A child is a life commitment. Your mortgage isn't.
One of those you are signed up for whatever happens. The other is a contract you can change, and most people never do. You cannot control the next rate decision. You can control the structure underneath it, and right now that is the only lever anyone has.
Anthony Fontana
Director, Más Que Finance. Western Sydney.
Eleven ways people got some control back
Real situations from the last few weeks, with the names and details taken off. Each one has the part worth knowing underneath it, so you get something out of this whether you call me or not.
"These debts have been hanging over me for years"
Two credit cards, a buy now pay later balance and a line of credit at 47.9%. Every month the minimums went out and the balances barely moved. We consolidated the lot into her mortgage and structured the repayments so the debt is cleared in five years rather than carried indefinitely.
Her monthly commitment dropped and the debt now has an end date.
Worth knowingRolling debt into a 30 year loan and leaving it there costs more over time. It is the fallback, not the clever move. Either set it up over a shorter term, or keep repaying at the shorter term amount. The longer term is there for breathing room if you need it, and it only helps if you treat it as temporary.
"The bank said there's no equity left in the house"
That was one lender's valuation, not the only one available. We ordered another through a different lender and it came back materially higher.
Cash out approved. 20% higher valuation.
Worth knowingValuations vary between lenders by more than most people would believe. One number is not the number, and you are allowed to go and get another one.
"They told us we'd have to sell first"
Mum on maternity leave, family outgrowing the house, and a soft market to sell into. We released equity from the existing place and bought the next one without putting the first on the market.
Upgraded. Kept the old place as an investment.
Worth knowingReleasing equity to fund the next purchase can let you keep the first place rather than selling into a soft market. Whether that is the right call depends on the numbers, not the mood.
"We're in our 60s, we were told we're too old"
Age on its own does not kill a loan. It changes which lender will look at it and what the exit strategy needs to be, which is a very different conversation to no.
Refinanced, cash out approved, structured to pay down.
Worth knowingAge on its own does not kill a loan. It changes which lender will look at it and what the exit strategy has to be, which is a conversation rather than a no.
"I've got a side business but they'll only count my wage"
A lot of people have a job and an ABN. Weekend work, a bit of contracting, a small business running alongside the day job. Some lenders will not look at that second income at all. Others will, with the right documents behind it. Same person, same two incomes, very different answer.
Second income counted. Borrowing power up.
Worth knowingSome lenders ignore a second income entirely. Others will use it with the right documents behind it. Ask what they are actually counting before you accept the number.
"We can only afford the suburb we don't want"
First home buyers working off a number their own bank had given them. A different lender read the same income differently and the number moved.
Bought in the suburb they actually wanted.
Worth knowingThe figure your own bank gives you is one lender's reading of your income. It is a starting point, not a verdict.
"Everything I look at is negatively geared into the ground"
A display home purchase with a five year leaseback written into the contract. The builder stays in it, the tenant is in place on settlement, and the rent is set for the whole term. No vacancy, no advertising, no chasing anyone.
7% gross yield, locked for five years.
Worth knowingA leaseback sets the rent for the term, so there is no vacancy and no re-letting costs to model. The trade off is you are tied to that rent even if the market moves, so the number has to stack up on day one.
"How do we sell and buy without ending up homeless?"
Same day settlement. The sale and the purchase land on the same date, so there is no bridging loan, no rent in between and no moving twice. It needs both sides lined up to the day, and that is the whole job.
Sold and upgraded in one move.
Worth knowingSame day settlement is a coordination job rather than a lending trick. It has to be built in from the start, not patched together a fortnight before settlement.
"The bank won't count my overtime"
Some lenders use last financial year. Others annualise what you have earned so far this year. For anyone who has picked up shifts since July, that is a completely different number.
Borrowing power went up, not down.
Worth knowingSome lenders use last financial year. Others annualise what you have earned since July. If you have picked up shifts this year, those are two very different numbers.
"The refund only comes in July and I need the money now"
An investor holding a property and waiting until tax time to see any benefit from it. A PAYG withholding variation changes when you get it. Instead of overpaying tax every pay and waiting for the lump sum, the tax taken out each pay comes down and your take home goes up straight away.
Same tax position. Money in hand through the year.
Worth knowingIt is an ATO form, lodged each financial year, and your accountant handles it. It does not change what you pay overall, only when you get it. Almost nobody knows it exists, and for a lot of people it is the difference between comfortably holding a property and feeling squeezed by it.
"Is my rate still any good?"
One email, a look at what is actually being written this week, and an honest answer either way.
Sometimes the answer is you're fine. That's free.
Worth knowingWorth doing once a year whether anything feels wrong or not. If the answer is that you are fine, that is still an answer worth having.
Work out where you actually stand
Example figures are loaded so you can see how it works. Change them to yours. Nothing is sent anywhere and nothing touches your credit file.
If rates keep moving, what do you pay?
Principal and interest, monthly.
What you could get to, if you wanted it
Lending to 80% of value, so no lenders mortgage insurance.
What your other debts are costing you
Against rolling them into the mortgage. The full picture, both ways.
| Option | Per month | Interest in total |
|---|
Three steps, and you can stop at any one of them
Nobody likes starting something they cannot see the end of. This is the whole process.
A thirty minute call
You tell me where you are and what you want to happen. I tell you what is possible and what it would take. Nothing is lodged, nothing touches your credit file, and plenty of these end with me saying you are fine where you are.
Your numbers in writing
What you could borrow, what equity is there, what it would cost and what it would save. In a document you can sit on, show your partner, or ignore entirely. Still no obligation at this point.
If it is worth doing, I do it
Paperwork, valuation, lender, assessor, settlement. You sign things and answer the odd question. I deal with the rest and keep you posted so you are never wondering what is happening.
Come and have a feed with us
My dad has looked after transport workers for nearly four decades and is still at it. That is what I grew up around. Later this month I am putting on a BBQ with HelperMate for the people who keep this city moving.
No pitch, no clipboard, no business cards unless you ask. Come and say hello.
Details to come closer to the day.
Seven things we changed in our own house
My wife and I have a baby on the way. I spent a weekend going through our own position instead of reading forecasts, and we changed seven things. None of it is clever. It is the boring work that decides how a family handles a year like the one coming, and most of it you can do without me.
Read the sevenWhat people say
Does it cost anything?
No. The lender pays a commission whether you use a broker or walk into the branch, and I disclose what that is before you proceed with anything.
Will it touch my credit file?
Not for a conversation. Nothing gets run without you knowing exactly what is happening and why.
What do I need ready?
Your lender, your rate and roughly what you owe. A recent payslip helps. That is enough to get started.
Tell me which one is you
Thirty minutes on the phone. I will tell you what is actually possible from where you sit, what it would take, and whether it is worth doing at all. You walk away with your numbers written down either way.
- ✓Whether you would still qualify to move, which half of people now assume wrongly
- ✓What equity you could get at today's valuation
- ✓Where your rate sits against what is being written this week
- ✓Whether rolling consumer debt in makes sense for you, or does not
The reason to look now is not the Christmas rush. There is another decision in December, and every one of them takes something off what you are allowed to do. The thing that is possible for you today may not be on the table in February, and nobody tells you when the door closes. You find out when you ask.
Book a callNot ready for that? Email me one sentence about where you are stuck. I will tell you whether it is worth doing before Christmas or whether it can wait.
Anthony Fontana, Director, Más Que Finance