change lenders with little, if any, out of pocket costs. The best bet is, of course, to speak to us, your friendly broker. We can provide you with detailed comparisons of each lender and how their offer relates to your situation. If you want to move to a better deal, we'll make simple!

Is this the best kept secret in Australia?

OK, hands up - how many of you are aware that on 1st January 2011 a whole new regime was introduced to consumer credit?

Yep, you're the consumer and you probably have credit so how come you didn't know about these new laws? Because they've mainly been publicised to people who have to comply with them, who (of course) already know about them!

Since I don't run a newspaper or TV station and am not in government (thankfully) the best I can do is to let you know what changes have been introduced via this blog.

The most important change is that we now have national consumer credit protection laws. Until this year, each state had its own (different) laws around what could and couldn't be done, what was and wasn't covered, by the term 'consumer credit'.

Consumer credit generally meant home loans, credit cards and personal loans. The interpretation has been broadened to also include residential investment property loans, so that property investors, who are not necessarily experienced business people, are also covered by the new laws.

The biggest change for our industry has been the introduction of credit licensing (governed by ASIC). Previously, in most of Australia, anyone could advertise themselves as a mortgage or finance broker and there were no barriers to entry.

Now, in order to arrange the loans above, a broker, lender or intermediary must hold a credit license. (We got ours recently so, yes, we're still in business.)

This is a much better situation for those who want to get some advice but are not sure who to ask. The first thing to check now is whether the adviser you talk to has a credit license. (Financial planners and accountants are covered by a different set of regulations; the ones I'm referring to here apply only to those involved in arranging credit.)

If they have a credit license, they must belong to an external dispute resolution scheme (aka Ombudsman) so you have some recourse if things go wrong. That's good to know!

If you've taken out a loan before and do so again from now on, you will receive a lot of different information to that supplied previously. That's because credit advisers now have to provide certain information to all clients that reach a minimum standard.

Best of all, the law is now the same all around Australia. So, if you buy an investment property in another state, you know that the rules will be the same as they are at home. (It's also pretty handy for businesses in this field who do business in more than one state.) 

Mind you, we are still waiting for ASIC to tell us exactly what a 'Credit Guide' is and what it must contain. We were supposed to start handing them out on the 1st January 2011 however the implementation was delayed until 1st April as, by the middle of December, ASIC still hadn't worked out what they wanted us to do.

The funniest thing is that we still don't have the guidelines and we're nearly at the second deadline.

At least you can be certain that we'll introduce a credit guide as soon as someone tells us what it is!

So, you're really interested in this and want to know what the new laws are all about? I'll give you some links to start with:

ASIC's National Consumer Credit regulation page

Treasury's NCCP page

That should do - don't want to bore anyone to death.

If there's anything you have a burning desire to know about these laws, please have a look first (!) and if you can't find it, let us know. We'll see what we can do to help. No, really, we will!

By the way our ASIC Credit Licence Number is: 391439, just in case you were wondering.

Until next time.......M

We've joined the rush to social media - come with us!

There are lots of bloggers these days and what they say is important to just one person - them!

The intent of this blog is to actually provide some useful information, plus our commentary on the hot topics of the day in the field of finance generally and property loans in particular.

We hope we can use our experience and knowledge to help our clients, their family and friends to become better informed and more confident with their financial decisions. If you have a question you would like to run past us please feel free to post it on the blog and we'll respond.

We would really appreciate your feedback on the blog. If there are topics that you would like to see discussed,  please let us know. There's so much information out there our biggest challenge will be to avoid inundating you with useless information. We want to make it quick, clear and to the point and take away some of the mystique surrounding all things financial. It's really not that hard - we will make it SIMPLE!