Risk: what's your appetite?

Risk is different for everyone, for some it’s a walk down an alley at night – for others a plane flight. When we think about risk in investing or wealth creation for some it’s the share market and for others it’s property, and for some generations it is putting money in the bank! We know, from the moment we took our first steps, that risk can also bring rewards so most of us learn to be a little comfortable with risk, but how can you manage risk & benefit from some of the rewards. The first step is probably understanding your comfort level, financial planners in their process put clients through an extensive risk profiling and surprisingly most of us profile as being far more risk adverse th

Bridging Finance...how does it work?

Bridging Finance: A loan taken where the purchaser wishes to buy a new property before selling their existing property. The lender will take security over both proper­ties until the initial property is sold. So very very handy when you don’t want to have to pack up and move twice! It also allows you to commit to that dream home that you find immediately after you decide to just sell yours first and then see what’s on the market. OK, there are pitfalls: you have to have a tonne of equity in your home to qualify, interest can add up and you’re taking a risk if you can’t sell your place, but honestly worth a look at. Bridging loans differ from regular loans because they generally test your “aff

How do we go about building a new home?

Are you considering buying a house and land package or buying vacant land and building a new home? I absolutely love building; I acknowledge its not without its trouble and almost every build has something go wrong, but its still a wonderful process – choosing the finishes and all of the inclusions and tailoring the design to suit your specific needs. Plus it beats paying for those hideous curtains in someone else’s house that you are just going to throw out anyway. A simple approach is to buy a pre-organised house and land package from a builder of your choice. They will have selected a great home to fit perfectly on the site and you’ll have fewer choices to coordinate at the beginning – li

Budget....is not a dirty word

How many of us know what it actually costs us to run our lives? Such a simple thing but the answer is often unknown, I am inviting you to have a think about it. Because, at the end of the day, it gives you certainty and there’s comfort in that – and it lets you know what opportunities you can consider taking. I’ll give you another tip, if your personal loans and credit card balances are growing each year the uncomfortable truth is you are spending more than you earn and you need to stop and get a handle on where the money is going now so you can look at how to turn this around. You’re not alone in this, by the way. I know ‘budget’ sounds like a dirty word, but, doing a ‘budget’ will allow yo

Break costs...explained

Break costs: A cost incurred for paying out a loan balance on a fixed term loan before the term has expired. In shorthand these are a complicated calculation ending in a penalty that you will pay for breaking the fixed rate early. The longer explanation is it’s a penalty that reflects the loss of income the lender will incur because of the fixed rate ending early, basically, if they had leant the money to you for 5% (for example) and you had a year to go, and now they can only get 4% from another borrower, they want you to cover the 1% difference for the balance of the term. In actuality lenders are borrowing the money themselves and agreeing to a fixed contract with their lenders that they

How do I qualify for a loan

How do I qualify for a home loan? While lending is a fast pace, rapidly changing world with new policies and products released constantly the basics remain the same, lenders are looking for character, capacity and collateral. Character. Your lender is looking for a good credit history, in Australia we are moving from a “negative reporting” regime, where you are reported for negative behavior only – to a regime where positive repayment history is also reported, and negative behavior in far greater detail. What does this mean? Where previously you would only be reported for a missed payment of 60 days or more, lenders are becoming able to report a payment which is paid just a few days late. (S

What does refinance a loan mean?

To refinance a loan means (often) to switch provider or lender in order to get a better interest rate and save money. This works because loan products change and if your loan is more than 2 years old there’s almost certainly a newer loan which will suit your needs. Armed with your loan balance and current interest rate your broker will compare mortgage rates across their panel of lenders – including your current lender – and tell you what you could save. My typical borrower refinancing in Penrith is saving upwards of $2,000 a year in interest, anything under this saving and I will advise them of other options we can do to save money. In fact the greatest saving I have achieved (a very proud

Amortisation...what is it?

Amortisation: To pay off principle and interest under a loan over a period of time. Amortisation is the actual function of repaying your loan and its pretty cool to graph. Basically, your typical principal and interest repayment is made up of the interest due on the outstanding balance, and an amount calculated to repay the principal over the remainder of the loan term. The next repayment is the same amount but because the interest is less (because the balance has dropped from the amortisation) then more goes to principle and so on and so forth until it’s all paid off. Amortisation looks really slow in the beginning – and it is, because the interest is highest while the balance is highest, b

How do equity home loans work?

When we talk about an equity home loan today, we are referring to a line of credit, or a loan where you can easily access money right up to its limit – and repayments are made on an interest only basis on the outstanding balance only. Brilliant for serious investors who wish to have ready access to enough cash to grab an opportunity and manage their cash flow at the same time, this is generally the borrower who takes up this type of loan. What I mean is they allow you to write a cheque from the account that could cover an investment property deposit, without you having to seek approval from your current lender – and while you’re waiting on the opportunity it isn’t costing you interest, as in

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Two Red Shoes Copyright © 2020 All rights reserved. Call on 02 9002 0380, 0404 494 929, email us  or 'old school' fax 02 9002 0381

Jarrett Group Pty Ltd atf Jarrett Group Discretionary Trust trading as Two Red Shoes hold Australian Credit Licence No: 428614 and are members of an external dispute resolution scheme. Details of our complaint resolution process can be found here or please see our credit guide. All information contained on this site is general information only, and does not take into account your particular financial situation or needs. You should consider your personal objectives, financial situation along with the recommendations of your trusted advisors.

Sydney mortgage broker operating in

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  • NSW Central Coast too!