Do I really need insurance? Yes, you do.

Posted by ryan.ewart in Accounting, Financial Planning, First Home Buyers, Insurance and Wealth Management, Refinancing, Solicitor

At Finance and Property group, we believe that insurance is important. Why? Because its helps you protect your greatest asset – you and your family. Insurance is more than just the house.

It’s ensuring that if the worst happens – and trust us when we say that sometimes it does – that you have every protection in place to ensure your future financial security.

In Australia, only about 4% of people with children have adequate insurance, making us one of the most underinsured countries in the world – ranked at number 16 on the global scale to be exact.

The general consensus is that should anything happen to our home, income or ability to pay off our mortgage many of us are happy to sell an asset, rely on Centrelink or use our savings. But those options are just not as available as you think they will be, and many people get caught out.

To help you make sure that you have your bases covered, our insurance expert Matt has put together the two basic insurances you need to have if you’re a property owner.

#1 Income protection insurance

Many Aussie’s don’t think twice about insuring their home and car, but hesitate when it comes to protecting their ability to earn an income. This is where most people get caught out when things go wrong. Your income, and your ability to earn it, is your largest asset and is the most important factor in paying for your lifestyle and your home loan.

Imagine if you suddenly get sick and can no longer work. You partner may still be able to earn an income but that may not cover your existing mortgage repayments or debts yet it means you don’t qualify for any assistance from Centrelink. What would you do? The last thing you want to do is have to sell your home.

Income protection insurance usually pays upto 75% of your income over a short or longer period of time if you are ill or injured, and unable to work. Schools fees, mortgage repayments, medical expenses and living costs (like food & petrol) can all be covered while you recover. Even if you are only out of work for a short period, income protection insurance could mean the difference between not having to think about your finances, and having to sell assets to cover your costs.

But there is some good news here. Income protection insurance is tax deductible and can again, be relatively low cost. If the unforeseen happens, such as a cancer diagnosis or even a broken leg, you’ll know you have the funds to get back on your feet again – without putting a major dent in your savings or racking up future debt.

#2 Trauma insurance

Trauma insurance can help keep your family secure if the worst was to happen to you, or your children, such as a cancer diagnosis or severe injury or illness.

It’s a sad fact that it can happen to any of us – so it’s important to be mindful of how you would cover a big debt, like your mortgage – should it happen to you. Trauma insurance cover or critical illness insurance, provides a lump sum of money to cover immediate medical expenses and other financial needs such as your mortgage, when a critical illness or injury occurs.

Trauma cover pays an agreed amount to cover you for many different issues such as heart attacks, cancer or intensive care. While income protection covers your agreed income over a period of time (dependant on your cover), trauma insurance is generally paid out in a lump sum and can be paid on top of income protection insurance.

This money than can be used for things like:

  • Any private medical costs above your health insurance
  • An income stream if you stop working, but find out about income protection first
  • The ongoing cost of any therapy and special transport costs
  • Adjustments to housing and lifestyle changes
  • Debt repayments

Trauma insurance can take help you ensure you and your family maintain your financial security if you get injured, become too ill to work. You can also arrange cover for your children so if the worst should ever occur, you know that you are covered financially so you can concentrate on caring for your children rather than worrying about work. That’s not a pretty picture, but we know all too well that illness don’t discriminate.

Am I covered?

You may want to know for sure if you’re covered, and what insurances might suit you and your life best. We find when we meet with clients that most people don’t even know what insurance they have and what they may have been paying for without realising.

Superannuation funds can provide some coverage, but it’s important to review this regularly to ensure you’re not only adequately covered, but that you are also not paying too high fees that may impact your future retirement.

We can help get you covered

The reality of what can happen in life means that when you own a home you need to get all your insurance ‘ducks in a row’.

We can help you make sure that you have all your bases covered when it comes to your mortgage, your income and your family. We have years of experience in providing credible and professional financial services to our clients and we take the time and hassle out of creating your long-term financial security and guide you through the process with expert financial advice.

Whether you have no insurance or would like to review your current policies, we can help make sure you have the right cover.

What is positive credit reporting?

Posted by ryan.ewart in Accounting, Financial Planning, First Home Buyers, Home Loan, Upgrading

When you need to borrow money, having a good credit history is vital.

Maintaining a favourable credit rating is important when you need to borrow money and a new reporting system in Australia now makes it easier. Changes to the way lenders assess your credit score are underway with new laws imposed by the federal government that include positive credit reporting.

Comprehensive Credit Reporting (CCR), the new system that includes positive and negative financial behaviour is bound to be good news for borrowers and lenders as it will give the full picture of your financial standing, not just the negative stuff as it has in the past.

What does CCR means for borrowers?

Australia has been behind other countries when it comes to personal credit scores, which only let lenders see your negative money behaviours. That means if you’ve ever fallen behind on your mortgage or didn’t pay a phone bill, financial institutes and brokers were advised when running a credit check.

What they weren’t told about are all the times you did pay your bills on time. And that’s where the big change comes in.

For borrowers, this transparent method of tracing your financial history will mean more opportunity for loan approval. It may also offer opportunity for better rates on mortgages and other loans, including credit card limits.

And for lenders, CCR means getting an honest, broader insight into a borrower’s overall money history, which will lead to better, and fairer, client assessment.

How to maintain a positive credit score

Maintaining a clean and clear financial history is the best way to ensuring your loan application will be approved. Here’s a list of ways to keep your financial standing favourable.

  • Firstly, you have to have a credit history to maintain. Lenders need a past to look at so be sure to have bills in your name. Start with a mobile phone plan, utilities bill or credit card.
  • Don’t borrow more than you can re-pay
  • Pay your bills on time
  • Always pay your mortgage first
  • Keep your credit card available balance higher than what is owed
  • Keep credit cards to a minimum and use the one you’ve had the longest the most
  • Spend less than you earn
  • Save money for emergencies and hardships
  • Talk to a broker to gain an understanding about your current credit score.

How to save on your home loan

Posted by ryan.ewart in Construction Loans, Financial Planning, First Home Buyers, Home Loan, Interest Rates, Mortgage Broking, Property Buying, Refinancing, Upgrading

There are few financial commitments that carry as much weight as your home loan.

So it makes sense that when the Reserve Bank cuts interest rates to such historic lows, that now is the time to review your home loan and see if you could potentially save thousands.

There are a few reasons why the RBA decided to cut the cash rate this month. Sustained national dwelling value falls, consistently lacklustre inflation and mixed messages from the labour market, may have encouraged the Board to shift its long-held stance on monetary policy.

This months rate cut is good news for the Australian property market which could now see a boost from lower interest rates. According to the latest CoreLogic Hedonic Home Value Index, national dwelling values fell 0.4% in April and 7.3% annually.

While the RBA’s decision will no doubt bring relief to borrowers across the country, the question now is how soon, and by how much will the nation’s lenders pass on the savings to borrowers?

In the past week we’ve seen most of the big banks did not pass on these savings to its customers. This is not that  surprising as in recent history, very few of the bigger lenders passed on the full rate to borrowers.

If you’re with one of the bigger banks or lenders, it is absolutely worth checking to see if another lender can get you a better deal.

How could you save on your home loan

If you’re keen to secure a better interest rate or enjoy more loan features, refinancing your home loan can be the solution. You could end up saving thousands off your home loan. Refinancing is also an opportunity to get control of debt or tap into any home equity you’ve built up.

Secure a lower rate on your home loan

One of the main reasons people choose to refinance their loan is to get a lower interest rate, and put more money back into their pockets instead of paying the banks. When done correctly, refinancing your home loan could save you thousands over the life of your loan, and free up cash now. With rates sitting low at the moment, now is the perfect time to see if you can save by refinancing.

Switch between variable & fixed rates

Another way to save on your home loan is to switch between a variable rate and a fixed rate. With a fixed rate, some want peace of mind – knowing exactly how much their monthly repayments will be without the possibility of it changing is worth a slight increase in rate. Conversely, you may decide you’d like to take advantage of a lower variable rate as you can accept the risk that rates may rise in future.

Get a home loan with better features

There are some great home loan features around at the moment, and refinancing could help give you some of the features that weren’t available to you before. You might want to switch to a home loan that allows you to make lump repayments without fees or open up an offset account to reduce your interest.

There are some pretty cool boutique features as well like getting a repayment holiday (a break from repayments), or the loan portability feature which allows you to take your home loan with you when you move without much hassle.  

Consolidate your debt

Many of us have multiple debts like car or credit card along with our home loan. Often our car and credit card loans have pretty high interest rates, meaning more out of your pocket. Refinancing could give you the opportunity to streamline your debt and potentially reduce the overall interest you’re paying through ‘debt consolidation’, streamlining all of higher interest debts into one lower interest debt, reducing your monthly repayments.

Release some equity in your current property

You may be thinking about joining the thousands of Aussies that have invested in property, renovate your home or go traipsing around Europe on that trip of a lifetime. With your current home usually being your most valuable asset, it only makes sense to release as much of the value in your home as possible.  

Not so long ago, the only way home owners could access their home equity was by selling up and upgrading to another property. These days, home loans are flexible and it’s possible to get access to the equity in your home without having to sell up. Reviewing your home loan can help you see exactly how much equity is available to you, and refinancing can help you access the equity to use for other things.

Let us help you save on your home loan

When it comes time to make a decision about refinancing your home loan, the best suggestion is to sit down with our team and go over your current home loan.

We compare your current loan with hundreds of others from our lenders to see if we can find you a better deal.

Grow your business today

Posted by ryan.ewart in Accounting, Asset Finance, Business Finance, Financial Planning, Small Business

Are you planning on growing your business this year?

Growing your business can be an exciting yet daunting task. As a small business, we understand. It comes with a risk, but the reward for success is so sweet.

We hear from many of our clients that a challenge they face in growing their businesses is having access to sufficient funds and resources to facilitate that growth.

It may be your need a bigger van for deliveries, more tools and machinery to be able to take on more clients, a bigger coffee machine for the extra customers coming through your door, a new computer, chair and desk for your new hires or just a better photocopier for the team.

Using EOFY to your advantage

The good news is that you can use the EOFY to your advantage with the newly upgraded instant asset write-off.

The instant asset write-off has been with us for a few years now, and in a post-budget blitz, the scheme’s upper limit has been extended to $30,000, up from $25,000.

Even better, the write-off has also been extended to medium-sized businesses with a turnover of less than $50 million

The beauty of the scheme is that it allows small (and now medium-sized) businesses to claim an immediate tax deduction for eligible asset purchases rather than having to depreciate the cost over several years. This delivers immediate tax savings that can make an asset purchase more manageable on business cashflow.

What type of assets can be written off?

Most types of plant and equipment used in your business can be eligible for the instant tax write off. A new printer, a cappuccino machine, a tradie’s ute or a hairdresser’s reception desk are just some of the assets that can be claimed.

What’s the write-off worth?

This year sees three thresholds apply to the instant write-off depending on when you purchased a business asset.

The upper limits are:

  • $20,000 for assets purchased between 1 July 2018 and 28 January 2019
  • $25,000 for assets purchased between 29 January 2019 and before 7.30 pm 2 April 2019
  • $30,000 for assets purchased between 30pm 2 April 2019 and 30 June 2020.

A key point is that the entire cost of the asset must be below the instant asset write-off threshold irrespective of any trade-in amount. So, if you buy a delivery van priced at say $40,000, it won’t be eligible for the write-off even if you pay $25,000 after trading in your current vehicle for $15,000. The van would have to be priced below $30,000 before any trade-in applies for it to be eligible for the write-off.

As your local Sydney small business experts, we can help businesses with any commercial loans and business finance needs.

When you’re in business, having the right finance and risk planning in place can mean the difference between thriving and surviving. As a local small business ourselves, we understand your needs. We can help you understand the finance options available and do all the legwork in sourcing the right business loan for your needs.

And no one is better placed to understand your needs than another small business owner.

Make an appointment to speak to your local small business finance expert who can answer your questions and help you find a suitable financial solution for your business’ current and future growth needs.